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IBLP - Imperial Bank - Audited Condensed Financial Results for the year ended 31
December 2009
IMPERIAL BANK
Reg. No.: 1995/012641/06, Incorporated in the Republic of South Africa
Preference share code: IBLP
ISIN: ZAE000081675
Audited Condensed Financial Results for the year ended 31 December 2009
As announced during 2009, Nedbank Limited had agreed, subject to regulatory
approval, to acquire Imperial Holdings Limited`s shareholding of 49.9% of the
ordinary shares of Imperial Bank Limited (Imperial Bank or the Bank). The
regulatory approval in terms of the Banks Act has subsequently been received
and the Bank will become a wholly-owned subsidiary of Nedbank Limited.
The Bank has four operating divisions. Motor Finance is the largest division
with 64.4% of advances, followed by Property Finance with 17.8% of advances,
Professional Finance with 11.3% and Supplier Asset Finance with 6.5%.
These results are published as a voluntary announcement by Imperial Bank.
REVIEW OF THE YEAR
The Bank experienced extremely difficult trading conditions in the first half
of the year. However, in the second half of the year there was a more
favourable environment with the lower interest rate assisting hard-pressed
consumers resulting in an improvement in retail arrear accounts and a reduction
in the high level of impairments incurred in the first half of the year. In
addition non-interest income grew sharply from R87.6 million in 2008 to
R199.1 million in the current year which is mainly related to the book growth
in the Motor Finance Division. The more favourable trading environment enabled
the Bank to produce a profit for the year of R430.8 million which is 19.3% up
on the R361.2 million of the previous year. Return on equity was 13.2% and the
efficiency ratio at 28.0% was in line with the 28.8% achieved in the previous
year. Loans and advances grew 12.8% from R44.7 billion to R50.5 billion as the
Bank continued to attract good quality new business.
Motor Finance had a significantly better year with net profit after tax
increasing 92.5% from R164.5 million to R316.6 million while loans and advances
grew 16.1% from R28.0 billion to R32.5 billion. As mentioned in last year`s
report, Motor Finance was able to generate good quality business at appropriate
pricing while maintaining strong risk controls and a lean operating
environment. This trend continued during 2009. These factors, combined with
the improved impairments during the second half, enabled the division to
produce these far more pleasing results.
As anticipated, Property Finance has had a difficult year. Although there has
been demand for commercial property finance there has been virtually no demand
for residential development finance. As a result, loans and advances grew 11.3%
from R8.0 billion to R8.9 billion. Although commercial property finance
produces good quality annuity income, it does not produce the same level of net
income as contributed by residential development finance. This change in
business mix results in lower net interest income which dropped 25.9% from
R328.1 million last year to R243.2 million for the current year. This, combined
with an increase of 218.0% in impairments from R13.3 million last year to
R42.3 million for the current year, resulted in net profit after tax declining
36.7% from R164.0 million for 2008 to R103.8 million for 2009.
Professional Finance had a much improved year with net profit after tax
increasing 42.7% from R17.8 million last year to R25.4 million for the current
year. This was largely attributable to improved margins, good cost management
and a slight reduction in impairments which reduced 3.4% from R26.7 million in
2008 to R25.8 million for the year under review. Loans and advances increased
16.3% from R4.9 billion last year to R5.7 billion for the current year.
Supplier Asset Finance had a disappointing year, with the division being badly
affected by the poor economic environment. The division incurred a loss of
R12.7 million for the year compared to a profit after tax of R37.3 million last
year. This was mainly due to impairments which increased 201.7% from
R29.2 million last year to R88.1 million for the current year. In line with the
strategy to selectively consider new business, loans and advances declined from
R3.7 billion at 31 December 2008 to R3.3 billion at 31 December 2009.
CAPITAL
During the year, Nedbank Limited subscribed for an additional R350 million of
subordinated, unsecured Tier II debt. Capital adequacy increased from 11.1% to
11.2%. The capital adequacy ratio includes unappropriated profit at year-end.
ACCOUNTING POLICIES
Imperial Bank Limited is a company domiciled in South Africa. The condensed
consolidated financial results of the Group at and for the year ended
31 December 2009 comprised the Company and its subsidiaries (together referred
to as the Group). The Imperial Bank Group`s principal accounting policies have
been applied consistently for the current and prior financial year. The Group`s
consolidated financial results have been prepared in accordance with the
recognition and measurement criteria of International Financial Reporting
Standards (IFRS), interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC) and the presentation and disclosure
requirements of International Accounting Standard (IAS) 34 - Interim Financial
Reporting.
In the preparation of these financial results, the Group has applied key
assumptions concerning the future and other indeterminate sources in recording
various assets and liabilities. These assumptions were applied consistently to
both the Company and Group financial statements for the year ended
31 December 2009. These assumptions are subject to ongoing review and possible
amendments.
SUBSEQUENT EVENTS
Subsequent to year-end, regulatory approval in terms of the Banks Act of 1990
was obtained to enable Nedbank Limited to acquire the 49.9% of ordinary shares
held by Imperial Holdings in Imperial Bank Limited. All conditions precedent to
the acquisition have therefore been fulfilled and the acquisition will now be
implemented by the parties.
BOARD OF DIRECTORS
At the request of Nedbank Limited, Hubert Brody has agreed to remain a director
of the Bank and the Board is pleased to confirm that he has also agreed to
continue as the chairman of the Bank. With effect from 10 February 2010, Osman
Arbee has resigned as a director of the Bank. The Board wishes to express its
appreciation of the contribution Osman has made to the Bank over a number of
years.
There have been no other changes to the Board.
PROSPECTS
The improved trading conditions in the Motor Finance division experienced
during the second half of the year are expected to continue into 2010. However,
the economic recovery is fragile which could have a negative impact on
operating divisions exposed to the corporate and commercial markets. Overall we
expect a further improvement in profitability.
IMPERIAL BANK NON-REDEEMABLE, NON-PARTICIPATING, NON-CUMULATIVE PREFERENCE
SHARES - DECLARATION OF DIVIDEND NO. 7
Notice is hereby given that preference dividend No. 7 of 374.73973 cents per
share has been declared for the period from 1 July 2009 to 31 December 2009,
payable on Monday, 29 March 2010, to shareholders of the non-redeemable,
non-participating, non-cumulative preference shares recorded in the books of
the company at the close of business on Friday, 26 March 2010.
In accordance with the provisions of STRATE, the electronic settlement and
custody system used by the JSE Limited, the relevant dates for the payment of
the dividend are as follows:
Last day to trade cum dividend Thursday, 18 March 2010
Shares trade ex dividend Friday, 19 March 2010
Record date Friday, 26 March 2010
Payment date Monday, 29 March 2010
Share certificates may not be dematerialised or rematerialised between Friday,
19 March 2010 and Friday, 26 March 2010, both days inclusive.
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders` bank accounts on payment date. In
the absence of specific mandates, dividend cheques will be posted to
shareholders.
Shareholders who have dematerialised their share certificates will have their
accounts, at their CSDP or broker, credited on Monday, 29 March 2010.
H R Brody R van Wyk
Chairman Chief Executive Officer
19 February 2010
KEY RATIOS
As at December December
2009 2008
Net interest income to average interest-
earning banking assets % 4.3 4.2
Impairment losses as a percentage of average
gross loans and advances % 2.0 1.7
Non-interest revenue as a percentage of
operating income % 15.6 7.8
Efficiency ratio % 28.0 28.8
Return on ordinary shareholders` equity % 13.2 13.2
Return on total average assets % 0.8 0.8
Capital adequacy
- Tier 1 % 8.1 8.5
- Total % 11.2 11.1
SHARE STATISTICS
As at December December
2009 2008
Number of shares in issue
- Ordinary shares m 393.7 393.7
- Preference shares m 3.0 3.0
Preference share traded price (closing) R 99.0 72.4
Net asset value per ordinary share R 8.8 7.8
AUDITED RESULTS - AUDITOR`S OPINION
Deloitte & Touche, the Group`s independent auditor, has audited the
consolidated annual financial statements of the Imperial Bank Limited Group from
which the condensed consolidated financial results have been derived, and have
expressed an unmodified audit opinion on the consolidated annual financial
statements. The condensed consolidated financial results comprise the
consolidated Group Statement of Financial Position at 31 December 2009,
consolidated Group Statement of Comprehensive Income, condensed consolidated
Statement of Changes in Equity and condensed consolidated Group Statement of
Cash Flows for the year then ended. The audit report is available for
inspection at Imperial Bank`s registered office.
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2009
Audited
2009 2008
R`000 R`000
Interest and similar income 6 217 843 6 431 739
Interest expense and similar charges 4 184 778 4 699 196
Net interest income 2 033 065 1 732 543
Impairment losses on loans and advances 956 636 700 538
Income from lending activities 1 076 429 1 032 005
Non-interest revenue 199 114 87 609
Operating income 1 275 543 1 119 614
Operating expenses 625 911 524 846
Indirect taxation 50 449 51 310
Profit before direct taxation 599 183 543 458
Total direct taxation 168 408 182 245
Profit for the year 430 775 361 213
Other comprehensive income net of taxation - 11 823
- Gains on property revaluation - 15 727
- Taxation on other comprehensive income - (3 904)
Total comprehensive income for the period 430 775 373 036
Profit attributable to:
- Equity holders of the parent 400 699 331 318
- Non-controlling interest - Preference shareholders 30 076 29 895
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
at 31 December 2009
Audited
2009 2008
R`000 R`000
ASSETS
Cash and cash equivalents 300 800 46 693
Other short-term securities 2 346 963 1 563 385
Derivative financial instruments 50 921 37 619
Government and other securities 202 608 529 163
Loans and advances to customers 50 450 770 44 734 236
Other assets 741 663 504 787
Investment securities 3 970 5 183
Property and equipment 268 241 279 484
Intangible assets 78 136 -
Mandatory deposits with central bank 1 215 575 1 067 545
Total assets 55 659 647 48 768 095
EQUITY AND LIABILITIES
Ordinary share capital 3 937 3 937
Ordinary share premium 1 097 747 1 097 747
Reserves 2 361 329 1 960 630
Total ordinary shareholders` equity 3 463 013 3 062 314
Preference share capital and premium 298 047 298 047
Total shareholders` equity 3 761 060 3 360 361
Total liabilities 51 898 587 45 407 734
Bank overdraft 6 920 -
Derivative financial instruments 244 957 357 171
Amounts owed to depositors 50 087 002 43 934 979
Other liabilities 161 503 110 712
Provisions 52 049 45 403
Current taxation 23 511 5 706
Deferred taxation 175 992 162 013
Long-term debt instruments 1 146 653 791 750
Total equity and liabilities 55 659 647 48 768 095
Contingent liabilities 363 806 1 079 640*
* Contingent liabilities have been restated to exclude unutilised facilities of
R1.4 billion.
OPERATING DIVISIONS` % OF NET PROFIT FOR THE YEAR ENDED 31 DECEMBER 2009
Please see press for the graph.
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2009
Audited
2009 2008
R`000 R`000
Cash generated by operating activities 1 802 478 1 364 900
Change in funds for operating activities (1 445 357) (826 524)
Net cash generated by operating activities before
taxation paid 357 121 538 376
Taxation paid (187 073) (174 985)
Net cash generated by operating activities 170 048 363 391
Net cash utilised in investing activities (94 755) (106 553)
Net cash from financing activities 319 924 77 092
Net increase in cash and cash equivalents 395 217 333 930
Cash and cash equivalents at the beginning of the
year 1 114 238 780 308
Cash and cash equivalents at the end of the year 1 509 455 1 114 238
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2009
Audited Number of Number of
ordinary preference
shares shares
Balance at 31 December 2007 340 009 624 3 000 000
Transfer (from)/to reserves
Total comprehensive income for the period
Ordinary dividends paid
Preference dividends paid
Ordinary shares issued 53 673 165
Balance at 31 December 2008 393 682 789 3 000 000
Total comprehensive income for the period
Preference dividends paid
Balance at 31 December 2009 393 682 789 3 000 000
Ordinary Ordinary
Audited share share
capital premium
R`000 R`000
Balance at 31 December 2007 3 400 648 284
Transfer (from)/to reserves
Total comprehensive income for the period
Ordinary dividends paid
Preference dividends paid
Ordinary shares issued 537 449 463
Balance at 31 December 2008 3 937 1 097 747
Total comprehensive income for the period
Preference dividends paid
Balance at 31 December 2009 3 937 1 097 747
General
Audited Revaluation credit risk
reserve reserve
R`000 R`000
Balance at 31 December 2007 35 361 229 371
Transfer (from)/to reserves (229 371)
Total comprehensive income for the period 11 823
Ordinary dividends paid
Preference dividends paid
Ordinary shares issued
Balance at 31 December 2008 47 184 -
Total comprehensive income for the period
Preference dividends paid
Balance at 31 December 2009 47 184 -
Total
ordinary
Audited Accumulated shareholders`
profit equity
R`000 R`000
Balance at 31 December 2007 1 480 770 2 397 186
Transfer (from)/to reserves 229 371 -
Total comprehensive income for the period 361 213 373 036
Ordinary dividends paid (128 013) (128 013)
Preference dividends paid (29 895) (29 895)
Ordinary shares issued - 450 000
Balance at 31 December 2008 1 913 446 3 062 314
Total comprehensive income for the period 430 775 430 775
Preference dividends paid (30 076) (30 076)
Balance at 31 December 2009 2 314 145 3 463 013
Preference
share capital Total
Audited and shareholders`
premium equity
R`000 R`000
Balance at 31 December 2007 298 047 2 695 233
Transfer (from)/to reserves -
Total comprehensive income for the period 373 036
Ordinary dividends paid (128 013)
Preference dividends paid (29 895)
Ordinary shares issued 450 000
Balance at 31 December 2008 298 047 3 360 361
Total comprehensive income for the period 430 775
Preference dividends paid (30 076)
Balance at 31 December 2009 298 047 3 761 060
SEGMENTAL ANALYSIS BY OPERATION**
for the year ended 31 December 2009
Audited
Total assets (Rbn)
At At
31 December 31 December
2009 2008
Motor Finance 33.1 28.5
Property Finance 9.2 8.0
Professional Finance 5.7 4.9
Supplier Asset Finance 3.3 3.7
Treasury and Eliminations 4.4 3.7
Total 55.7 48.8
Audited
Operating income (Rm)**
Twelve Twelve
months months
December December
2009 2008
Motor Finance 868.6 591.3
Property Finance 229.8 303.6
Professional Finance 99.9 85.0
Supplier Asset Finance 76.7 128.0
Treasury and Eliminations 0.6 11.7
Total 1 275.6 1 119.6
Audited
Net profit for the year (Rm)
Twelve Twelve
months months
December December
2009 2008
Motor Finance 316.6 164.5
Property Finance 103.8 164.0
Professional Finance 25.4 17.8
Supplier Asset Finance (12.7) 37.3
Treasury and Eliminations (2.3) (22.4)
Total 430.8 361.2
** The Group operational and segmental report reflects the current method of
measuring the performance of the respective business divisions. Each division
is allocated capital to be utilised in the generation of revenue based on their
risk-weighted assets. The divisions are charged cost of capital on the capital
allocated based on the Bank`s actual capital structure. The cost of equity
charge is reflected after taxation and the residual profit is referred to as
economic profit. The cost of equity charge comprises the Bank`s targeted Tier 1
components, namely, ordinary equity, preference shares and hybrid instruments.
The 2008 figures have been restated accordingly.
CORPORATE INFORMATION
Registered office: Imperial Bank Limited, 24 Achter Road, Paulshof, 2191.
PO Box 6093, Rivonia, 2128.
Transfer secretaries: Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107.
Directors: H R Brody: Chairman, R van Wyk: Chief Executive Officer*,
O S Arbee, C J W Ball, L E Bakoro, M J Croucamp, P C W Hibbit*, N P Mnxasana,
P A Wessels, P K Ward.
* Executive
Company secretary: G Tyusha
Sponsor: Nedbank Capital
Reg. No.: 1995/012641/06, Incorporated in the Republic of South Africa
Preference share code: IBLP ISIN: ZAE000081675
THESE RESULTS ARE AVAILABLE ON OUR WEBSITE WWW.IMPERIALBANK.CO.ZA
Date: 23/02/2010 07:05:24 Produced by the JSE SENS Department.
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