ZB Financial : 2023 FY Results & Audit Report

April 21, 2023 at 02:50 am EDT

AUDITED INFLATION ADJUSTED FINANCIAL HIGHLIGHTS

Total assets

Total capital and reserves

Net profit after tax

85% 114% 389%

31 Dec 2022	31 Dec 2022	31 Dec 2022
ZW$321bn	ZW$148.37bn	ZW$34.71bn

31 Dec 2021	31 Dec 2021	31 Dec 2021
ZW$173.60bn	ZW$69.20bn	ZW$7.10bn

Return on equity	Liquidity ratio	Cost to income ratio
19pps	10pps	11pps

31 Dec 2022		31 Dec 2022	31 Dec 2022
32%	72%	58%
31 Dec 2021		31 Dec 2021	31 Dec 2021
13%	62%	69%

pps - percentage points

CHAIRMAN'S STATEMENT

I am pleased to present the performance of the Group for the year ended 31 December 2022. The Group delivered strong financial results despite the domestic economic challenges.

Operating Environment:

The domestic economy is estimated to have grown by 4% in 2022, underpinned by output growth in mining (10%), construction (10.5%), and accommodation and food services (56.3%). The country benefitted from an above average agriculture season, which culminated in good output in key crops, including wheat and tobacco.

Furthermore, the economy registered significant improvements in foreign currency receipts, upwards of US$11.6bn according to the Reserve Bank of Zimbabwe (RBZ). Export earnings and Diaspora remittances were amongst the major contributors of the record foreign currency receipts achieved in 2022.

Partly as a result of the improved foreign currency receipts, and in part as a result of continued depreciation of the local currency, the economy recorded an increase in the use of USD currency for trade, with the RBZ estimating that close to 70% of transactions are now being conducted in hard currency.

Meanwhile, annual inflation remained high during the year under review, rising from 60.6% in January 2022 to 243.75% as at December 2022. There was however an improvement in month on month inflation which rose from 5.3% in January 2022 to a peak of 30.7% in June 2022, before progressively reducing to a yearly low of 1.8% in November 2022 and ending the year at 2.4% in December 2022.

Group Performance:

The Group posted a profitable performance for the year. This is detailed in the Group Chief Executive Officer's report.

Capital Requirements:

As at 31 December 2022, all Group companies, with the exception of ZB Building Society, were in compliance with prescribed minimum capital requirements. The Group is still working to consolidate all its banking operations under one licence, that is, merging ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation.

Dividends:

The Board has declared a final dividend of ZW837.49 cents per share for the year ended 31 December, 2022. This brings the aggregate dividend for the year ended 31 December 2022 to ZW914.67 cents per share. A separate dividend notice will be published to this effect.

Compliance & Regulatory Issues:

The Group dealt with all governance issues which were the subject of a Corrective Order issued by the Reserve Bank of Zimbabwe (RBZ) on 7 March, 2017 and reviewed in March 2018, and the Corrective order was lifted on the 9th of December 2022, after a satisfactory review by the regulator.

Sustainability:

The Group embarked on a journey of integrating sustainability into its business value chains. The integration goes beyond the current process of attaining the Sustainability Standards Certification Initiative (SSCI) by the European Organisation for Sustainable Development (EOSD). Our goal is to ensure sustainability is fully embedded in our products and services, operations, how we engage with our clients, and business relations. Sustainability will now define how ZB Financial Holdings does business going forward.

Directorate:

Mr K. Maukazuva resigned from the Board on 31 August 2022. I would like to extend my gratitude and appreciation to him for his distinguished service to the Group.

Mrs Georgina Chikomo, resigned from the Group with effect from the 1st of September 2022. She was the Managing Director for ZB Bank Limited. I wish Mrs Georgina Chikomo success in her future endeavours.

In her stead, Mr Elisha Chibvuri was appointed as the new Chief Executive Officer for ZB Bank Limited.

The Group underwent an organisational transformation program, which led to a restructure of the organisation.

The Group is now made up of three main clusters, namely Banking, Investment and Insurance Clusters. The following appointments were made for the Chief Executive Officers of the Clusters:

Elisha Chibvuri-Banking Cluster; Tandiwe Masunda-Investments Cluster; and Letwin Mawire-Insurance Cluster.

I pledge the Board's support to Mr E. Chibvuri, Ms T Masunda and Mrs L Mawire and wish them enjoyable and successful terms of office.

Outlook:

In the outlook, the domestic economy is projected to grow by 3.8% in 2023, underpinned by growth in output from the mining, construction, agriculture and accommodation (tourism) sectors. The envisaged growth is mainly premised on normal to above normal rainfall patterns and optimal distribution thereof, favourable international commodity prices, continuance of tight monetary and fiscal policies to engender stability, as well as continued slowdown in inflation, among other factors.

Downside risks to the attainment of projected economic growth outturn for 2023 relate to effects of power shortages and load shedding on production, the continued effects of disruptions in global supply chains and rising global inflation, uncertainty and potentially destabilising effects of the 2023 harmonised national elections, monetary instability (exchange rate depreciation and inflation), unreliable rainfall patterns and distribution, among other factors.

The Group will continue to focus on revenue growth and cost optimisation strategies with an overal aim of growing and strengthening the balance sheet position. The Group will continue with its Organisational Transformation Programme focussing more on improving the effectiveness and efficiencies of back-end systems.

Conclusion:

I would like to express my appreciation to our valued customers and all key stakeholders, for the continued support to the ZBFH Group. I extend my gratitude to Board colleagues, Management and Staff, without whose collective contributions the Group would not have been able to achieve the 2022 performance.

P.Chiromo

Chairman

19 April, 2023

GROUP CHIEF EXECUTIVE'S REPORT

Introduction:

The Group's primary financial statements are adjusted for inflation in terms of International Accounting Standard (IAS) - Financial Reporting in Hyperinflationary Economies.

Historical cost financial statements have been issued for information purposes only.

Performance Outturn:

The Group recorded a 75% increase in total income from ZW$40.343bn in 2021 to ZW$70.542bn in 2022. This positive outturn was achieved on the back of significant rise in trading income and fair value credits.

Net interest income increased by 77%, from ZW$11.359bn in 2021 to ZW$20.050bn in 2022. The performance was underpinned by the growth in the loans and advances book. Gross loan impairment charges to the income statement surged by 229%, from ZW$2.136bn in 2021 to ZW$7.035bn in 2022. As a result, net income from lending activities registered a growth of 41%, from ZW$9.224bn in 2021 to ZW$13.015bn in 2022.

The Group's commissions and fees moved up by 38% from ZW$11.570bn in 2021 to ZW$15.910bn. The improvement in commissions was supported by growth in both number of customers and volume of transactions as a result of the Group's Organisational Transformation Programme journey.

Other operating income improved by 394% from ZW$4.500bn in 2021 to ZW$22.237bn. Other income largely constituted by the realised foreign exchange gains from treasury trading activities and unrealised gains from revaluation of the Group's foreign denominated balances.

Fair value adjustments moved from ZW$12.195bn in 2021 to ZW$15.492bn, as a result of higher fair value gains from investment properties.

Net insurance related earnings increased by 36%, from ZW$2.854bn in 2021, to ZW$3.889bn in 2022, on the back of a 120% rise in gross premiums from ZW$6.814bn in 2021 to ZW$15.014bn in 2022, which was partially off-set by a rise in insurance related expenses by 181% from ZW$3.960bn in 2021 to ZW$11.125bn in 2022.

Meanwhile, operating costs rose by 46% from ZW$27.925bn in 2021 to ZW$40.708bn in 2022, largely on account of the effects of inflation.

Profit from ordinary activities improved by 140%, from ZW$12.418bn in 2021 to ZW$29.834bn in 2022.

Performance was also enhanced by a 1 909% rise in share of associate companies' profit net of tax, from ZW$0.269bn in 2021 to ZW$5.395bn in 2022.

Net profit registered a 391% increase, from ZW$7.074bn attained in 2021 to ZW$34.715bn in 2022.

Meanwhile, total assets for the Group increased by 85% in real terms, to close the year 2022 at ZW$320.964bn. A rebalancing of the asset mix was undertaken during the year through acquisition of Mashonaland Holdings, which saw a 516% increase in investment properties.

Deposits and other related funding account balances grew by 62%, from ZW$67.616bn as at 31 December 2021 to ZW$109.210bn as at 31 December 2022.

Earning assets increased by 95% from ZW$99.353bn as at 31 December 2021 to close the year 2022 at ZW$194.232bn, whilst constituting 61% of total assets (57% at 31 December 2021).

The Group maintained a comfortable liquidity margin of safety, with the ratio of liquid assets to customer deposits being above 60% throughout the year against a prescribed ratio of 30%.

The Group's total equity increased by 114%, from ZW$69.189bn as at 31 December 2021 to ZW$148.370bn as at 31 December 2022, underpinned by the positive performance outturn for the year, as well as gains on the revaluation of properties and equipment.

Operations Review:

Banking Operations:

ZB Bank Limited posted a profit after tax of ZW$14.523bn in 2022, as compared to ZW$6.413bn in 2021. Its total assets stood at ZW$200.360bn as at 31 December 2022, from ZW$127.290bn as at 31 December 2021.

ZB Building Society posted a profit after tax of ZW$4.472bn in 2022, as compared to a profit of ZW$2.807bn in 2021. The Society's total assets stood at ZW$17.742bn as at 31 December 2022, from ZW$10.093bn as at 31 December 2021.

Insurance Operations:

ZB Reinsurance posted a profit after tax of ZW$1.951bn in 2022 compared to ZW$1.538bn in 2021. Its total assets increased in real terms from ZW$6.396bn as at 31 December 2021 to close the year 2022 at ZW$9.945bn.

ZB Life Assurance posted a profit of ZW$2.324bn in 2022, compared to a loss of ZW$0.097bn in 2021. Its total assets increased in real terms from ZW$20.240bn as at 31 December 2021 to ZW$28.094bn as at 31 December 2022.

Strategic Operations:

The Group has adopted a regional expansion strategy, and in November 2022, it successfully launched reinsurance operations in Botswana.

During the year, the Group acquired additional equity interest in Mashonaland Holdings Limited (Mash) and achieved a shareholding of above 50%, granting it control of Mash and subsequently became a subsidiary of the Group with effective 31December 2022.

Internal Processes:

The Group progressed its transformation program during 2022, which entailed a review of its business model and organisational design. The Group's project to re-purpose bank branches into Group-wide customer service centres to enhance customer convenience has been a huge success, and as at end of December 2022, a total of 25 branches had been renovated and converted into customer service centres. The remaining 20 will be done in 2023.

Sustainability:

The Group continue to integrate sustainability across operations; this compels ZBFH to strike a balance between the welfare of the People it serves, the preservation and promotion of the Environment (Planet) in which it operates, and the quest for Value Creation (Profit). Towards this end, the Group is working on attaining certification under the Sustainability Standards Certification Initiative (SSCI) by the European Organisation for Sustainable Development (EOSD) - ZBFH is one of the financial institutions under the RBZ-led SSCI certification program.

The Group adopted a Purpose Statement to "improve lives through service", and its 3 High Impact Goals: "Promote financial inclusion", "Foster investments in Sustainable Infrastructure", and "Stimulate the Real Economy". The goals are structured to ensure ZBFH avails resources towards supporting Government's National Development Strategy 1 (NDS1), and the Sustainable Development Goals (SDGs), towards the country's Vision 2030.

To demonstrate our commitment to sustainability, the Group commenced greening its own premises by rolling out solar energy. To date, solar power has been installed at the Group's Head Office, and service centres across the country will be added in 2023.

Further, the Group adopted the Global Reporting Initiatives (GRI) Standards as a strategy for identifying and being accountable on economic, environmental, social, and governance impacts and opportunities while building shared values with stakeholders. To this effect, the Group has prepared this annual report in accordance with GRI Standards to demonstrate its commitment to corporate sustainability.

Human Capital:

As part of the organisational transformation, the Group reviewed its organisational design, and came up with a new Group Structure supportive of its Strategy going forward. This resulted in an evaluation of jobs, coming up with new jobs and some old jobs falling away, and resultantly there have been redeployments as well as skilling and training to ensure attainment of required skills set.

Despite a challenging operating environment, staff attrition in the Group remained within acceptable levels.

The Group staff complement as at 31 December 2022 stood at 965.

Industrial relations remained cordial during the year under review.

Appreciation:

I extend my gratitude to our valued customers and all key stakeholders for their continued support and commitment to the ZBFH Group.

My deep appreciation also goes to the Group's Staff and Management team for their hard work and dedication which produced the 2022 financial results.

As ZBFH Group team, we undertake to continue living up to our Mission: "to work hard everyday to create happy people", including but not limited to our customers, employees, shareholders, regulators, among all other stakeholders.

Finally, I would like to thank the Board for its valuable contribution and counsel.

S. T. Fungura

Group Chief Executive

19 April, 2023

0143ZBFH

AUDITOR'S STATEMENT

The consolidated inflation adjusted financial results should be read in conjunction with the complete set of inflation adjusted consolidated and separate financial statements as at and for the year ended 31 December 2022, which have been audited by KPMG Chartered Accountants (Zimbabwe) and an unmodified opinion has been issued thereon indicating that the financial statements present fairly the inflation adjusted consolidated and separate statement of financial position of ZB Financial Holdings Limited as at 31 December 2022 and the inflation adjusted consolidated and separate statement of comprehensive income, the inflation adjusted consolidated and separate statement of changes in equity and the inflation adjusted consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

Inflation adjusted

			Property and			Attributable
			equipment	Financial		to equity	Non
Share	Share	General	revaluation	assets	Retained	holders of	controlling
capital	premium	reserve	reserve	at FVTOCI	income	parent	interests	Total
ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$

The auditors' report includes key audit matters in respect of the valuation of owner-occupied property and equipment and investment property, valuation of Incurred But not reported claims Reserve (IBNR) and life assurance funds and, expected credit loss allowance on loans and advances.

The auditors' report has been made available to management and the directors of ZB Financial Holdings Limited.

The Engagement Partner responsible for the audit was Michael de Beer (PAAB Practicing Certificate Number 0369).

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2022

		Inflation adjusted	*Unaudited Historical cost
		31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	Notes	ZW$	ZW$	ZW$	ZW$
ASSETS
Cash and cash equivalents		61 715 351 709	33 386 228 099	61 715 351 709	9 712 078 202
Treasury bills	3	16 762 999 294	8 285 750 617	16 762 999 294	2 410 330 922
Mortgages and other advances	4.1	64 869 704 742	42 051 861 878	64 869 704 742	12 232 917 414
Financial assets at fair value
through profit or loss		15 994 026 238	14 006 384 419	15 994 026 238	4 074 467 484
Financial assets held at amortised cost	1 107 018 423	2 032 196 187	1 107 018 423	591 167 359
Investments in associates		1 307 334 965	17 683 425 169	905 091 617	4 816 276 853
Inventories		306 747 659	271 701 550	299 332 399	72 791 173
Trade and other receivables		11 305 343 087	6 849 279 788	11 183 791 416	1 992 460 506
Investment properties	5	94 190 767 843	15 293 703 340	94 190 767 843	4 448 949 501
Right of use assets	6	1 597 994 189	760 927 541	372 877 689	102 568 596
Property and equipment	7	49 339 048 115	32 234 411 050	49 166 748 392	9 373 518 085

December 2021

Balance 1 January 2021

Changes in equity for 2021

Profit or loss

Profit for the year

Other comprehensive income, net tax

Revaluation of property

Fair value gain on financial assets at FVTOCI

Transaction with owners of the parent

Dividends paid

Other movements

Transfer to retained income

Effects of inflation adjustments

Balance at 31 December 2021

December 2022

Balance at 1 January 2022

Changes in equity for 2022

Profit or loss

Profit for the year

Other comprehensive income, net of tax

Revaluation of property

Fair value gain on financial assets at FVTOCI

Transaction with owners of the parent

Dividends paid Other movements Opening balance differences Transfer to retained income Effects of inflation adjustments Arising from acquisition of subsidiary Balance at 31 December 2022

401 764 080	6 210 635 659	72 589 119	10 971 232 602	(9 908 493)	19 881 144 429	37 527 457 396	6 884 340 556	44 411 797 952
-	-	-	-	-	5 254 516 620	5 254 516 620	1 819 977 234	7 074 493 854
-	-	-	18 174 288 190	-	- 18 174 288 190	9 278 134	18 183 566 324
-	-	-	-	142 715	-	142 715	-	142 715
-	-	-	-	-	(477 569 212)	(477 569 212)	(7 450 758 )	(485 019 970 )
			(236 427 593)	-	236 427 593	-	-	-
-	-	-	-	3 744 088	-	3 744 088	-	3 744 088
401 764 080	6 210 635 659	72 589 119	28 909 093 199	(6 021 690)	24 894 519 430	60 482 579 797	8 706 145 166	69 188 724 963
401 764 080	6 210 635 659	72 589 119	28 909 093 199	(6 021 690)	24 894 519 430	60 482 579 797	8 706 145 166	69 188 724 963
-	-	-	-	-	29 412 466 242	29 412 466 242	5 302 124 299	34 714 590 541
-	-	-	14 171 319 397	-	- 14 171 319 397	195 896 148	14 367 215 545
-	-	-	-	(1 682 839 576)	- (1 682 839 576)	- (1 682 839 576 )
-	-	-	-	-	(253 440 475)	(253 440 475)	(5 493 705 )	(258 934 180 )
-	-	-	(24 732 931)	-	-	(24 732 931)	-	(24 732 931 )
-	-	-	(28 599 484)	-	28 599 484	-	-	-
-	-	-	-	4 269 976	-	4 269 976	-	4 269 976
-	-	-	-	-	(8 464 496 880)	(8 464 496 880)	40 525 999 485	32 061 502 605
401 764 080	6 210 635 659	72 589 119	43 027 080 181	(1 684 591 290)	45 617 647 801	93 645 125 550	54 724 671 393	148 369 796 943

Intangible assets	8	1 466 532 579	695 956 323	703 404 671	22 206 622
Deferred tax assets		1 000 870 820	22 145 795	972 458 574	101 233
Total assets		320 963 739 663	173 573 971 756	318 243 573 007	49 849 833 950
LIABILITIES

Deposits and other accounts	9	109 210 262 835	67 616 498 841	109 210 262 835	19 669 689 027

*Unaudited Historical Cost

		Functional		Property and			Attributable
		currency		equipment	Financial		to equity	Non
Share	Share	translation	General	revaluation	assets	Retained	holders of	controlling
capital	premium	reserve	reserve	reserve	at FVTOCI	income	parent	interests	Total
ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$

Short term borrowings		-	1 386 491 893	-	403 331 507
Trade and other payables		30 106 674 331	14 616 131 681	29 981 905 063	4 251 843 409
Current tax liabilities		603 087 684	413 690 292	603 087 684	120 342 809
Long term borrowings	11	17 795 055	58 259 293	17 795 055	16 947 671
Life assurance funds		15 125 148 377	10 870 772 488	15 125 148 377	3 162 315 677
Offshore borrowings		6 714 466 000	2 261 634 881	6 714 466 000	657 911 243
Deferred tax liabilities		9 994 374 168	6 750 329 683	9 767 230 215	1 959 555 227
Lease liabilities	10	822 134 270	411 437 741	822 134 270	119 687 540
Total liabilities		172 593 942 720	104 385 246 793	172 242 029 499	30 361 624 110
EQUITY
Share capital		401 764 080	401 764 080	1 751 906	1 751 906
Share premium		6 210 635 659	6 210 635 659	27 081 696	27 081 696
Other components of equity		41 415 078 010	28 975 660 628	36 140 121 639	8 077 241 786
Retained income		45 617 647 801	24 894 519 430	54 932 296 831	8 721 358 380
Functional currency
translation reserve		-	-	101 292 105	101 292 105
Attributable to equity
	93 645 125 550	60 482 579 797	91 202 544 177	16 928 725 873
holders of parent
Non-controlling interests		54 724 671 393	8 706 145 166	54 798 999 331	2 559 483 967
Total equity		148 369 796 943	69 188 724 963	146 001 543 508	19 488 209 840

Total equity and liabilities		320 963 739 663	173 573 971 756	318 243 573 007	49 849 833 950

*The historical cost financial information is shown as supplementary information. This information does not comply with the International Financial Reporting Standards in that it has not taken into account the requirements of International Accounting Standard 29 - Financial Reporting for Hyperinflationary Economies. As a result, the auditors have not expressed

an opinion on the historical financial information.

December 2021

Balance 1 January 2021

Changes in equity for 2021

Profit or loss

Profit for the year

Other comprehensive income, net tax Revaluation of property

Fair value gain on financial assets at FVTOCI

Transaction with owners of the parent

Dividends paid

Other movements

Transfer to retained income

Balance at 31 December 2021

December 2022

Balance at 1 January 2022

Changes in equity for 2022

Profit or loss

Profit for the year

Other comprehensive income, net of tax

Revaluation of property

Fair value gain on financial assets at FVTOCI Transaction with owners of the parent Dividends paid

Other movements

Opening balance differences Transfer to retained income Arising from acquisition of subsidiary Balance at 31 December 2022

1 751 906	27 081 696	101 292 105	5 817 958	2 406 801 864	(1 793 231)	3 844 673 945	6 385 626 243	1 250 730 186	7 636 356 429
-	-	-	-	-	-	4 949 147 878	4 949 147 878	1 283 650 931	6 232 798 809
-	-	-	-	5 710 640 955	-	- 5 710 640 955	26 771 821	5 737 412 776
-	-	-	-	-	41 515	-	41 515	-	41 515
-	-	-	-	-	-	(116 730 718)	(116 730 718)	(1 668 971)	(118 399 689 )
-	-	-	-	(44 267 275)	-	44 267 275	-	-	-
1 751 906	27 081 696	101 292 105	5 817 958	8 073 175 544	(1 751 716)	8 721 358 380	16 928 725 873	2 559 483 967	19 488 209 840
1 751 906	27 081 696	101 292 105	5 817 958	8 073 175 544	(1 751 716)	8 721 358 380	16 928 725 873	2 559 483 967	19 488 209 840
-	-	-	-	-	-	51 877 535 187	51 877 535 187	11 374 952 408	63 252 487 595
-	-	-	-	29 798 650 523	-	- 29 798 650 523	334 489 747	30 133 140 270
-	-	-	-	-	(1 682 839 576)	- (1 682 839 576)	- (1 682 839 576 )
-	-	-	-	-	-	(227 737 724)	(227 737 724)	(2 676 649)	(230 414 373 )
-	-	-	-	(7 194 829)	-	-	(7 194 829)	-	(7 194 829 )
-	-	-	-	(23 082)	-	23 082	-	-	-
-	-	-	(45 713 183)	-	-	(5 438 882 094)	(5 484 595 277)	40 532 749 858	35 048 154 581
1 751 906	27 081 696	101 292 105	(39 895 225)	37 864 608 156	(1 684 591 292)	54 932 296 831	91 202 544 177	54 798 999 331	146 001 543 508

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2022

		Inflation adjusted	*Unaudited Historical cost


		31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	Notes	ZW$	ZW$	ZW$	ZW$
Interest income	13	25 555 562 736	13 574 602 635	19 071 593 638	3 208 995 587
Interest expense	14	(5 506 054 543)	(2 215 364 997)	(4 030 164 485)	(527 138 481)
Net interest income		20 049 508 193	11 359 237 638	15 041 429 153	2 681 857 106
Loan impairment charges,
net recoveries		(7 034 792 876)	(2 135 692 678)	(5 079 300 946)	(486 046 039)
Net income from lending activities	13 014 715 317	9 223 544 960	9 962 128 207	2 195 811 067
Gross insurance premium income		15 014 327 254	6 813 852 098	11 216 666 424	1 648 030 847
Total insurance expenses		(11 125 136 235)	(3 959 632 009)	(8 582 653 982)	(930 048 584)

Net insurance income		3 889 191 019	2 854 220 089	2 634 012 442	717 982 263
Commissions and fees		15 909 551 865	11 570 059 276	11 834 711 155	2 693 561 584
Operating income		22 236 957 505	4 500 340 019	23 915 286 265	1 395 228 355
Fair value adjustments		15 491 546 165	12 194 933 069	36 807 992 683	5 438 108 413
Total income		70 541 961 871	40 343 097 413	85 154 130 752	12 440 691 682
Operating expenses	16	(40 707 582 286)	(27 925 430 639)	(29 984 596 863)	(5 370 447 701)
Profit from ordinary activities		29 834 379 585	12 417 666 774	55 169 533 889	7 070 243 981
Bargain Purchase	12.3.5	8 320 504 601	-	8 464 659 071	-
Movement in life assurance funds		(4 254 375 889)	(1 622 433 895)	(11 962 832 700)	(1 488 559 527)
Share of associate companies
profit net of tax		5 395 318 512	268 532 999	15 256 168 798	1 922 594 906
Effects of inflation adjustments		(3 454 444 508)	(2 332 374 387)	-	-
Profit before taxation		35 841 382 301	8 731 391 491	66 927 529 058	7 504 279 360
Income tax expense	17	(992 081 726)	(1 658 458 379)	(3 635 854 214)	(1 282 283 022)
Net profit for the year from
continuing operations		34 849 300 575	7 072 933 112	63 291 674 844	6 221 996 338
(Loss)/profit from discontinued
operations		(134 710 034)	1 560 742	(39 187 249)	10 802 471

Net profit for the year		34 714 590 541	7 074 493 854	63 252 487 595	6 232 798 809
Profit attributable to:
Owners of parent from continuing
operations		29 547 176 276	5 252 955 878	51 916 722 436	4 938 345 407
Owners of parent from discontinued
operations		(134 710 034)	1 560 742	(39 187 249)	10 802 471
Non-controlling interests		5 302 124 299	1 819 977 234	11 374 952 408	1 283 650 931
Profit for the year		34 714 590 541	7 074 493 854	63 252 487 595	6 232 798 809
Other comprehensive income:
Items that will not be reclassified
to profit or loss
Gains on property and equipment
revaluation		16 089 452 599	22 931 138 910	33 870 909 776	6 715 244 649
Fair value gains on financial
assets at FVTOCI		(2 235 440 456)	189 580	(2 235 440 457)	55 149
Income tax relating to components
of other comprehensive income		(1 169 636 174)	(4 747 619 451)	(3 185 168 625)	(977 845 507)
Other comprehensive income
for the year net of tax		12 684 375 969	18 183 709 039	28 450 300 694	5 737 454 291
Total comprehensive income
for the year		47 398 966 510	25 258 202 893	91 702 788 289	11 970 253 100
Total comprehensive income
attributable to:
Owners of parent from continuing
operations		42 035 656 098	23 427 386 787	80 032 533 382	10 649 027 877
Owners of parent from discontinued
operations		(134 710 034)	1 560 742	(39 187 249)	10 802 471
Non-controlling interests		5 498 020 446	1 829 255 364	11 709 442 156	1 310 422 752
Total comprehensive income
for the year		47 398 966 510	25 258 202 893	91 702 788 289	11 970 253 100
Earnings per share
Basic and fully diluted earnings
per share (ZW cents)		18 671.87	3 335.72	32 933.33	3 141.86

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2022

	Inflation adjusted	*Unaudited Historical cost


	31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
Cash generated from/(used in) operating activities	40 281 779 209	(1 126 471 755)	66 961 136 107	3 461 533 325
Interest received	25 555 562 736	13 574 602 635	19 071 593 638	3 208 995 587
Dividends received from listed equities	460 222 932	1 112 759 564	321 401 726	259 918 529
Dividend received from associates	63 337 203	36 093 887	53 604 367	8 431 407
Interest expense paid	(5 506 054 543)	(2 215 364 997)	(4 030 164 485)	(527 138 481)
Interest paid expense lease liability	(409 713 988)	(236 909 950)	(309 586 388)	(19 538 243)
Income tax paid	(3 057 369 958)	(2 848 328 952)	(2 754 565 817)	(771 615 154)
Interest expense on offshore borrowings	(427 460 077)	(110 357 749)	(329 280 095)	(25 305 278)
Net cash generated from operating activities	56 960 303 514	8 186 022 683	78 984 139 053	5 595 281 692
Cash flows from investing activities
Purchase of investment property	(36 127 790)	(375 364 167)	(33 074 760)	(87 984 925)
Purchase of intangible assets	(1 087 133 944)	(37 715 405)	(691 561 685)	(10 358 475)
Purchase of property and equipment	(4 645 546 671)	(658 289 325)	(3 923 164 384)	(160 003 669)
Proceeds on disposal of property and equipment	24 223 530	47 921 598	16 533 882	13 940 431
Purchase of investment securities	(6 781 659 180)	(4 574 909 089)	(6 185 156 979)	(1 060 875 001)
Proceeds on disposal of investment securities	2 478 131 201	3 031 718 800	2 109 197 734	720 406 630
Acquisition of subsidiary net of cash acquired	501 097 571	-	656 715 208	-
Net cash used in investing activities	(9 547 015 283)	(2 566 637 588)	(8 050 510 984)	(584 875 009)
Cash flows from financing activities
Dividends paid	(258 934 180)	(485 019 970)	(230 414 373)	(118 399 689)
Lease capital payments	(164 639 964)	(72 005 934)	(74 971 893)	(50 101 593)
Proceeds from offshore borrowings	27 654 623 423	1 706 226 860	20 316 275 173	496 342 643
Repayment on offshore borrowings	(26 015 283 453)	(572 968 375)	(20 290 362 785)	(136 103 097)
Proceeds from short term borrowings	-	1 375 039 509	-	400 000 000
Repayments of short term borrowings	(1 617 367 879)	-	(512 438 356)	-
Net cash (used in) / generated from
financing activities	(401 602 053)	1 951 272 090	(791 912 234)	591 738 264
Net increase in cash and cash equivalents	47 011 686 178	7 570 657 185	70 141 715 835	5 602 144 947
Cash and cash equivalents at beginning of year	33 386 228 099	28 106 480 458	9 712 078 202	5 086 686 008
Effects of exchange rates fluctuating
on cash and cash equivalents	(18 682 562 568)	(2 290 909 544)	(18 138 442 328)	(976 752 753)
Cash and cash equivalents at end of year	61 715 351 709	33 386 228 099	61 715 351 709	9 712 078 202
Cash and cash equivalents comprise:
Cash	19 525 996 958	14 890 278 237	19 525 996 958	4 331 592 843
Local bank accounts	24 980 641 346	7 458 351 112	24 980 641 346	2 169 639 800
Foreign bank accounts	17 208 713 405	11 037 598 750	17 208 713 405	3 210 845 559
	61 715 351 709	33 386 228 099	61 715 351 709	9 712 078 202

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

For the year ended 31 December 2022

1. BASIS OF PREPARATION

1.1 Reporting currency

All Group entities have Zimbabwean dollar (ZW$) as their functional currency as at the reporting date. All information presented has been rounded off to the nearest dollar.

1.2 Statement of compliance

The consolidated and separate annual financial statements as at, and for the year ended 31 December 2022, have been prepared under the supervision of E Mungoni CA(Z), Group Chief Finance Officer of ZB Financial Holdings Limited. The consolidated and separate financial statements are based on accounting records maintained under the historical cost convention as modified by the revaluation of property and equipment, investment properties and certain financial instruments carried at fair value.

The preparation of the consolidated and separate financial statements, in conformity with IAS 29 "Financial Reporting in Hyperinflationary Economies" is required by International Financial Reporting Standards (IFRS). The consolidated and separate inflation adjusted financial statements are to be the principal financial statements of the Company and its subsidiaries. The consolidated and separate historical cost financial statements have been provided as supplementary information and as a result

the auditors have not expressed an opinion on them.0143 ZBFH

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

1.2 Statement of compliance (continued)

The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) promulgated by the International Accounting Standards Board (IASB) which includes standards and interpretations

approved by IASB, the International Financial Reporting Interpretations Committee (IFRIC) and in the manner required by the

Companies and Other Business Entities Act (Chapter 24:31), the Banking Act (Chapter 24:20), the Building Societies Act (Chapter

24:02, the Insurance Act (Chapter 24:07), the Microfinance Act (24:29), Securities and Exchange Act (Chapter 24:25) and relevant

regulations made thereunder.

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

		Inflation adjusted
			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$

The consolidated and separate financial statements were authorised for issue by the board of directors on 19 April 2023.

1.3 Effects of inflation adjustments

The Public Accountants and Auditors Board (PAAB), through circular 01/19 indicating the conditions required for the application

of International Accounting Standard ("IAS") 29, Financial Reporting in Hyper-InflationaryEconomies. All entities reporting in

Zimbabwe were now required to apply the requirements of IAS 29 with effect from 1 July 2019.

The restatement of figures has been calculated by means of conversion factors derived from the consumer price index (CPI)

prepared by the Zimbabwe Central Statistical Office. The conversion factors used to restate the consolidated and separate financial

statements at 31 December 2022 are as follows:

		Conversion
	Index	factors
31 December 2022	13 672.91	1.00
31 December 2021	3 977.46	3.44
31 December 2020	2 474.51	5.53

The main guidelines for the restatement are as follows:

• All amounts not already expressed in terms of the measuring unit current at the statement of financial position date are

restated by applying a general CPI.

• Corresponding figures for previous periods are similarly restated.

• Monetary assets and liabilities are not restated because they are already expressed in terms of the monetary unit current at

the statement of financial position date. Monetary items are money held, assets and liabilities to be recovered or paid at the

nominal value recorded at the original cost.

• Non-monetary assets carried at cost (excluding PPE and investment property) and liabilities and the components of

shareholding's equity are restated by applying the relevant conversion factors reflecting the increase in the CPI from the date

of change in functional currency from US$ to ZW$ in 2018.

• All items in the consolidated and separate statement of profit or loss and other comprehensive income are restated by

applying the respective monthly factors.

• The capitalisation of borrowing costs during construction of a qualifying asset is considered to be a partial recognition of

External revenue

Net earnings from lending activities Net fees and commission income Corporate Banking

Retail Banking Insurance

Other commissions

Other revenue

Fair value adjustments

Total segment revenue

Inter-segmental Revenue

Total segment operating expenses

Material non-cash items included in the above figures:

Expected credit losses Depreciation

Amortisation of intangible assets

Profit from associates net of tax Reportable segment profit before taxation Income tax expense

Reportable segment assets as at 31 December 2021

Reportable segment liabilities as at 31 December 2021

Investment in associates

9 187 764 345	45 246 902	(9 466 287)	9 223 544 960
11 378 963 869	2 863 253 022	182 062 474	14 424 279 365
	1 723 467 427	-	-	1 723 467 427
	9 655 496 442	-	-	9 655 496 442
	-	2 863 253 022	-	2 863 253 022
	-	-	182 062 474	182 062 474
4 734 863 292	842 114 910	(1 076 638 183)	4 500 340 019
8 638 948 050	3 292 820 068	263 164 951	12 194 933 069
33 940 539 556	7 043 434 902	(640 877 045)	40 343 097 413
309 128 886	-	5 049 399 868	5 358 528 754
(26 507 071 734)	(2 643 129 489)	1 224 770 585	(27 925 430 639)

(1 881 629 784)	30 243 898	(284 306 792)	(2 135 692 678)
(7 533 385 577)	(59 723 232)	(81 619 417)	(7 674 728 226)
(137 558 990)	(36 831 392)	(520 178)	(174 910 560)
-	70 317 877	198 215 122	268 532 999
5 533 088 320	2 270 976 865	927 326 306	8 731 391 491
759 909 861	836 848 883	61 699 635	1 658 458 379
141 093 054 667	26 744 069 529	5 736 847 560	173 573 971 756
90 700 744 973	14 954 436 848	(1 269 935 028)	104 385 246 793

-	13 703 765 875	3 979 659 294	17 683 425 169

inflation and is reversed to the consolidated and separate statement of profit or loss and other comprehensive income and

replaced by indexed cost.

• The effect of general inflation on the net monetary position is included in the consolidated and separate statement of profit

or loss and other comprehensive income as effects of inflation adjustments.

• Share capital and share premium were restated from the date of change in functional currency from US$ to ZW$ in 2018.

1.4 Basis of reporting

		Unaudited Historical cost
			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
31 December 2022	ZW$	ZW$	ZW$	ZW$

The same accounting policies and methods of computation were applied to the financial results as at the reporting date of

ZB Bank Limited, ZB Building Society, ZB Life Limited and ZB Reinsurance Limited, incorporated in this reporting package.

1.5 Basis of consolidation

Subsidiaries

A subsidiary is an entity controlled by another entity, that is the parent. The Group controls an entity when it is exposed

to, or has rights to variable returns from its involvement with the investee and has the ability to exert control over the

entity's financial and operational decisions through its power over the investee. The results of subsidiaries are included in the

consolidated financial statements from the date on which control commences until the date on which control ceases.

Subsidiaries are included in the separate financial statements of the Holding company at their net asset value which is

considered to be an estimate of fair value. Assets valuation are done on a yearly basis as such the NAV will be approximately

the fair value at year end.

Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the entity parent.

The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any

excess of the consideration over the fair values of the identifiable net assets acquired is recognised as goodwill. Where the fair

values of the identifiable net assets acquired exceed the consideration, a bargain purchase (negative goodwill) is recognised

in profit or loss in the period of acquisition. Transaction costs are expensed, except if related to the issue of debt or equity

securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts

are generally recognised in profit or loss.

Non-controlling interests (NCI)

Non-controlling interests are measured at their proportionate share of the fair values of the assets and liabilities recognised.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

External revenue

Net earnings from lending activities Net fees and commission income Corporate Banking

Retail Banking Insurance

Other commissions

Fair value adjustments

Other revenue

Total segment revenue

Inter-segmental Revenue

Total segment operating expenses

Material non-cash items included in the above figures:

Expected credit losses Depreciation

Amortisation of intangible assets

Profit from associates net of tax Reportable segment profit before taxation Income tax expense

Reportable segment assets as at 31 December 2022

Reportable segment liabilities as at 31 December 2022

Investment in associates

10 188 830 631	(184 734 411 )	(41 968 013 )	9 962 128 207
11 646 128 970	2 640 306 846	182 287 780	14 468 723 596
	1 763 932 477	-	-	1 763 932 477
	9 882 196 493	-	-	9 882 196 493
	-	2 640 306 846	-	2 640 306 846
	-	-	182 287 780	182 287 780
27 278 164 074	8 966 582 648	563 245 961	36 807 992 683
20 564 958 239	4 168 936 174	(818 608 148 )	23 915 286 265
69 678 081 914	15 591 091 257	(115 042 420 )	85 154 130 751
873 325 269	-	110 034 925 911	110 908 251 180
(26 479 266 549)	(3 588 161 718 )	82 831 404	(29 984 596 863)
(4 910 887 165)	(146 359 328 )	(22 054 453 )	(5 079 300 946)
(1 825 828 188)	(27 636 135 )	(60 396 133 )	(1 913 860 456)
(7 087 898)	(989 281 )	(94 143 )	(8 171 322)
-	14 502 315 285	753 853 513	15 256 168 798
43 198 815 365	14 542 412 125	9 186 301 568	66 927 529 058
2 475 102 748	2 255 545 828	(1 094 794 362 )	3 635 854 214
229 355 669 915	38 091 158 849	50 796 744 243	318 243 573 007

147 265 743 001	21 778 979 395	3 197 307 103	172 242 029 499
-	18 432 124 531	(17 527 032 914 )	905 091 617

Where necessary, adjustments are made to the financial statements of subsidiaries and associates to bring the accounting
policies used into line with those used by the Group.
Transactions eliminated on consolidation
Intra-Group transactions, balances, and unrealised income and expenses are eliminated on consolidation.
1.6 Key sources of judgement and estimation uncertainty
Significant assumptions and estimations, as at the date of financial reporting, with material implications on the reported
financial outturn and balances have been made in the following areas:
•	The computation of expected credit losses (IFRS 9)
•	Determination of the fair value of financial assets (IFRS 13)
•	Valuation of property (including investment properties) and equipment (IAS 16 and IAS 40)
•	Estimation of liabilities under insurance contracts including life funds valuation (IFRS 4)
•	Ascertaining of the degree of control or significant influence in investee companies (IAS 27 and IAS 28)
•	Determination of carrying amounts of right of use assets and lease liabilities (IFRS 16)

The nature of assumptions made and processes involved in the development of estimates, and relevant models used, where applicable, are discussed in the accounting policy notes in the Group's annual report as at 31 December 2022.

The same above significant assumptions and estimates were applied to the extent where relevant, to the financial results as at the reporting date of ZB Bank Limited, ZB Building Society, ZB Life Limited and ZB Reinsurance Limited, incorporated in this reporting package.

2. SEGMENT INFORMATION

		Inflation adjusted

			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
31 December 2022	ZW$	ZW$	ZW$	ZW$

External revenue
Net earnings from lending activities	13 404 492 436	(236 325 431 )	(153 451 688 )	13 014 715 317
Net fees and commission income	15 655 183 972	3 899 214 747	244 344 165	19 798 742 884
Corporate Banking	2 371 147 316	-	-	2 371 147 316
Retail Banking	13 284 036 656	-	-	13 284 036 656
Insurance	-	3 899 214 747	-	3 899 214 747
Other commissions	-	-	244 344 165	244 344 165
Other revenue	22 462 941 191	4 200 657 798	(4 426 641 484 )	22 236 957 505
Fair value adjustments	13 095 728 424	3 002 874 128	(607 056 387 )	15 491 546 165
Total segment revenue	64 618 346 023	10 866 421 242	(4 942 805 394 )	70 541 961 871
Inter-segmental Revenue	1 574 161 504	-	65 547 522 559	67 121 684 063
Total segment operating expenses	(39 307 083 122)	(5 145 561 979 )	3 745 062 815	(40 707 582 286)
Material non-cash items included in
the above figures:
Expected credit losses	(6 795 733 709)	(217 004 715 )	(22 054 452 )	(7 034 792 876)
Fair value adjustments	13 095 728 424	3 002 874 128	(607 056 387 )	15 491 546 165
Depreciation	(2 698 699 633)	(75 724 107 )	(191 025 795 )	(2 965 449 535)
Amortisation of intangible assets	(210 141 851)	(3 400 754 )	(212 410 )	(213 755 015)
Profit from associates net of tax	-	4 809 434 065	585 884 447	5 395 318 512
Reportable segment profit before taxation	22 778 050 815	5 504 651 911	7 558 679 575	35 841 382 301
Income tax expense	950 822 994	1 234 031 079	(1 192 772 347 )	992 081 726
Reportable segment assets
as at 31 December 2022	230 681 824 377	38 205 175 316	52 076 739 970	320 963 739 663
Reportable segment liabilities
as at 31 December 2022	147 400 945 505	21 780 973 766	3 412 023 449	172 593 942 720
Investment in associates	-	18 449 862 736	(17 142 527 771 )	1 307 334 965

		Unaudited Historical cost

			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$

External revenue
Net earnings from lending activities	2 188 865 002	10 851 943	(3 905 878)	2 195 811 067
Net fees and commission income	2 649 706 023	720 347 435	41 490 389	3 411 543 847
Corporate Banking	290 266 330	-	-	290 266 330
Retail Banking	2 359 439 693	-	-	2 359 439 693
Insurance	-	720 347 435	-	720 347 435
Other commissions	-	-	41 490 389	41 490 389
Fair value adjustments	3 745 593 043	1 540 905 654	151 609 716	5 438 108 413
Other revenue	1 259 120 986	210 517 140	(74 409 771)	1 395 228 355
Total segment revenue	9 843 285 054	2 482 622 172	114 784 456	12 440 691 682
Inter-segmental Revenue	54 646 481	-	7 178 557 225	7 233 203 706
Total segment operating expenses	(4 806 790 757)	(645 962 332)	82 305 388	(5 370 447 701)
Material non-cash items included in

the above figures:
Expected credit losses	(483 265 771)	8 797 972	(11 578 240)	(486 046 039)
Depreciation	(380 517 367)	(10 578 538)	(14 717 374)	(405 813 279)
Amortisation of intangible assets	(975 633)	(575 159)	(94 142)	(1 644 934)
Profit from associates net of tax	-	1 549 264 091	373 330 815	1 922 594 906
Reportable segment profit before taxation	5 036 494 297	1 897 364 406	570 420 657	7 504 279 360
Income tax expense	906 120 107	365 396 208	10 766 707	1 282 283 022
Reportable segment assets as
at 31 December 2021	40 852 684 721	7 744 141 520	1 253 007 709	49 849 833 950
Reportable segment liabilities as
at 31 December 2021	26 366 935 666	4 360 017 025	(365 328 581)	30 361 624 110
Investment in associates	-	3 983 413 613	832 863 240	4 816 276 853

1 Includes consolidation journals.

3. TREASURY BILLS

3.1 Reported in the statements of financial position

The Reserve Bank of Zimbabwe (RBZ) has issued various forms of treasury bills which the Group has participated in. The Group has three categories of treasury bills classified as follows:

as ''at "Fair value through profit or loss (FVTPL)'';
as "at "Fair value through other comprehensive income (FVTOCI)"; and
as "at amortised cost (AMCO)".

Treasury bills include:

	Inflation adjusted	Unaudited Historical cost

	31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
Assets classified as at fair value through
profit or loss' (FVTPL):
Short term treasury bills 1	6 724 208 776	7 154 704 011	6 724 208 776	2 081 308 636
Assets classified as 'at fair value through
other comprehensive income (FVTOCI):
Medium term treasury bills acquired
from the market 2	9 998 488 908	979 865 722	9 998 488 908	285 043 656
Assets classified as 'amortised cost' (AMCO):
Treasury bills issued as substitution
for debt instruments 3	20 727 050	87 095 659	20 727 050	25 336 191
Capitalisation treasury bills 4	19 574 560	64 085 225	19 574 560	18 642 439
	16 762 999 294	8 285 750 617	16 762 999 294	2 410 330 922
Maturity within 1 year	6 557 233 000	8 113 898 881	6 557 233 000	2 360 339 126
Maturity after 1 year	10 205 766 294	171 851 736	10 205 766 294	49 991 796	0143
	16 762 999 294	8 285 750 617	16 762 999 294	2 410 330 922
	ZBFH

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

3. TREASURY BILLS (continued)

The Group invested in treasury bills issued by the RBZ over a period ranging from 3 months to 9 months (2021: 3 months to 24
months) and were at rates ranging from 8% to 92% (2021: 5% to 21%).
The Group purchased treasury bills from the secondary market. These treasury bills have coupon rates ranging from 0% to 5% (2021: 5% to 15%) with maturity periods ranging from 2 to 10 years (2021: 1 month to 3 years).
The Group received treasury bills as substitution for debt instruments from the Zimbabwe Asset Management Company (ZAMCO). The treasury bills have a coupon rate of 5% (December 2021: 5%) and maturity periods ranging from 4 to 10 years (2021: 3.5 months to 10 years).
Capitalisation Treasury Bills (CTBs) with a face value of $20 000 000 were acquired on 26/05/2015 from the Government of Zimbabwe by the holding company, ZB Financial Holdings Limited (ZBFH). The CTBs were then used to recapitalise ZB Bank Limited, a 100% owned subsidiary of ZBFH. The CTBs mature on 26 May 2025 and carry a coupon of 1% which is payable on maturity. The CTBs are carried at amortised cost, with cost having been established at fair value at initial recognition using a Discounted Cash Flow valuation technique in which an assessed discount rate of 5% was applied as a proxy for market rate in the absence of free market trade on similar instruments.

Determination of fair value of treasury bills
The fair value of treasury bills was determined using level 2 inputs due to lack of active market for treasury bills which are classified as "FVTPL". The Group used the discounted cash flow valuation technique by applying an average yield market rate on the contractual cash flows in order to determine the fair value of the treasury bills.
Treasury bills purchased from the secondary market value were fair valued using TBs average yield market rate of 68%.
USD denominated Treasury bills fair value was computed using a proxy discount rate of 2% by reference to US Federal Reserve TBs with same tenor and adjusted for country risk.
Impairment assessment of treasury bills
Treasury bills were assessed for ECL in the current year in line with IFRS 9. Treasury bills, being local sovereign exposures have been assessed as "low risk" instruments and there were no defaults recorded in past on all Government Instruments. In addition, the Government of Zimbabwe has a strong capacity to meet its contractual cashflow obligations in the near term and an adverse in the economics and business conditions in the longer term may, but will not necessarily reduce the Government of Zimbabwe's ability to fulfil its obligations. The amount of ECL was insignificant as such no adjustment for impairment was recognized.

4. MORTGAGES AND OTHER ADVANCES

Inflation adjusted	Unaudited Historical cost

31Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
ZW$	ZW$	ZW$	ZW$

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

	Inflation adjusted	Unaudited Historical cost


	31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
6. RIGHT OF USE ASSETS
Balance at the beginning of year	760 927 541	365 976 243	102 568 596	66 234 057
Depreciation	(118 693 024)	(253 012 034)	(79 470 830)	(57 037 263)
Lease modifications	635 233 597	414 188 693	349 779 923	93 371 802
Effects of inflation adjustment	320 526 075	233 774 639	-	-
Balance at end of year	1 597 994 189	760 927 541	372 877 689	102 568 596

7. PROPERTY AND EQUIPMENT

			Inflation adjusted
			Equipment		Marine assets
	Freehold	Leasehold	furniture	Computer	and motor Capital work
	properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2022	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$

GROUP
Cost or valuation
Balance at 1 January 2022	14 016 734 674	6 554 036 902	11 837 733 569	14 607 916 458	3 288 722 331	216 901 552	50 522 045 486
Additions	-	134 045 175	880 485 720	690 356 208	873 723 438	2 066 936 130	4 645 546 671
Disposals	-	-	(81 637 727)	(44 130 826)	(20 303 028)	-	(146 071 581)
Transfer between categories	-	1 610 406 684	169 666 466	-	- (1 780 073 150)	-
Surplus on revaluation	8 874 407 170	568 184	389 169 237	6 356 129 275	469 178 735	-	16 089 452 601
Arising from acquisition of subsidiary	3 964 300 000	-	56 954 205	-	143 695 953	-	4 164 950 158

Balance at 31 December 2022	26 855 441 844	8 299 056 945	13 252 371 470	21 610 271 115	4 755 017 429	503 764 532	75 275 923 335
Accumulated depreciation and
impairment

Gross loan book
Mortgage advances
Other advances:
Loans, overdraft and other accounts Finance leases
Bills discounted Insurance advances Total other advances
Gross advances
Off balance sheet exposures In respect of Guarantees
In respect of Loan commitments Gross credit exposure
Gross advances
Less: Allowance for loan impairments Net advances
Maturity analysis
On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months
Non-performingloans
Included in the above are the following; Non-performing loans
Less: Allowance for loan impairments Value to be received from security held

2 188 959 388	1 118 331 324	2 188 959 388	325 323 401
62 053 477 361	36 572 731 961	62 053 477 361	10 639 034 509
2 715 035 334	4 646 584 656	2 715 035 334	1 351 694 879
138 277 282	1 394 263 249	138 277 282	405 592 200
2 118 559 956	760 756 222	2 118 559 956	221 304 542
67 025 349 933	43 374 336 088	67 025 349 933	12 617 626 130

69 214 309 321	44 492 667 412	69 214 309 321	12 942 949 531
3 133 776 126	2 849 843 046	3 133 776 126	829 021 429
6 864 150 030	2 504 910 185	6 864 150 030	728 680 207

79 212 235 477	49 847 420 643	79 212 235 477	14 500 651 167
69 214 309 321	44 492 667 412	69 214 309 321	12 942 949 531
(4 344 604 579)	(2 440 805 534)	(4 344 604 579)	(710 032 117)
64 869 704 742	42 051 861 878	64 869 704 742	12 232 917 414
3 314 940 341	3 402 502 112	3 314 940 341	989 790 356
1 628 466 895	2 040 929 754	1 628 466 895	593 707 960
14 242 664 848	4 718 896 323	14 242 664 848	1 372 730 396
22 350 972 921	8 813 055 900	22 350 972 921	2 563 724 415
37 675 190 472	30 872 036 554	37 675 190 472	8 980 698 040
79 212 235 477	49 847 420 643	79 212 235 477	14 500 651 167
230 172 094	1 716 654 221	230 172 094	499 375 970
(75 028 348)	(1 606 755 560)	(75 028 348)	(467 406 369)
155 143 746	109 898 661	155 143 746	31 969 601

Balance at 1 January 2022	2 221 752 224	6 156 031 703	3 500 765 615	4 197 060 470	2 026 056 652	185 967 772	18 287 634 436
Recognised in statement of profit
or loss	806 941 509	65 565 561	409 411 700	1 461 840 683	221 690 082	-	2 965 449 535
Disposals	-	-	(2 311 805)	(1 973 136)	(6 201 373)	-	(10 486 314)
Impairment	-	327 169 459	4 209 628 864	12 799 377	30 603 884	114 075 979	4 694 277 563
Balance at 31 December 2022	3 028 693 733	6 548 766 723	8 117 494 374	5 669 727 394	2 272 149 245	300 043 751	25 936 875 220
Carrying value at 31 December 2022	23 826 748 111	1 750 290 222	5 134 877 096	15 940 543 721	2 482 868 184	203 720 781	49 339 048 115

Carrying value at 31 December 2021	11 794 982 450	398 005 199	8 336 967 954	10 410 855 988	1 262 665 679	30 933 780	32 234 411 050


				Inflation adjusted
			Equipment		Marine assets
	Freehold	Leasehold	furniture	Computer	and motor Capital work
	properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$

GROUP
Cost or valuation
Balance at 1 January 2021	10 618 156 093	2 470 792 031	3 330 282 211	7 150 745 461	2 913 823 789	496 893 618	26 980 693 203
Additions	-	37 322 845	162 360 148	241 371 592	137 503 951	79 730 789	658 289 325
Disposals	-	-	(10 620 716)	(7 161 787)	(38 640 771)	-	(56 423 274)
Transfer between categories	-	233 383 816	81 135 303	371 085 061	-	(685 604 180)	-
Reclassication to investment properties	(317 534 003)	-	-	-	-	-	(317 534 003)
Surplus on revaluation	3 716 112 584	3 812 538 210	8 274 576 623	6 851 876 131	276 035 362	-	22 931 138 910
Reclassification to intangibles	-	-	-	-	-	325 881 325	325 881 325

Balance at 31 December 2021	14 016 734 674	6 554 036 902	11 837 733 569	14 607 916 458	3 288 722 331	216 901 552	50 522 045 486
Accumulated depreciation and
impairment
Balance at 1 January 2021	1 899 423 448	2 072 555 505	1 448 534 882	3 206 499 048	1 860 049 054	185 967 772	10 673 029 709
Recognised in statement of profit
or loss	382 275 043	4 079 483 815	2 051 087 343	991 938 871	169 943 154	-	7 674 728 226
Disposals	-	-	(876 213)	(1 377 449)	(5 621 681)	-	(7 875 343)

For the secured non-performing loans, security exists in the form of liens registered over funded accounts, bonds registered over landed property and guarantees in various forms. The Group discounts the value of the security at hand using internal thresholds for prudential purposes. Generally, no security value is placed on ordinary guarantees. The internally discounted value of the security held in respect of the non-performing book amounted to ZW$5 432 212 657 as at 31 December 2022 (2021: ZW$29 259 743).

		Inflation adjusted			Unaudited Historical cost

	31 Dec 2022	As a % of	31 Dec 2021	As a % of	31 Dec 2022	As a % of	31 Dec 2021	As a % of
	ZW$	Total	ZW$	Total	ZW$	Total	ZW$	Total
4.4 Sectorial analysis
Gross advances:
Private	19 951 358 928	25%	21 761 884 455	44%	19 951 358 928	25%	6 330 548 124	44%
Agriculture	3 106 261 211	4%	4 068 731 909	8%	3 106 261 211	4%	1 183 597 092	8%
Mining	11 447 874 838	14%	1 645 856 177	3%	11 447 874 838	14%	478 780 767	3%
Manufacturing	2 277 476 131	3%	778 313 486	2%	2 277 476 131	3%	226 411 963	2%
Distribution	6 300 355 711	8%	2 458 713 712	5%	6 300 355 711	8%	715 241 619	5%
Construction	255 906 600	0%	84 381 689	0%	255 906 600	0%	24 546 695	0%
Transport	3 717 944 871	5%	1 557 193 484	3%	3 717 944 871	5%	452 988 725	3%
Services	16 154 281 558	20%	9 734 789 883	20%	16 154 281 558	20%	2 831 857 506	20%
Financial	5 994 842 920	8%	2 230 130 378	4%	5 994 842 920	8%	648 746 560	4%
Communication	8 006 551	0%	172 672 239	0%	8 006 551	0%	50 230 480	0%
Total gross advances	69 214 309 321	87%	44 492 667 412	89%	69 214 309 321	87%	12 942 949 531	89%
Guarantees:
Manufacturing	3 045 948 099	3.8%	2 703 272 638	6%	3 045 948 099	4%	786 383 990	6%
Distribution	41 020 464	0.05%	114 101 074	0%	41 020 464	0%	33 192 086	0%
Construction	-	0%	3 231 343	0%	-	0%	940 000	0%
Services	46 807 563	0.06%	29 237 991	0%	46 807 563	0%	8 505 353	0%
Total guarantees	3 133 776 126	4%	2 849 843 046	6%	3 133 776 126	4%	829 021 429	6%
Loan commitments:
Agriculture	1 184 716 731	1%	1 014 993 182	2%	1 184 716 731	1%	295 262 260	2%
Mining	43 766 562	0%	4 966 849	0%	43 766 562	0%	1 444 860	0%
Manufacturing	1 234 835 807	2%	298 916 260	1%	1 234 835 807	2%	86 954 959	1%
Distribution	578 852 049	1%	391 688 643	1%	578 852 049	1%	113 942 513	1%
Construction	6 396 893	0%	18 352 037	0%	6 396 893	0%	5 338 621	0%
Transport	1 200 847 525	2%	189 627 818	0%	1 200 847 525	2%	55 162 871	0%
Communication	40 649 141	0%	-	0%	40 649 141	0%	-	0%
Services	2 568 063 257	3%	469 519 241	1%	2 568 063 257	3%	136 583 490	1%
Financial Services	6 022 065	0%	116 846 155	0%	6 022 065	0%	33 990 633	0%
Total loan commitments	6 864 150 030	9%	2 504 910 185	5%	6 864 150 030	9%	728 680 207	5%

4.6 Finance lease receivables

Loans and advances to customers include the following finance lease receivables for leases of certain equipment where the Group is the lessor:

Inflation adjusted	Unaudited Historical cost
31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
ZW$	ZW$	ZW$	ZW$

Impairment	-	3 992 383	2 019 603	-	1 686 125	-	7 698 111
Reclassication to investment properties	(59 946 267)	-	-	-	-	-	(59 946 267)

Balance at 31 December 2021		2 221 752 224	6 156 031 703	3 500 765 615	4 197 060 470	2 026 056 652	185 967 772	18 287 634 436
Carrying value at 31 December 2021	11 794 982 450	398 005 199	8 336 967 954	10 410 855 988	1 262 665 679	30 933 780	32 234 411 050

Carrying value at 31 December 2020	8 718 732 645	398 236 526	1 881 747 329	3 944 246 414	1 053 774 735	310 925 844	16 307 663 493


					Unaudited Historical cost

					Equipment		Marine assets
			Freehold	Leasehold	furniture	Computer	and motor Capital work
			properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2022	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
GROUP
Cost or valuation
Balance at 1 January 2022	3 556 664 010	106 852 612	2 459 475 337	3 300 451 063	434 803 245	64 656 690	9 922 902 957
Additions	-	132 444 024	740 378 668	476 705 577	673 251 755	1 900 384 360	3 923 164 384
Disposals	-	-	(45 103 381)	(17 777 453)	(11 656 215)	-	(74 537 049)
Transfer between categories	-	1 547 392 301	167 021 842	-	- (1 714 414 143)	-
Surplus on revaluation	16 974 163 057	-	2 045 117 085	13 415 009 849	1 436 619 785	-	33 870 909 776
Arising from acquisition of subsidiary		3 964 300 000	-	23 433 504	-	4 916 951	-	3 992 650 455
Balance at 31 December 2022		24 495 127 067	1 786 688 937	5 390 323 055	17 174 389 036	2 537 935 521	250 626 907	51 635 090 523
Accumulated depreciation and
impairment
Balance at 1 January 2022	125 495 011	31 041 822	49 443 750	275 178 119	68 226 170	-	549 384 872
Recognised in statement of profit
or loss	542 884 058	45 763 660	236 006 845	960 965 756	128 240 137	-	1 913 860 456
Disposals	-	(19 906)	(2 312 303)	(9 756 077)	(3 231 946)	-	(15 320 232)
Impairment		-	-	20 417 035	-	-	-	20 417 035
Balance at 31 December 2022		668 379 069	76 785 576	303 555 327	1 226 387 798	193 234 361	-	2 468 342 131
Carrying value at 31 December 2022		23 826 747 998	1 709 903 361	5 086 767 728	15 948 001 238	2 344 701 160	250 626 907	49 166 748 392
Carrying value at 31 December 2021	3 431 168 999	75 810 790	2 410 031 587	3 025 272 944	366 577 075	64 656 690	9 373 518 085

					Unaudited Historical cost
					Equipment		Marine assets
			Freehold	Leasehold	furniture	Computer	and motor Capital work
			properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$

Gross investment in finance leases:

Maturing within 1 year

Maturing after 1 year

Gross investment in finance leases

Unearned finance charges

Net investment in finance leases

Maturing within 1 year

Maturing after 1 year

5. INVESTMENT PROPERTIES

Made up as follows:

Land stock held for capital appreciation

and completed properties available for lease: Residential

Commercial Industrial

Balance at end of year

Reconciliation of carrying amount

Balance at beginning of year Additions

Transfer to / (from) owner occupied Arising from acquisition of subsidiary Fair value adjustment

Balance at end of year

1 433 065 020	5 244 166 974	1 433 065 020	1 525 532 013
9 660 162 816	7 052 084 584	9 660 162 816	2 051 456 570
11 093 227 836	12 296 251 558	11 093 227 836	3 576 988 583
(8 378 192 502)	(7 649 666 905)	(8 378 192 502)	(2 225 293 704)
2 715 035 334	4 646 584 653	2 715 035 334	1 351 694 879
427 547 783	2 134 672 305	427 547 783	620 977 737
2 287 487 551	2 511 912 348	2 287 487 551	730 717 142
2 715 035 334	4 646 584 653	2 715 035 334	1 351 694 879

7 591 318 166	1 232 598 171	7 591 318 166	358 563 710
84 241 370 016	13 678 225 068	84 241 370 016	3 979 005 689
2 358 079 661	382 880 101	2 358 079 661	111 380 102
94 190 767 843	15 293 703 340	94 190 767 843	4 448 949 501
15 293 703 340	12 034 525 807	4 448 949 501	2 177 997 851
36 127 790	375 364 167	33 074 760	87 984 925
(3 964 300 000)	257 587 729	(3 964 300 000)	46 618 000
66 865 248 000	- 66 865 248 000	-
15 959 988 713	2 626 225 637	26 807 795 582	2 136 348 725
94 190 767 843	15 293 703 340	94 190 767 843	4 448 949 501

GROUP
Cost or valuation
Balance at 1 January 2021	1 616 342 287	49 233 601	339 555 297	759 481 003	217 720 202	115 424 734	3 097 757 124
Additions	-	8 672 256	38 526 759	55 759 333	40 000 000	17 045 321	160 003 669
Disposals	-	-	(3 089 574)	(2 069 061)	(11 240 628)	-	(16 399 263)
Transfer between categories	-	48 946 755	16 959 710	15 416 960	-	(81 323 425)	-
Reclassication to investment properties	(47 213 282)	-	-	-	-	-	(47 213 282)
Surplus on revaluation	1 987 535 005	-	2 067 523 145	2 471 862 828	188 323 671	- 6 715 244 649
Reclassification from intangibles	-	-	-	-	-	13 510 060	13 510 060
Balance at 31 December 2021	3 556 664 010	106 852 612	2 459 475 337	3 300 451 063	434 803 245	64 656 690	9 922 902 957
Accumulated depreciation and
impairment
Balance at 1 January 2021	38 433 774	17 065 579	15 029 460	48 872 747	27 009 029	-	146 410 589
Recognised in statement of profit
or loss	87 656 518	13 936 635	34 669 181	226 698 456	42 852 489	-	405 813 279
Disposals	-	-	(254 891)	(393 084)	(1 635 348)	-	(2 283 323)
Impairment	-	39 608	-	-	-	-	39 608
Reclassication to investment properties	(595 281)	-	-	-	-	-	(595 281)
Balance at 31 December 2021	125 495 011	31 041 822	49 443 750	275 178 119	68 226 170	-	549 384 872
Carrying value at 31 December 2021	3 431 168 999	75 810 790	2 410 031 587	3 025 272 944	366 577 075	64 656 690	9 373 518 085
Carrying value at 31 December 2020	1 577 908 513	32 168 022	324 525 837	710 608 256	190 711 173	115 424 734	2 951 346 535

ZBFH 0143

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

8. INTANGIBLE ASSETS

Inflation adjusted	Unaudited Historical cost
31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
ZW$	ZW$	ZW$	ZW$

NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)

12.3 ACQUISITION OF A SUBSIDIARY

12.3.5 Bargain purchase

Bargain purchase arising from the acquisition has been recognised as follows:-

Computer software

Carrying amount at beginning of year Additions at cost

Reversal of cancelled projects Amortisation Reclassification to equipment Impairment

Balance at end of year

9. DEPOSITS AND OTHER ACCOUNTS

Summary of deposits by type
Balances of banks Current accounts Savings and call accounts Fixed deposits
Maturity analysis
On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months

695 956 323	1 194 610 537	22 206 622	28 389 024
1 087 133 944	37 715 405	691 561 685	10 358 475
-	(35 577 734)	-	(1 385 883)
(213 755 015)	(174 910 560)	(8 171 322)	(1 644 934)
-	(325 881 325)	-	(13 510 060)
(102 802 673)	-	(2 192 314)	-
1 466 532 579	695 956 323	703 404 671	22 206 622
3 922 054 654	1 683 427 552	3 922 054 654	489 710 308
15 857 450 583	18 086 823 989	15 857 450 583	5 261 470 343
80 441 208 461	38 928 723 005	80 441 208 461	11 324 394 029
8 989 549 137	8 917 524 295	8 989 549 137	2 594 114 348
109 210 262 835	67 616 498 841	109 210 262 835	19 669 689 027
97 956 090 356	47 366 915 683	97 956 090 356	13 779 070 458
3 054 318 231	18 597 089 559	3 054 318 231	5 409 906 971
8 032 735 138	551 302 294	8 032 735 138	160 374 241
150 149 071	1 020 622 367	150 149 071	296 899 794
16 970 040	80 568 938	16 970 040	23 437 563
109 210 262 835	67 616 498 841	109 210 262 835	19 669 689 027

		Inflation adjusted	Unaudited Historical cost

		31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
		ZW$	ZW$	ZW$	ZW$
Consideration transferred	3 602 565 002	-	3 446 947 365	-
NCI based on their proportionate interest in
the recognized amounts of the assets and
liabilities of Mash	40 525 999 485	-	40 487 036 675	-
Fair value of pre-existing interest in Mash	13 790 206 487	-	13 776 948 203	-
Fair value of identifiable net assets		(66 239 275 575)	-	(66 175 591 314)	-
Bargain purchase		(8 320 504 601)	-	(8 464 659 071)	-

Bargain purchase arose as a result of the Group acquiring shares in Mash at market price that was below the fair value of the identifiable net assets value of Mash.

12.3.6 Non-controlling interests.

The Group has elected to measure the non-controlling interest (NCI) based on their proportionate interest of Mash's net identifiable assets as recognised by the Group, which amounted to ZW$40 525 999 485 (unaudited historical cost: ZW$40 487 036 675).

12.3.7 Acquired receivables

Included in trade and other receivables are trade receivables stated at fair value of ZW$681 647 987. The gross contractual amount for the trade receivables was ZW$681 647 987 and expected to be collectible.

		Inflation adjusted				Unaudited Historical cost

	31 Dec 2022	%	31 Dec 2021	%		31 Dec 2022	%	31 Dec 2021	%
	ZW$	Contribution	ZW$ Contribution		ZW$ Contribution	ZW$ Contribution
9.3 Deposit concentration
Private individuals	18 658 986 903	17%	10 849 147 705	16%		18 658 986 903	17%	3 156 025 012	16%
Agriculture	5 880 137 408	5%	3 559 026 936	5%		5 880 137 408	5%	1 035 323 542	5%
Mining	2 450 824 504	2%	681 453 716	1%		2 450 824 504	2%	198 235 385	1%
Manufacturing	5 911 603 684	5%	2 938 053 247	4%		5 911 603 684	5%	854 681 841	4%
Distribution	3 926 237 835	4%	1 927 501 432	3%		3 926 237 835	4%	560 711 578	3%
Construction	1 284 960 325	1%	852 321 302	1%		1 284 960 325	1%	247 940 891	1%
Transport	585 086 764	1%	1 035 140 265	2%		585 086 764	1%	301 123 061	2%
Services	48 439 090 709	44%	28 934 042 373	43%		48 439 090 709	44%	8 416 934 114	43%
Financial	13 349 374 649	12%	8 393 501 673	12%		13 349 374 649	12%	2 441 675 783	12%
Communication	8 723 960 054	8%	8 446 310 192	12%		8 723 960 054	8%	2 457 037 820	12%
	109 210 262 835	100%	67 616 498 841	100%		109 210 262 835	100%	19 669 689 027	100%

	Inflation adjusted	Unaudited Historical cost

	31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
9.4 Secured and unsecured deposits analysis
Secured deposits	-	-	-	-
Unsecured deposits	109 210 262 835	67 616 498 841	109 210 262 835	19 669 689 027
10. LEASE LIABILITIES
Balance at the beginning of year	411 437 741	384 450 727	119 687 540	69 577 553
Add finance cost posted to profit or loss	409 713 988	236 909 950	309 586 388	19 538 243
Exchange gains	(2 138 786 358)	(151 859 862)	690 680 746	31 108 045
Less lease liability payments during the year	(574 353 952)	(308 915 884)	(384 558 281)	(69 639 836)
Lease modifications	(4 245 979 728)	284 000 251	86 737 877	69 103 535
Effects of inflation adjustment	6 960 102 579	(33 147 441)	-	-
Balance at end of year	822 134 270	411 437 741	822 134 270	119 687 540
Maturing within 1 year	164 426 854	82 287 548	164 426 854	23 937 508
Maturing after 1 year	1 067 421 404	329 150 193	1 067 421 404	95 750 032
Total	1 231 848 258	411 437 741	1 231 848 258	119 687 540
11. LONG TERM BORROWINGS
Comprising of:
Face value of loan	20 000 000	68 751 975	20 000 000	20 000 000
Valuation discount	(2 204 945)	(10 492 682)	(2 204 945)	(3 052 329)
Balance at end of year	17 795 055	58 259 293	17 795 055	16 947 671
Valuation discount:
Balance at beginning of the year	10 492 682	21 324 896	3 052 329	3 859 361
Amortisation during the year	(1 265 604)	(3 579 919)	(847 384)	(807 032)
Effects of inflation adjustment	(7 022 133)	(7 252 295)	-	-
Balance at end of year	2 204 945	10 492 682	2 204 945	3 052 329

12. ACQUISITION OF A SUBSIDIARY

On 31 December 2022, the Group acquired 18.01% of the shares and voting interests in Mashonaland Holdings Limited (Mash) through the acquisition of shares from other shareholders. As a result, the Group's equity interest in Mash increased from 32.58% to 50.59%, granting it control of Mash and subsequently, became a subsidiary of the Group.

The principal activities of Mash are property research & development and management.

12.3.1 Consideration transferred

Total consideration transferred was cash amounting to ZW$3 602 565 002 (unaudited historical cost: ZW$ 3 446 947 365).

12.3.2 Acquisition-related costs

Acquisition-related costs were not material and charged to profit or loss.

12.3.3 Revenue and Profit contribution

The revenue and profit contribution from the new acquisition were immaterial.

Had the acquired business been consolidated from 1 January 2022, the Group's consolidated revenue and consolidated profit for the year ended 31 December 2022 would have been ZW$22 420 980 875 (unaudited historical cost: ZW$57 586 912 255) and ZW$17 245 756 852 (unaudited historical cost: ZW$20 073 925 697) respectively.

12.3.4 Identifiable assets acquired and liabilities assumed

The following table summarises the recognized amounts of acquired assets and liabilities assumed at the date of acquisition.

	Inflation adjusted	Unaudited Historical cost
	31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$

Total identifiable assets acquired
Cash and cash equivalent	4 103 662 573	-	4 103 662 573	-
Financial assets held at fair value
through profit or loss	527 553 502	-	527 553 502	-
Trade and other receivables	1 552 821 095	-	1 428 258 932	-
Investment properties	66 865 248 000	-	66 865 248 000	-
Property and equipment	200 650 158	-	28 350 455	-
Total assets	73 249 935 328	-	72 953 073 462	-

		Inflation adjusted	Unaudited Historical cost


		31 Dec 2022	31 Dec 2021	31 Dec 2022	31 Dec 2021
		ZW$	ZW$	ZW$	ZW$

13. INTEREST AND RELATED INCOME
Interest income comprises interest on:
Advances	20 755 097 945	10 517 323 666	15 062 846 497	2 559 285 218
Mortgages	564 018 510	594 527 462	392 141 847	73 661 917
Overdraft accounts	2 398 076 860	1 147 698 840	1 882 432 643	266 097 023
Financial assets at amortised cost	70 555 869	242 542 769	57 834 549	57 834 549
Treasury bill at FVTPL	233 552 422	802 859 519	193 316 382	193 316 382
Treasury bills at FVTOCI	43 058 475	148 017 761	33 368 088	33 368 088
Cash and short-term funds	272 186 636	37 028 308	212 470 826	7 058 565
Loans to other banks	218 663 825	-	155 262 740	60 274
Other		1 000 352 194	84 604 310	1 081 920 066	18 313 571
Total interest income		25 555 562 736	13 574 602 635	19 071 593 638	3 208 995 587
14. INTEREST AND RELATED EXPENSE
Interest expenses comprise interest on:
Retail deposits	132 435 404	162 310 117	74 310 602	37 804 747
Fixed deposits	3 310 470 821	1 414 874 451	2 345 098 711	340 754 046
Finance cost on operating lease liabilities	409 713 988	236 909 950	309 586 388	19 538 243
Other interest payable categories		1 653 434 330	401 270 479	1 301 168 784	129 041 445
Total interest expenses		5 506 054 543	2 215 364 997	4 030 164 485	527 138 481
Net interest income		20 049 508 193	11 359 237 638	15 041 429 153	2 681 857 106
15. LOAN IMPAIRMENTS
Loans and advances	(6 630 862 791)	(156 108 091)	(4 872 123 095)	(446 763 806)
Insurance debtors	(258 550 590)	30 243 898	(146 359 328)	8 797 972
Loans and other advances	(6 889 413 381)	(125 864 193)	(5 018 482 423)	(437 965 834)
Other financial assets	(24 177 119)	(1 881 629 784)	6 523 746	(11 578 240)
Guarantees	(349 434 489)	(131 205 840)	(276 864 188)	(37 445 505)
Loan commitments	(48 049 379)	(5 351 661)	(24 546 942)	(957 780)
Net recoveries against loans
previously written off	276 281 492	8 358 800	234 068 861	1 901 320
		(7 034 792 876)	(2 135 692 678)	(5 079 300 946)	(486 046 039)
16. OPERATING EXPENSES
Commission and fees	623 056 588	428 053 065	434 980 446	111 626 169
Staff expenses	20 971 396 356	9 707 622 339	16 017 723 437	2 352 515 911
Communication expenses	673 675 160	691 238 648	508 782 146	164 115 525
National Social Security Authority expenses	222 877 728	70 337 258	167 823 949	16 843 785
Pension fund expenses	549 450 372	291 276 799	395 456 825	68 713 153
Computers and information
technology expenses	3 951 373 759	2 774 421 565	2 513 113 652	499 736 091
Occupation expenses	1 352 617 997	815 758 032	866 960 037	176 885 656
Transport expenses	488 639 405	188 167 003	352 583 329	41 540 688
Travelling expenses	557 151 751	248 820 195	426 878 502	60 272 419
Depreciation of property and equipment	2 965 449 535	7 674 728 226	1 913 860 456	405 813 279
Amortisation of intangible assets	213 755 015	174 910 560	8 171 322	1 644 934
Depreciation of right of use asset	118 693 024	253 012 034	79 470 830	57 037 263
Impairment of property and equipment	4 694 277 563	7 698 111	12 487 605	39 608
Impairment of intangible assets	102 802 673	-	2 192 314	-
Administration expenses	2 070 049 732	4 018 490 566	5 480 399 017	1 281 530 852
Amortisation of valuation discount
on the long term borrowings	(1 265 604)	(3 579 919)	(847 384)	(807 032)
Directors fees	430 888 902	313 464 756	330 943 316	73 617 572
Auditors' remuneration	722 692 330	271 011 401	473 617 064	59 321 828
		40 707 582 286	27 925 430 639	29 984 596 863	5 370 447 701
17. INCOME TAX EXPENSE
Current income tax	3 162 688 581	2 754 379 873	3 153 231 923	800 027 822
Deferred tax expense/(credit)	(2 170 606 855)	(1 090 884 858)	482 622 291	483 108 710
Discountinued operations	-	(5 036 636)	-	(853 510)
		992 081 726	1 658 458 379	3 635 854 214	1 282 283 022

18. EARNINGS PER SHARE

Total liabilities assumed

Trade and other receivables

Current tax liabilities

Deferred tax liabilities

Long term borrowings

Total liabilities

Total identifiable net assets at acquisition

Less: Non-controlling interests

Less: Fair value of pre-existing interest in Mash

Less: Bargain purchase arising at acquisition

Consideration transferred

Less: Cash and cash equivalents in subsidiary acquired

Cash inflow on acquisition

1 582 840 233	-	1 458 070 983	-
84 078 769	-	84 078 769	-
3 274 411 747	-	3 166 003 392	-
2 069 329 004	-	2 069 329 004	-
7 010 659 753	-	6 777 482 148	-
66 239 275 575	- 66 175 591 314	-
(40 525 999 485)	- (40 487 036 675)	-
(13 790 206 487)	- (13 776 948 203)	-
(8 320 504 601)	-	(8 464 659 071)	-

3 602 565 002	-	3 446 947 365	-
(4 103 662 573)	-	(4 103 662 573)	-
(501 097 571)	-	(656 715 208)	-

Basic earnings per share (ZW cents)

The inflation adjusted calculation of basic earnings per share for the year ended 31 December 2022 of ZW18 672 cents

(2021: ZW3 336 cents) is based on the attributable profit after tax of ZW$29 412 466 242 (2021: ZW$5 254 516 620)

and weighted average number of shares of 157 522 902 (2021:157 522 902).

The unaudited historical cost calculation of basic earnings per share for the year ended 31 December 2022 of ZW32

933 cents (2021:ZW3 142 cents) is based on the attributable profit after tax of ZW$51 877 535 187 (2021:ZW$4 949

147 878) and weighted average number of shares of 157 522 902 (2021:157 522 902).

There were no dilutive instruments for the year.

ZBFH 0143

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ZB Financial Holdings Ltd. published this content on 21 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2023 06:49:01 UTC.

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