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FINBOND GROUP LIMITED - Audited Consolidated Results and Dividend for the Twelve Months Ended 28 February 2015

Release Date: 16/04/2015 13:47
Code(s): FGL     PDF:  
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Audited Consolidated Results and Dividend for the Twelve Months Ended 28 February 2015

FINBOND GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: “FGL” ISIN: ZAE00013895
(“Finbond” or “the Company” or “the Group")


AUDITED CONSOLIDATED RESULTS AND DIVIDEND FOR THE TWELVE MONTHS ENDED
28 FEBRUARY 2015


Executive Overview

The directors are pleased to present the financial results of the
Finbond Group for the twelve months ended 28 February 2015.

During the twelve months under review, Finbond delivered another set
of solid results increasing Headline Earnings by 52%, Operating
profit by 57%, Revenue from continuing operations by 60%, EBITDA by
51% and Dividend per share by 62%. These results were achieved in
difficult and challenging market conditions.

The Group took positive strides towards achieving its vision “to be
the leading emerging market community Bank in South Africa improving
the quality of life of our clients by offering them access to unique
value and solution based savings, credit, transactional and insurance
solutions tailored around depositor and borrower requirements that
empower, develop and uplift our clients.” This included a number of
achievements and significant developments for Finbond:

*   Headline earnings per share increased 53.64% to 8.6 cents (Feb
    2014: 5.6 cents).
*   Dividend per share increased 61.9% to 3.4 cents (Feb 2014: 2.1
    cents).
*   Operating profit from continuing operations increased by 56.8% to
    R 73.4 million (Feb 2014: R 46.8 million).
*   Profit for the period attributable to owners of the company
    increased 37.9% to R 50.9 million (Feb 2014: R 36.9 million).
*   Earnings before interest, taxation, depreciation and amortization
    (EBITDA) increased 50.2% to R 156.7 million (Feb 2014: R 104.3
    million).
*   Revenue from continuing operations increased 60.4% to R 455.4
    million (Feb 2014: R 283.9 million).
*   Operating cost to Income ratio improved, reducing by 5.1% to 64.5%
    (Feb 2014: 69.6%).
*   Value of loans advanced increased by 42.0% to R 765.7 million (Feb
    2014: R 539.3 million).
*   Cash received from customers increased by 50.8% to R 1.07 billion
    (Feb 2014: R 709.5 million).
*   Fixed and indefinite term retail deposits increased by 32.5% to
    R 921.9 million (Feb 2014 R 695.9 million).
*   Received an investment grade credit rating from Global Credit
    Ratings.
*   Was granted full membership of the Authenticated Early Debit Order
    and Non-Authenticated Early Debit Order Payment Clearing Houses of
    the Payments Association of South Africa (PASA).
*   Launched a fully functional debit card transactional banking
    product to a portion of the existing base of loan customer
    clientele.
*   Expanded the branch network by 43% to 286 branches nationwide
    (February 2014: 200).

Managing an efficient business requires stringent risk, compliance
and corporate governance systems. During the period under review we
further   expanded  our   Compliance,   Internal  Audit, Information
Technology,   Human  Capital   Development   and Risk    and   Analysis
Departments in order to effectively manage Finbond’s Risk Management
Framework. The bulk of the increased expenses during the period under
review relates to increasing capacity and improving risk management
functions and processes within Finond.

Management remains focused on executing the Group’s strategy and top
business priorities namely optimal capital utilization, earnings
growth, strict upfront credit scoring, good quality sales, effective
collections, cost containment and training and development of staff
members. This enabled us to achieve overall strong operational
results despite the current difficult and challenging business
environment.

Finbond continues to manage for the long term and to invest in
people, risk management, information technology, banking systems,
compliance systems as well as in enhanced collection strategies and
systems, in order to build a sustainable, professional business that
creates long term economic value and produces significant benefits
for the wider community.




                                                               2|Page
Finbond Group Limited

Finbond Group Limited, with its 880 staff members and 286 branches,
specializes in the design and delivery of unique value and solution
based savings, credit, transactional and insurance solutions tailored
around depositor and borrower requirements rather than
institutionalized policies and practices. We exist to improve and
transform the lives and livelihoods of our clients by availing them
of modern inclusive banking products and services that benefit and
empower them.

Finbond Group Limited conducts its business through four divisions
focused on:

    1.   Short and Medium Term Micro Credit Products;
    2.   Investment and Savings Products;
    3.   Transactional Banking Products; and
    4.   Insurance Products.

Micro Credit, Transactional and Insurance solutions are offered
nationally to the under banked and underserved emerging banking
market actively seeking credit and banking solutions, but remaining
largely unattended and underserviced due to the traditional banks
concentration on the higher income brackets of the population.

Our Investment and Savings Products, which offer a superior above
average rate of return, are offered nationally to investors and
pensioners looking for guaranteed higher fixed income in the current
environment of depressed low yields.


Micro Credit Portfolio

The overall gross loan book (excluding unearned finance revenue)
reflected another year of strong positive growth totalling 38.0%
ending the twelve month period at R 317.6 million (Feb 2014: R 230.1
million).

Total segment revenue from Finbond’s Micro Finance activities, made
up of interest, fee and insurance income (portfolio yield) increased
41.3% to R 370.3 million (Feb 2014: R 262.1 million).

During the period under review Finbond’s loan product offering
remained unchanged consisting of 1 month – 24 month micro loans from
R 100 – R 20,000 with an average loan size of R 1,615 (Feb 2014:
R1,732 and an average tenure of 3.6 months (Feb 2014: 3.3 months).


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Given the short term nature of Finbond’s products, Finbond’s loan
portfolio is cash flow generative and a good source of internally
generated liquidity. The whole loan portfolio turns nearly four times
a year. This is a key differentiator from longer term lenders. By way
of example:   If a longer term lender’s average tenure is 36 months
with a book size of R 600 million, that lender will collect R 200
million cash per year and R 600 million over three years. If
Finbond’s book is R 600 million, Finbond will collect approximately
R 2.4 billion in cash per year and more than R 7.2 billion in cash
over three years.

For the twelve months ended February 2015 Finbond granted R 765.7
million worth of loans (Feb 2014: R 539.3 million) and received cash
payments of R 1.07 billion from customers (Feb 2014: R 709.5
million).

Finbond’s average loan period is significantly shorter than our
larger competitors and our average loan size significantly smaller.
Given this conservative approach, Finbond does not have any exposure
to the 36 – 84 month, R 30,000 – R 180,000 long term unsecured
lending market that saw disproportionate growth over the past 24 - 36
months and that caused significantly increased write offs and bad
debts. Shorter term loans offer lower risk since consumers are more
likely to pay them back as opposed to longer term loans.

Furthermore, Finbond’s micro credit portfolio is not exposed to any
significant concentration risk and does not have any significant
exposure to any specific employer or industry.


Strict Upfront Credit Scoring

Over the past twelve months Finbond continued to improve on and apply
strict upfront credit scoring and affordability criteria. The credit
scores on the various products are monitored on a monthly basis.

Detailed affordability calculations are performed prior to extending
any loans in order to determine whether the client can in fact afford
the loan repayments.

Finbond’s lending practices have been consistently conservative over
the past number of years. While other micro-lenders in the market may
have doubled or tripled debtors books two and three years ago,
Finbond have not. In fact two and three years ago Finbond saw very
conservative growth in the loan portfolio. Finbond did not have
liberal lending polices that now require significant adjustment.



                                                              4|Page
Finbond has been consistently conservative and rejection rates remain
higher than that of our major competitors even after their recent
tightening of lending criteria. Rejection rates stood at between 39%
and 57% for our 3 – 6 month product range and 82% - 94% for our 12 –
24 month product range at the end of February 2015.

Impairments

Conservative lending  practices, strict upfront credit scoring
supported by robust collection strategies and processes continue to
ensure better than industry bad debts.

Notwithstanding an increase in impairments, the loan loss reserve,
also referred  to  as   the   risk   coverage   ratio  (impairment
provision/Portfolio at Risk: 90 days in arrears and longer), which is
an indication of a microfinance institution’s ability to cope with
estimated loan losses, actually improved marginally at the end of the
financial year to 102.7% (Feb 2014: 102.5%). This improvement
occurred as a direct result of continued, consistent conservative
provisioning against future loan losses undertaken by management.
The 30-day arrears coverage ratio (impairment provision/Portfolio at
Risk: 30 days in arrears and longer), reflects even greater
improvement, being recorded at 56.5% at the financial year end, which
is up from a ratio of 51.5% at the end of the preceding financial
year.

Finbond recorded a moderate but manageable increase in impairments in
2015. The overall, unadjusted Net Impairment Loss Ratio reverted to
levels similar to those recorded 24 months ago, ending this financial
year at 15.2% (Feb 2014: 12.0%). Finbond’s significantly lower, and
much more accurate, adjusted loan loss ratios trended similarly
during the year with Net Impairment as a percentage of expected
instalments amounting to 6.9% (Feb 2014: 6.3%) and Net Impairment as
a percentage of cash received (which is more conservative than
instalments due) stood at 8.2% at the end of February 2015 (Feb 2014:
7.3%). These adjusted measures are a more appropriate reflection of
the impairment cost related to a short-term loan portfolio than
traditional balance sheet ratios.    The best measurement of arrears
and impairments on the short term products is against instalments due
and not outstanding balances, because a large part of a short term
loan is repaid before month-end/year-end and is therefore not
reflected on the balance sheet. Computations based on the outstanding
balance therefore distort this ratio on short term products.




                                                              5|Page
Insurance

Finbond has strategically repositioned the product offering and
underwriting   components  of   our  insurance   offering.  Finbond’s
insurance business is now managed on an arm’s length basis by the PSG
subsidiary, African Unity Insurance under a long term insurance
license which releases Finbond from the capital adequacy requirements
imposed by the previous cell captive arrangement and improves capital
utilization.

Under this new arrangement, Finbond expanded and enhanced the
insurance benefits to our customers which, inter alia includes:

  -   More comprehensive insurance cover with added benefits at the
      same cost to the customer;
  -   Cover that includes a broader definition for loss of income;
  -   Cover for a reduction in monthly income such as cutbacks in
      working hours;
  -   Proportional cover when a partial premium is received;
  -   No waiving period subject to terms and conditions;
  -   Faster more efficient claims process;

Total Insurance Revenue for the period under review amounted to R 75
million (Feb 2014: R 56.3 million). The income statement includes a
net increase in after tax earnings of R 8.6 million relating to core
insurance trading activities, resulting from efficiencies under the
new structure and a release of previously earned profits no longer
required to be held as solvency reserves under the cell captive
arrangements. It is expected that the new insurance arrangement will
yield better Total Insurance Revenue and returns to Finbond in
ensuing financial years and that it will be less affected, if at all,
by expected changes to credit life insurance and cell captive
regulations.

Liquidity

Finbond’s liquidity position at the end of February 2015 reflects
R 197.5 million cash in bank (Feb 2014: R 86.8 million). Cash, cash
equivalents and liquid investments increased by 13.9% to R 570.2
million (Feb 2014: R 500.5 million), as Finbond has continued to
practice conservatism in its approach to liquidity risk management.

Cash Received as a percentage of Cash Granted for the period of March
2014 to February 2015 averaged 141% showing an improvement in overall
collections since the 138% achieved in the previous financial year.



                                                              6|Page
By the end of February 2015 the deposit book had grown by 32.5% to
R 921.9 million from R 695.9 million at the of February 2014, with an
average interest rate of 9.38%, an average term of 26.6 months and an
average deposit size of R 338,184.

Finbond is not exposed to the uncertainty that accompanies the use of
corporate call deposits as a funding mechanism since Finbond only
accepts 6 – 72 month fixed and indefinite term deposits. Given the
long term nature of Finbond’s liabilities (fixed term deposits with
average term of 26.6 months) and short term nature of its assets
(short term micro loans with an average term just more than 3.5
months), Finbond possesses a low risk liquidity structure as a result
of this positive liquidity mismatch.

Capital Position

Finbond Mutual Bank follows a conservative approach to capital
management holding a level of capital which supports the business
while also growing its capital base ahead of business requirements.

Our Capital position remains very strong. Finbond Mutual Bank
continued to trade well above the minimum regulatory capital
requirement throughout the financial year, reflecting an excess of
qualifying capital amounting to R 120.7 million over and above
Finbond’s specific prudential minimum requirement at financial year
end, and an excess of R 298.1 million over and above the standard
DI 400 required minimum for Mutual Banks.

Although Finbond as a Mutual Bank is not subject to the Basel III
requirements, Finbond Mutual Bank already not only complies with, but
significantly exceeds the key Basel III requirements set for 2018 and
2019. As at 28 February 2015 Finbond’s:

  -   liquidity coverage ratio % was 204% (104% more than required from
      2019);
  -   net stable funding ratio % was 579% (479% more than required from
      2018); and
  -   capital adequacy ratio % was 35.1% (25.1% more than required from
      2018).

Increasing Footprint

Face to face communication and excellent  customer   service are an
integral part of our business model.

During the past financial year Finbond increased its branch network
by 86 branches to 286 branches in South-Africa of which 86 are

                                                                7|Page
located in Gauteng, Limpopo and Mpumalanga, 57 in Kwazulu Natal, 59
in the Western Cape, 45 in the Eastern Cape and 39 in the Free State
and North West. As part of our client centric focus we ensured that
our distribution channels reflect the demographics of our clients.

During the past year we also increased our capacity at existing
branches by increasing the number of consultant work stations. Across
the bank we created an additional 286 jobs.

We intend to open 40 - 60 branches in the current financial year and
thereafter approximately 40 branches per year for the next five
years.


Credit rating

During the 2015 financial year, Finbond was awarded an investment
grade rating by ratings agency Global Credit Ratings (“GCR”). GCR
upgraded Finbond’s BB+(ZA) National Scale Long Term Corporate Credit
Rating with a Stable Outlook to BBB-(ZA), with the outlook accorded
as Stable on 30 October 2014. GCR also affirmed Finbond’s Short Term
Credit Rating of A3 with a Stable Outlook and Finbond’s Long Term
International Scale Corporate Credit Rating of BB with a Stable
Outlook on the same date.

According to GCR, the ratings are based on the following key factors:
- “Finbond Group Limited’s (“Finbond”, “the group”) growing
franchise as a leading player in short-term microfinance, providing
short- and medium-term credit, insurance and savings products through
281 branches, and its transactional banking ambitions.
- Adequate capital, conservative credit/risk management, and
improving profitability/earnings diversification (despite regulatory
risk) support the rating, which excludes the prospect of systemic
support, given its low likelihood. The rating outlook considers
Finbond’s prospects/strategic direction, within the context of the
negative consumer health, debt affordability, and credit trends.
- High   liquidity   levels   (46%    of   assets)   and   adequate
capitalisation (Finbond Mutual Bank’s capital adequacy ratio (“CAR”)
was 34% at 1H F15) support the moderate credit appetite. The
loan/deposit ratio fell from 65.2% (FYE14) to 30.3% (1H F15).
- Asset quality appeared stable despite gross advances growth of
69.7% in F14 (1H F15: 23.5%). As c.80% of Finbond’s loans issued are
short-term, traditional asset quality measures may overstate the bad
debt experience. Gross and net impairment ratios (impairments being
instalments in arrears) have declined since FYE13 to 20.1% and 12.1%,
and net impairments vs. instalments due (management’s key impairment
measure) fell from 6.3% (FYE14) to 5.8% (1H F15). Over the same


                                                               8|Page
period, collection rates remained strong, loan rejection rates rose,
and stability was noted in arrears as a proportion of loans, and
arrears roll-rates. Provisioning appeared adequate. However, close
monitoring is required given the challenging market conditions.
- In F14, operating income rose by 34.3% to R236.1m (net income –
80.3% to R36.9m). Despite 21.9% cost growth in F14 driven by loan
volumes and risk systems/infrastructure enhancement, the cost/ income
ratio declined to 69.6% (F13: 76.7%). Impairment costs grew 25.8% in
F14 and 90.0% in 1H F15, highlighting a lagged effect of loan book
size and term extension.
- Finbond appears well placed to develop its business profitably
and conservatively, despite the challenging operating environment.”

Property Investments

Two independent valuations by professional valuers registered with
the South African Institute of Valuers were again obtained as at 28
February 2015, as required by IAS 40 and the Group’s accounting
policy.    The independent valuations revalued Finbond’s property
portfolio at R248.8 million (February 2014: R242.6 million).

The R248.8 million in development properties on Finbond’s Balance
sheet are held as passive long term investments. The intention is to
realize a profit over the medium to long term and to invest the cash
realized into the Micro Finance Business.




                                                              9|Page
Prospects

The challenging and difficult macro-economic environment as well as
the adverse market conditions in the markets within which Finbond
operates, are not expected to abate in the short and medium term.
However, we remain confident that we have the required resources and
depth in management to successfully confront and overcome these
various challenges.

Finbond remains positive about the prospects for the future due to
the following key aspects of the business:

  -   Improvement achieved in earnings and profitability despite
      difficult market conditions;
  -   Improvement   achieved   in   cash   generated   from   operating
      activities;
  -   Management expertise;
  -   Strong Cash Flow;
  -   Strong Liquidity and surplus cash position;
  -   Uniquely positioned 286 Branch Network;
  -   Superior Asset Quality;
  -   Access to funding;
  -   Strong Capital Adequacy;
  -   Ability   to   leverage   the  existing   cost   platform   while
      diversifying income streams;
  -   Conservative Risk Management; and
  -   Growth potential in the Micro Finance and Mutual Banking markets
      arising from the exit of certain competitors in recent times.

Finbond’s strong capital position, significant surplus cash, robust
liquidity and funding profile together with its conservative approach
to risk management, position the business well both in adverse market
conditions and as markets improve.

References to future financial performance included anywhere in this
announcement have not been reviewed or reported on by the group’s
external auditors.

Dividend

Notice is hereby given that a gross ordinary dividend of 3.4 cents
per share (2014: 2.1 cents) has been declared out of income reserves
on 16 April 2015 in respect of the financial year ended 28 February



                                                               10 | P a g e
2015 and is payable to ordinary shareholders in accordance with the
timetable below.

In terms of dividend tax effective since 1 April 2012, the following
additional information is disclosed:
- The local dividend tax rate is 15%;
- 605,025,250 shares are in issue of which the Group holds
   15,411,082;
- The net ordinary dividend is 2.89 cents per share for ordinary
   shareholders who are not exempt from dividends tax; and
- Finbond Group Limited’s tax reference number is 9194313145.

Timetable:

Declaration date                                   Thursday, 16 April 2015
Last day to trade cum dividend                     Friday, 8 May 2015
Shares commence trading ex-dividend                Monday, 11 May 2015
Record date                                        Friday, 15 May 2015
Dividend payment date                              Monday, 18 May 2015

No dematerialization or rematerialization of shares will be allowed
for the period from Monday 11 May 2015 to Friday 15 May 2015, both
dates inclusive.

Dividends are declared in the currency of the Republic of South
Africa. The directors have confirmed that the company will satisfy
the liquidity and solvency requirements immediately after the
payment of the dividend.

AUDITED CONSOLIDATED RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY-
2015

STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2015
Figures in Rand                              2015           2014         movement
Interest income                       145 456 503     93 018 672             56%
Interest expense                      -76 136 528    -44 286 052            -72%
Net interest income                    69 319 975     48 732 620             42%
Fee income                            170 127 896    112 731 141             51%
Management fee income                  27 765 974     20 736 996             34%
Other microfinance income              79 685 790     28 499 859            180%
Operating profit from Cell captive
arrangement                            30 611 709     22 804 330             34%
Fair value adjustments                  1 790 507      4 957 526            -64%
Net commission expense                 -3 384 258     -2 374 768            -43%
Net impairment charge on loans and    -60 136 892    -24 940 770           -141%


                                                                           11 | P a g e
advances
Operating expenses                   -242 417 723    -164 294 444           -48%

Profit/(loss) before taxation          73 362 978      46 852 490            57%
Taxation                              -22 495 603      -9 934 869          -126%
Total profit and comprehensive income
for the year                           50 867 375      36 917 621            38%
Profit attributable to:
Owners of the parent                   50 867 375      36 917 621            38%
Non-controlling interest - Continuing
operations                                      -               -             0%
Basic earnings/(loss) per share
(cents)                                       8.6             6.1            41%

RECONCILIATION OF HEADLINE EARNINGS/(LOSS) PER SHARE
Figures in rand                                   2015              2014     Movement
Net profit/ (loss) attributable to
                                            50 867 375        36 917 621          38%
ordinary equity holders of the parent
Adjusted for:
Loss/ (profit) on disposal of
                                                88 814            92 920          -4%
property, plant and equipment
Loss/ (profit) on disposal of
property, plant and equipment included         123 352           129 056          -4%
in basic earnings
Tax effect of Loss on disposal of
                                               -34 538           -36 136          -4%
property, plant and equipment
Revaluation of investment properties        -3 255 988        -3 288 184          -1%
Fair value adjustment of investment
properties included in basic earnings       -4 002 345        -4 042 854          -1%

Tax effect of Fair value adjustment of
                                               746 357           754 670          -1%
investment properties
Gains/losses on the loss of control of
                                             3 480 948                 -         100%
a subsidiary
Gains on the loss of control of a
subsidiary included in basic earnings       -4 683 216                 -         100%

Tax effect on gains on the loss of
                                             8 164 164                 -         100%
control of a subsidiary
Headline profit                             51 181 149        33 722 357         52%
Headline earnings/(loss) per share
(cents)                                            8.6               5.6         54%
                                                                                          
Diluted headline earnings/(loss) per
share (cents)                                      8.6               5.6         54%                                                                                54%

STATEMENT OF FINANCIAL POSITION
 Figures in Rand                                 2015            2014                  Movement
 Assets
 Cash and cash equivalents                 197 499 520     86 759 771                    128%
 Other financial assets                    372 772 262    413 720 500                    -10%
 Loans and other advances to customers     290 715 142    210 988 685                     38%
 Other receivables                          57 553 494     18 132 659                    217%


                                                                                  12 | P a g e
Inventories                                  2 566 657               -                    100%
Current tax receivable                       2 531 705       3 759 606                    -33%
                                                                                           
Property, plant and equipment               46 044 154      22 567 979                     104%
                                                                                           
Investment property                        248 820 000     242 620 028                       3%
                                                                                             
Goodwill                                   120 033 629      62 596 218                      92%
                                                                                            
Intangible Assets                              171 000               -                      100%
Deferred tax                                10 544 541      24 701 780                      -57%
Total Assets                             1 349 252 104   1 085 847 226                       24%

 Liabilities
 Trade and other payables                   26 297 683        20 100 205                       31%
 Fixed and Notice deposits                 921 933 480       695 902 092                       32%
 Transactional deposits                         69 220                 -                      100%
 Current tax payable                             1 947             8 726                      -78%
 Finance lease obligation                    1 532 266         1 327 599                       15%
 Loans from shareholders                    15 000 000                 -                      100%
 Deferred tax                               38 513 237        38 905 996                       -1%
 Total liabilities                       1 003 347 833       756 244 618                       32%
 Equity
 Equity Attributable to Equity Holders
of Parent
 Share capital & premium                   201 522 768       225 952 568                      -11%
 Reserves                                    3 428 404         4 875 698                      -30%
 Accumulated profit/ (loss)                141 777 151        99 598 394                       42%
 Equity attributable to owners of the
Company                                    346 728 323     330 426 660                   5%
 Non-controlling interest                     -824 052        -824 052                   0%
 Total equity                              345 904 271     329 602 608                   5%
 Total equity and liabilities            1 349 252 104   1 085 847 226                  24%

STATEMENT OF CHANGES IN
EQUITY
Figures in Rand                Share        Reserves        Retained                Total
                           capital and                       income            attributable
                             premium                                             to equity
                                                                                holders of
                                                                               the group /
                                                                                  company
Balance at 1 March 2013    239 162 377      3 913 339       62 680 773          305 756 489
Total comprehensive
income for the year                -                 -      36 917 621           36 917 621
Equity settled share
based payment charge               -           962 359                             962 359
Treasury shares
purchased                  -13 209 809            -                -            -13 209 809
Balance at 1 March 2014    225 952 568      4 875 698       99 598 394          330 426 660
Total comprehensive
income for the year                -                 -      50 867 375           50 867 375



                                                                               13 | P a g e
Equity settled share
based payment charge                  -      2 408 916                  -         2 408 916
Transfers between
reserves                              -     -3 856 210         3 856 210                     -
Treasury shares
purchased                   -24 429 800             -                 -        -24 429 800
Dividends                           -               -         -12 544 828      -12 544 828
Balance at 28 February
2015                        201 522 768      3 428 404        141 777 151      346 728 323
STATEMENT OF CHANGES IN
EQUITY
Figures in Rand                Non-       Total equity
                           controlling
                             interest



Balance at 1 March 2013        -824 052   304 932 437
Total comprehensive
income for the year                   -    36 917 621
Equity settled share
based payment charge                  -       962 359
Treasury shares
purchased                           -     -13 209 809
Balance at 1 March 2014        -824 052   329 602 608
Total comprehensive
income for the year                   -    50 867 375
Equity settled share
based payment charge                  -     2 408 916
Transfers between
reserves                              -             -
Treasury shares
purchased                             -   -24 429 800
Dividends                             -   -12 544 828
Balance at 28 February
2015                           -824 052   345 904 271

STATEMENT OF CASH FLOWS
For the year ended 28 February 2015
Figures in Rand                              2015               2014             Movement

Cash flows from operating activities
Cash generated from operations              161 165 587       477 213 193            -66%
Tax paid                                     -8 542 750       -13 292 248            -36%
Net cash from operating activities          152 622 837       463 920 945            -67%
Cash flows from investing activities
Purchase of property, plant and
equipment                                   -31 946 505        -9 117 732               250%
Sale of property, plant and equipment         1 740 518          691 084               152%
Purchase of investment property              -2 197 627       -5 571 292               -61%
Purchase of other intangible assets         -57 608 411       -1 333 915              4219%



                                                                              14 | P a g e
Purchase of financial assets                -589 187 327         -387 967 244                   -52%
Sale of financial assets                     660 977 239                    -                   100%
Net cash from investing activities           -18 222 112         -403 299 099                   -95%
Cash flows from financing activities
Reduction of shares capital or buy
back of shares                               -24 819 437          -13 209 809                   88%
Repayment of other financial
liabilities                                                 -     -23 488 649               -100%
Proceeds from shareholders loan               15    000   000               -                100%
Finance lease payments                        -1    136   009        -133 733                749%
Dividends paid                               -12    705   530               -                100%
Net cash from financing activities           -23    660   976     -36 832 191                -36%
Total cash movement for the year             110    739   749      23 789 655                365%
Cash at the beginning of the year             86    759   771      62 970 116                 38%
Total cash at the end of year                197    499   520      86 759 771                128%

SEGMENTAL REPORT
                                       Investment             Micro            Property
Figures in rand                        Products             Finance          Investment
12 Months ended 28 February 2015
Interest income                         23 576 972         119 768 448           27 798
Interest expense                       -37 700 477         -16 049 451              112
Net interest income                    -14 123 505         103 718 997           27 910
Fee income                                  -2 000         169 835 221          289 965
Management fee income                            -                   -               -
Other microfinance income                  515 185          50 104 791               -
Operating profit from Cell Captive
arrangement                                      -          30 611 709               -
Fair Value adjustment                   -2 211 838                   -        4 002 345
Net commission income                            -          -3 384 258               -
Net impairment charge on loans and
advances                                         -         -57 959 210       -923   334
Operating expenses                      -1 654 244        -225 112 409       -926   739
Profit/(loss) before taxation          -17 476 402          67 814 841      2 470   147
Taxation                                         -              71 234        171   012
(Loss)/ profit for the period          -17 476 402          67 886 075      2 641   159
(Loss)/ profit for the period
attributable to:
Owners of the company                  -17 476 402          67 886 075        2 641 159
Non-controlling interest                         -                   -               -

Significant segment assets             524 654 701         494   604   198      248 857 930
Cash and cash equivalents              154 925 488          42   536   102           37 930
Other Financial Assets                 369 719 612           3   052   650                -
Loans and advances                               -         290   715   142                -
Inventories                                      -                       -                -



                                                                                 15 | P a g e
Property, Plant and Equipment              9 601     38 266 675                  -
Investment property                            -              -        248 820 000
Goodwill                                       -    120 033 629                  -

Significant segment liabilities      921 933 480              -                  -
Deposits received from customers     921 933 480              -                  -
Transactional deposits                         -              -                  -
Loans from shareholders                        -              -                  -

*The Reconciling column represents
Group Shared Services

SEGMENTAL REPORT

                                     Investment       Micro             Property
Figures in rand                      Products       Finance           Investment
12 Months ended 28 February 2014

Interest income                       13 264 721     78   012   417          27 177
Interest expense                     -31 005 074    -13   140   106             -11
Net interest income                  -17 740 353     64   872   312          27 166
Fee income                                     -    112   731   141               -
Management fee income                          -     20   736   996               -
Other microfinance income                      -     27   840   164         658 248
Operating profit from Cell Captive
arrangement                                    -     22 804 330                   -
Fair Value adjustment                    914 672              -                   -
Net commission income                    258 128    -19 827 082             115 836
Net impairment charge on loans and
advances                                       -    -24 899 428                    -
Operating expenses                    -1 902 024   -143 162 077           -530   045
(Loss)/ profit before taxation       -18 469 577     61 096 352            271   205
Taxation                                       -        -13 865           -203   382
(Loss)/ profit for the period        -18 469 577     61 082 487             67   823
(Loss)/ profit for the period
attributable to:
Owners of the company                -18 469 577    61 082 487               67 823
Non-controlling interest                       -             -                    -

Significant segment assets           438 568 800    272 002 607        243 527 577

Investment property                            -              -        242 620 028
Loans and advances                             -    210 998 685                  -
Cash and cash equivalents             55 904 318     29 947 904            907 549
Other Financial Assets               382 664 482     31 056 018                  -




                                                                         16 | P a g e
Significant segment liabilities        695 902 092
Deposits received from customers       695 902 092            -                  -

*The Reconciling column represents
Group Shared Services

SEGMENTAL REPORT

                                     Transactional
Figures in rand                         Banking      Reconciling*       Consolidated
12 Months ended 28 February 2015
Interest income                                  -      2 083 285          145 456 503
Interest expense                          -127 513    -22 259 199          -76 136 528
Net interest income                       -127 513    -20 175 914           69 319 975
Fee income                                   8 562         -3 852          170 127 896
Management fee income                            -     27 765 974           27 765 974
Other microfinance income                       11     29 065 803           79 685 790
Operating profit from Cell Captive
arrangement                                      -              -           30 611 709
Fair Value adjustment                            -              -            1 790 507
Net commission income                            -              -           -3 384 258
Net impairment charge on loans and
advances                                         -     -1 254 348          -60 136 892
Operating expenses                      -2 075 799    -12 648 532         -242 417 723
Profit/(loss) before taxation           -2 194 739     22 749 131           73 362 978
Taxation                                         -    -22 737 849          -22 495 603
(Loss)/ profit for the period           -2 194 739         11 282           50 867 375
(Loss)/ profit for the period
attributable to:
Owners of the company                   -2 194 739         11 282           50 867 375
Non-controlling interest                         -              -                    -

Significant segment assets               4 163 431      6 171 104        1 278 451 364
Cash and cash equivalents                        -              -          197 499 520
Other Financial Assets                           -              -          372 772 262
Loans and advances                               -              -          290 715 142
Inventories                              2 566 657              -            2 566 657
Property, Plant and Equipment            1 596 774      6 171 104           46 044 154
Investment property                              -              -          248 820 000
Goodwill                                         -              -          120 033 629

Significant segment liabilities             69 220     15 000 000          937 002 700
Deposits received from customers                 -              -          921 933 480
Transactional deposits                      69 220              -               69 220
Loans from shareholders                          -     15 000 000           15 000 000

*The Reconciling column represents


                                                                          17 | P a g e
Group Shared Services


SEGMENTAL REPORT

                                     Transactional
Figures in rand                         Banking      Reconciling*       Consolidated
12 Months ended 28 February 2014

Interest income                                  -      1 714 357           93 018 672
Interest expense                                 -       -140 861          -44 286 052
Net interest income                              -      1 573 496           48 732 620
Fee income                                       -              -          112 731 141
Management fee income                            -              -           20 736 996
Other microfinance income                        -          1 447           28 499 859
Operating profit from Cell Captive
arrangement                                      -              -           22 804 330
Fair Value adjustment                            -      4 042 854            4 957 526
Net commission income                            -     17 078 350           -2 374 768
Net impairment charge on loans and
advances                                         -        -41 342          -24 940 770
Operating expenses                               -    -18 700 298         -164 294 444
(Loss)/ profit before taxation                   -      3 954 507           46 852 490
Taxation                                         -     -9 717 622           -9 934 869
(Loss)/ profit for the period                    -     -5 763 115           36 917 621
(Loss)/ profit for the period
attributable to:
Owners of the company                            -     -5 763 115           36 917 621
Non-controlling interest                         -              -                    -

Significant segment assets                       -              -          954 098 984

Investment property                              -              -          242 620 028
Loans and advances                               -              -          210 998 685
Cash and cash equivalents                        -              -           86 759 771
Other Financial Assets                           -              -          413 720 500

Significant segment liabilities                                            695 902 092
Deposits received from customers                 -              -          695 902 092

*The Reconciling column represents
Group Shared Services

BASIS OF PREPARATION

These Finbond Group Limited (“the Group”) financial results for the
year ended 28 February 2015 constitute a summary (prepared in
accordance with the JSE Listing Requirements, the South African

                                                                          18 | P a g e
Companies Act (Act 71 of 2008) as amended, and the recognition and
measurement   requirements of   International   Financial  Reporting
Standards and the presentation and disclosure requirements of
International Accounting Standard 34 and the Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards
Council.

These summarized consolidated financial statements do not include all
of the information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 28 February
2015.

These summarized consolidated financial statements are extracted from
the Group’s audited financial statements and are not itself audited.
The directors take full responsibility for the preparation of these
summarized consolidated financial statements and the financial
information has been correctly extracted from the Group’s audited
financial statements.

The accounting policies applied by the Group in these summarized
consolidated financial statements are consistent with those applied
in the previous year.

Audit opinion

The Group’s financial statements have been audited by the Company’s
auditors, KPMG Inc., who have expressed an unmodified opinion which
is available for inspection at the Company’s registered office.

Annual report

The Company`s annual report, together with a notice convening the
annual general meeting, will be mailed to Finbond shareholders before
the end of May 2015, at which time an announcement incorporating
details of the annual general meeting will be published on SENS.


For and on behalf of the Board

Dr. Malesela Motlatla                        Dr. Willie van Aardt
16 April 2015
--------------------------------------------------------------------
Directors




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Chairman: Dr MDC Motlatla* (BA, DCom (Unisa)); Chief Executive
Officer: Dr W van Aardt (BProc (Cum Laude), LLM (UP), LLD (PU CHE)
Admitted Attorney of The High Court of South Africa, QLTT (England
and Wales), Solicitor of the Supreme Court of England and Wales); HJ
Wilken-Jonker* (BComHons (Unisa); Chief Financial Officer: GT Sayers
(CA (SA), BCom (Hons) (UNP), BCompt (Hons) (Unisa)); Adv J Noeth* (B
Iuris   LLB);   Adv.   N  Melville*   (B   Law,   LLB(Natal)   LLM(cum
laude)(Natal)SEP(Harvard) RN Xaba* (CA (SA) BCompt, BCompt (Hons)
(Unisa))R Emslie* (B Comm Law, Hons Acc, CA (SA)) D Brits* (B Com,
MBA) (NW) *Non-Executive. Secretary: CD du Plessis – Sekretari


Transfer secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)


Sponsor:   Grindrod Bank Limited




                                                              20 | P a g e

Date: 16/04/2015 01:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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