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Mercantile Lisbon Bank Holdings Limited - Unaudited Results For The Six
Release Date: 18/12/2002 17:16:02 Code(s): MTL
Mercantile Lisbon Bank Holdings Limited - Unaudited Results For The Six
Months Ended 30 September 2002
MERCANTILE LISBON BANK HOLDINGS LIMITED
ISIN: ZAE000027082
Share code: MTL
Reg No: 1989/000164/06
A subsidiary Company of Caixa Geral de Depositos
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002
Summarised Group Income Statement
6 months 6 months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2002 2001 2002
R` 000 R` 000 R`000
Notes Unaudited Unaudited Audited
Interest
income 126,197 201,091 353,815
Interest
expense (81,540) (141,103) (235,397)
Net interest
income before
Provision
for credit 44,657 59,988 118,418
losses
Reversal
of/(provision
for) credit
losses (1) 249,849 (266,000) (506,778)
Net interest
income/(expense) 294,506 (206,012) (388,360)
Non-
interest 32,995 94,277 179,039
income
Net profit on
sale and
revaluation
of investments 299 (13,709) 67,929
Total operating
income/(loss) 327,800 (125,444) (141,392)
Operating
expenses (125,603) (241,589) (489,643)
202,197 (367,033) (631,035)
Share of
profit/(loss)
from
associated
companies 273 (2,880) (3,530)
Income/(loss)
before taxation 202,470 (369,913) (634,565)
Taxation (5,784) (5,152) (12,198)
Attributable
income/(loss) 196,686 (375,065) (646,763)
Continuing
operations 196,686 (225,040) (479,784)
Discontinued
operations - (150,025) (166,979)
Headline
earnings/(loss) 196,686 (220,971) (529,520)
Determination of
headline
earnings/(loss)
Attributable
earnings/(loss) 196,686 (375,065) (646,763)
Adjustment
for:
Capital loss on
systems software - 4,069 -
Discontinued
operations - 150,025 117,243
Headline
earnings/(loss) 196,686 (220,971) (529,520)
Summarised Group
Balance Sheet
30 Sept 30 Sept 31 March
2002 2001 2002
R` 000 R` 000 R` 000
Unaudited Unaudited Audited
Assets
Cash and cash
equivalents 299,351 124,861 212,047
Negotiable
securities 212,517 282,627 242,997
Loans and
advances 1,479,125 2,398,350 1,475,609
Interest in associated
companies 3,689 15,117 3,246
Investments 10,881 59,555 19,560
Other
assets 170,224 214,630 233,531
Property,
equipment and
intangible
assets 115,090 165,703 121,832
Total
assets 2,290,877 3,260,843 2,308,822
Liabilities
Deposit & credit
balances 1,974,150 2,939,858 2,085,712
Other
liabilities 104,124 145,990 207,193
Deferred
taxation - 2,886 -
Long term
liabilities - 10,517 -
Total
liabilities 2,078,274 3,099,251 2,292,905
Shareholders`
funds
Share
capital 866,865 747,786 866,865
Reserves (654,262) (586,194) (850,948)
Total shareholders`
funds 212,603 161,592 15,917
Total
liabilities and
shareholders`
funds 2,290,877 3,260,843 2,308,822
Guarantees and letters
of credit 128,680 191,282 186,829
Conditional buy-back -
obligation 298,497 375,231
Summarised Group Cash
Flow Statement
6 months 6 months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2002 2001 2002
R` 000 R` 000 R` 000
Unaudited Unaudited Audited
Cash flow from
operating (37,633) (23,418) (116,654)
activities
Cash flow from
operating funds 122,242 (78,191) (560,460)
Taxation
paid (5,784) (6,974) (9,242)
Cash flow from
investing 8,479 35,422 581,302
activities
Cash flow from - -
financing 119,079
activities
Aggregate of
cash inflows and
Outflows 87,304 (73,161) 14,025
Cash and cash
equivalents at
beginning of
period 212,047 198,022 198,022
Cash and cash
equivalents at
end
of period 299,351 124,861 212,047
Summarised Group Statement of Change
in Shareholders` Interest
6 months 6 months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2002 2001 2002
R` 000 R` 000 R` 000
Unaudited Unaudited Audited
Opening 15,917 536,657 536,657
balance
Movements in
distributable 196,686 (375,065) (520,740)
reserves
Shareholders` 212,603 161,592 15,917
interest
Summarised Group
Segmental Information
6 months 6 months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2002 2001 2002
R` 000 R` 000 R` 000
Notes Unaudited Unaudited Audited
Segment
Revenue:
Banking 80,959 (18,615) (24,180)
services
Treasury 9,973 16,365 33,413
Alliance 8,361 (3,871) (18,571)
Banking
Other
services (2) (3) 228,507 (35,809) (104,086)
Discontinuing - (83,514) (27,968)
operations
327,800 (125,444) (141,392)
Segment Results:
Banking services 30,799 (51,400) (130,058)
Treasury (3,406) 680 29
Alliance Banking 3,773 (18,499) (41,526)
Other services (2) (3) 165,520 (155,821) (308,229)
Discontinuing
operations - (150,025) (166,979)
196,686 (375,065) (646,763)
Financial
Statistics
30 Sept 30 Sept 31 March
2002 2001 2002
Number of ordinary
shares in issue:
- end of period
(` 000) 855,585 427,014 855,585
- weighted
average (` 000) 855,585 427,014 427,014
Headline
earnings/(loss)
per
ordinary share
(cents) 23.0 (51.7) (124.0)
Net asset value
per ordinary
share
(cents) 24.8 37.8 1.9
Capital ratio
relative to 10%
(2001 - 8%)
required in terms of
Bank`s Act (%) 10.9 5.7 0.7
(1) Mercantile has reversed, in the reporting period, provisions for
credit losses in the amount of R265 million as referred to in paragraph 3
of the text of this Announcement.
(2) "Other services" includes support divisions,
collections, specialised asset finance, insurance brokers and
inter-group eliminations.
(3) Included in "Other services" is the reversal, in the
reporting period, of provisions for credit losses in the
amount of R265 million.
1.
INTRODUCTION
The first half of this year has seen:
- a restructuring of the Board of Directors;
- the establishment of the guarantee from Caixa Geral de Dep"sitos S.A.
["CGD"];
- the commencement of the restructuring of certain operational areas.
2. THE
RESTRUCTURED
BOARD
The Board of Mercantile Lisbon Bank Holdings Limited
["Mercantile"/"Group"] has been substantially restructured
and is now constituted as follows:
Dr J A S de (Chairman)
A Campos*
R J (Group
Symmonds Managing
Director)
G P de
Kock
Dr J H Real
Pereira*
Dr R M L de (Executive)
F N Ribas*
Dr A M S A
Soares*
(*Portug
uese)
3. ESTABLISHMENT OF THE
CGD GUARANTEE
As was announced in July 2002, CGD have established a guarantee in the
amount of R265 million. The nature of the guarantee was that CGD assumed
financial responsibility for the repayment of certain non-performing
loans, thereby allowing Mercantile to release provisions and re-establish
capital adequacy. The full impact of this guarantee has been incorporated
into the results for this reporting period.
4. RESULTS FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2002
These interim results are set out elsewhere in this report. They have
been prepared in accordance with South African Statements of Generally
Accepted Accounting Practice. The accounting policies are consistent
with those used in the Annual Financial Statements for the year ended 31
March 2002.
While the reported attributable net income for the half year amounted to
R197 million, this is predominantly due to the reversal of specific
provisions in the amount of R265 million, as a result of the guarantee
provided by CGD referred to above. Excluding the effect of that
guarantee, Mercantile`s result in the reporting period was a loss in the
amount of R68 million.
Additional provisions in the amount of R15 million where raised in the
period under review. The level of general and specific provisioning is
considered conservative, with general provisions representing
approximately four times the South African Reserve Bank minimum
requirement.
The ongoing losses described above are largely the result of an
unacceptably high cost base. It has been difficult to reduce costs
without increasing risk, but after careful investigation and extensive
consultation, various restructuring initiatives are now under way. The
positive impact of these is only likely to be felt in the first half of
the year to December 2003.
5. RESTRUCTURING OF CERTAIN
OPERATIONAL AREAS
The restructuring initiatives being implemented at Mercantile are
intended to improve the way in which risk is managed, whilst at the same
time improving efficiencies and reducing costs. Two major initiatives
currently being implemented are:
- centralising the back
office processing
areas;
- refocusing the front line of the retail banking business
around the branches and in so doing simplifying the
structure and reporting lines.
6. CHANGE
OF YEAR END
Mercantile has changed its financial year-end from 31 March to 31
December to correspond with CGD`s reporting period. There will therefore
be a nine-month reporting period to 31 December 2002.
7. CHANGE OF EXTERNAL
AUDITORS
Deloitte & Touche have been appointed auditors of Mercantile
replacing PricewaterhouseCoopers Inc., as Deloitte & Touche
are CGD`s auditors.
8.
OUTLOOK
The last two years have been turbulent ones for the South African banking
industry and particularly so for Mercantile. The establishment of CGD as
the controlling shareholder has brought stability and confidence to the
Group, but there remains much to be done. Management is confident that
the correct steps are being taken to rehabilitate the Bank.
BY ORDER OF THE BOARD
J A S DE A CAMPOS, CHAIRMAN
R J SYMMONDS, GROUP MANAGING DIRECTOR
SANDTON, 12 DECEMBER 2002
Mercantile Lisbon Bank Holdings Limited
(Registration number 1989/000164/06)
Registered Office:
Mercantile Lisbon House, 142 West Street, Sandown, 2196
Directors: Dr J A S de A Campos (Chairman), R J Symmonds (Group Managing
Director) G P de Kock, Dr J H Real Pereira*, Dr R M L de F N Ribas*,
(Executive), Dr A M S A Soares*
Group Secretary: F
Vicente Coelho*
* Portuguese
Transfer Secretaries:
Computershare Investment Services Ltd, 8th Floor, 11 Diagonal Street,
Johannesburg, 2001
Corporate Advisor and Sponsor to Mercantile:
Bridge Capital
Reporting Accountants and Auditors:
Deloitte & Touche
www.mercantile.co.za
Date: 18/12/2002 05:16:00 PM Produced by the JSE SENS Department
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