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JSE IBLP
IBLP
IBLP - Imperial Bank - Reviewed Results for the year ended 31 December 2006
IMPERIAL BANK
Incorporated in the Republic of South Africa
Reg no: 1995/012641/06
Preference share code: IBLP
ISIN: ZAE000081675
www.imperialbank.co.za
REVIEWED RESULTS for the year ended 31 December 2006
OVERVIEW
Imperial Bank Limited (Imperial Bank) is a 50.1% subsidiary of Nedbank
Limited with the remaining 49.9% being held by Imperial Holdings Limited.
These financial results are published to provide information to the holders
of Imperial Bank`s listed non-redeemable, non-participating, non-cumulative
preference shares.
The bank has had another excellent year, benefiting from a favourable
economic environment. Loans and advances increased 40.8% from R19.7bn to
R27.7bn and net profit after tax increased 31.1% from R294.5m to R386.1m.
Net interest income grew by 34.1% and operating expenses grew by 14.7%,
resulting in the cost-to-income ratio improving from 41.2% to 35.4% and the
return on ordinary shareholders` equity improving from 23.2% to 24.7%. This
performance reflects the benefits of the restructuring and refocusing of the
business undertaken in the second half of 2005.
All divisions performed well, with Motor Finance, Property Finance and
Medical Finance achieving strong growth in loans and advances. In line with
the strategy, Supplier Asset Finance grew loans and advances within prudent
risk parameters while it focused on returning all business units to
profitability.
The impairment charge has increased 84% compared to the previous year`s
abnormally low base. The charge now reflects a more normalised pattern
following the benign conditions of 2005.
CAPITAL MANAGEMENT
During the period Imperial Bank restructured its capital base to improve
returns to shareholders and to allow for future growth. In March 2006 the
bank issued a subordinated (Tier 2) bond (IBL2) for R500 million and in June
2006 issued preference share capital amounting to R300 million yielding 70%
of prime. Imperial Bank also bought back R300 million of ordinary shares
during the period.
PROSPECTS
Even though the increases in interest rates in 2006 are likely to dampen
demand, we remain positive about the growth prospects for 2007, particularly
as the bank is well positioned to take advantage of the increased
infrastructural spending as well as the increasing number of new owners in
the vehicle finance market. This, combined with the bank`s focus on
providing clients with outstanding service, enables us to view 2007 with
confidence and we anticipate another year of positive growth.
CHANGES TO BOARD OF DIRECTORS
During the reporting period the following changes were made to the Imperial
Bank board:
- L E Bakoro was appointed as a non-executive director (28 August 2006);
- Z E E Banchetti resigned as a non-executive director (19 April 2006);
- R G Cottrell, having reached retirement age, resigned as a non-executive
director (30 November 2006);
- M A Enus-Brey was appointed as a non-executive director (19 April 2006);
- R A Shuter resigned as a non-executive director (19 April 2006); and
- D M van der Linde resigned as an executive director (19 April 2006) but
remains a member of the bank`s Executive Committee and Head of Motor
Finance.
ACCOUNTING POLICIES
The accounting policies applied for the year have been consistent with those
of the prior year. Imperial Bank`s condensed financial results have been
prepared in accordance with International Accounting Standard 34: Interim
Financial Reporting.
IMPERIAL BANK NON-REDEEMABLE, NON-PARTICIPATING, NON-CUMULATIVE PREFERENCE
SHARES - DECLARATION OF DIVIDEND NO 1
Notice is hereby given that preference dividend No 1 of 430.93151 cents per
share has been declared for the period from 22 June 2006 to 31 December
2006, payable on Monday, 26 March 2007, 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, 23 March 2007.
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, 15 March 2007
Shares trade ex dividend Friday, 16 March 2007
Record date Friday, 23 March 2007
Payment date Monday, 26 March 2007
Share certificates may not be dematerialised or rematerialised between
Friday, 16 March 2007, and Friday, 23 March 2007, 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, 26
March 2007.
For and on behalf of the board
W G Lynch R van Wyk
Chairman Chief Executive 16 February 2007
INCOME STATEMENT
For the year ended Reviewed Audited
December December
2006 2005
R`000 R`000
Interest and similar income 2 909 071 2 438 341
Interest expense and similar charges 1 830 442 1 634 177
Net interest income 1 078 629 804 164
Impairment losses on loans and advances 210 807 114 589
Income from lending activities 867 822 689 575
Non-interest revenue 64 127 50 668
Total income 931 949 740 243
Operating expenses 404 540 352 637
Indirect taxation 21 150 14 099
Profit from operations before direct taxation 506 259 373 507
Direct taxation 120 199 79 024
Net profit for the year 386 060 294 483
BALANCE SHEET
As at Reviewed Audited
December December
2006 2005
R`000 R`000
Assets
Cash and cash equivalents 12 774 11 189
Other short-term securities 1 154 105 569 465
Derivative financial instruments 78 334 217 177
Government and other securities 360 114 450 356
Loans and advances to customers 27 736 031 19 697 107
Other assets 272 304 239 166
Investment securities 5 309 8 693
Non-current assets held for sale - 13 395
Deferred taxation - 9 643
Property and equipment 125 160 134 512
Mandatory deposits with central bank 656 030 463 296
Total assets 30 400 161 21 813 999
Equity and liabilities
Share capital 2 882 3 589
Share premium 348 802 648 285
Reserves 1 256 990 870 930
Total ordinary equity 1 608 674 1 522 804
Preference share capital and premium 298 062 -
Total shareholders` equity 1 906 736 1 522 804
Total liabilities 28 493 425 20 291 195
Derivative financial instruments 102 585 219 120
Amounts owed to depositors 27 036 305 19 229 181
Other liabilities 237 974 209 293
Current taxation 54 582 53 119
Deferred taxation 3 797 -
Long-term debt instruments 1 058 182 580 482
Total equity and liabilities 30 400 161 21 813 999
Guarantees on behalf of customers excluded
from assets 943 913 868 765
CONDENSED CASH FLOW STATEMENT
For the year ended Reviewed Audited
December December
2006 2005
R`000 R`000
Cash generated by operating activities 714 209 457 132
Change in funds for operating activities (387 983) (446 426)
Net cash generated by operating activities
before taxation 326 226 10 706
Taxation paid (132 059) (19 731)
Net cash generated by/(utilised in) operating
activities 194 167 (9 025)
Net cash flows generated by/(utilised in)
investing activities 2 280 (97 848)
Net cash flows (utilised in)/from financing
activities (2 128) 214 648
Net increase in cash and cash equivalents 194 319 107 775
Cash and cash equivalents at beginning of year 474 485 366 710
Cash and cash equivalents including
mandatory deposits with the central bank 668 804 474 485
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
For the year ended
Number of Ordinary Ordinary
ordinary share share
shares capital premium
R`000 R`000
Balance as at
31 December 2003 301 998 332 3 020 434 205
Transfer to/(from)
reserves
Net profit for the
year
Balance as at
31 December 2004 301 998 332 3 020 434 205
Transfer to/(from)
reserves
Net profit for the
year
Share issues 56 936 155 569 214 431
Share issue expenses (351)
Balance as at
31 December 2005 358 934 487 3 589 648 285
Transfer to/(from)
reserves
Net profit for the
year
Ordinary shares
repurchased (70 711 888) (707) (299 293)
Preference shares
issued
Share issue expenses (190)
Balance as at
31 December 2006 288 222 599 2 882 348 802
For the year ended
General
Revaluation risk Accumulated
reserve reserve profit
R`000 R`000 R`000
Balance as at
31 December 2003 2 902 57 638 368 493
Transfer to/(from)
reserves (39) 13 188 (13 149)
Net profit for the
year 147 414
Balance as at
31 December 2004 2 863 70 826 502 758
Transfer to/(from)
reserves (40) 26 785 (26 745)
Net profit for the
year 294 483
Share issues
Share issue expenses
Balance as at
31 December 2005 2 823 97 611 770 496
Transfer to/(from)
reserves (2 823) 83 210 (80 387)
Net profit for the
year 386 060
Ordinary shares
repurchased
Preference shares
issued
Share issue expenses
Balance as at
31 December 2006 - 180 821 1 076 169
For the year ended Total Preference
ordinary share capital Total
shareholders` and shareholders`
equity premium equity
R`000 R`000 R`000
Balance as at
31 December 2003 866 258 - 866 258
Transfer to/(from)
reserves - -
Net profit for the
year 147 414 147 414
Balance as at
31 December 2004 1 013 672 - 1 013 672
Transfer to/(from)
reserves - -
Net profit for the
year 294 483 294 483
Share issues 215 000 215 000
Share issue expenses (351) (351)
Balance as at
31 December 2005 1 522 804 - 1 522 804
Transfer to/(from)
reserves - -
Net profit for the
year 386 060 386 060
Ordinary shares
repurchased (300 000) (300 000)
Preference shares
issued - 300 000 300 000
Share issue expenses (190) (1 938) (2 128)
Balance as at
31 December 2006 1 608 674 298 062 1 906 736
SEGMENTAL ANALYSIS BY OPERATION
For the year ended Total assets (Rbn) Total income
(Rm)
Reviewed Audited Reviewed
December December December
2006 2005 2006
Motor Finance 17.3 12.1 481.8
Property Finance 5.0 3.3 228.1
Medical Finance 3.0 2.0 64.5
Supplier Asset Finance 3.5 2.9 165.3
Treasury and Eliminations 1.6 1.5 (7.8)
Total 30.4 21.8 931.9
Total income (Rm) Net profit (Rm)
Audited Reviewed Audited
December December December
2005 2006 2005
Motor Finance 359.6 173.4 124.2
Property Finance 209.5 113.6 99.0
Medical Finance 43.1 15.9 3.0
Supplier Asset Finance 125.1 76.4 42.8
Treasury and Eliminations 2.9 6.8 25.5
Total 740.2 386.1 294.5
KEY RATIOS
As at December December
2006 2005
R`000 R`000
Net interest income to average
interest-earning banking assets % 4.42 4.38
Impairment charge to average gross loans
and advances % 0.87 0.66
Non-interest revenue to total income % 6.88 6.84
Cost-to-income ratio % 35.40 41.25
Return on ordinary shareholders` equity % 24.66 23.22
Return on total assets % 1.48 1.52
Bank capital adequacy ratio
- Tier 1 % 6.07 7.07
- Total % 10.48 10.20
SHARE STATISTICS
Number of shares in issue
- Ordinary shares m 288.2 358.9
- Preference shares m 3.0 -
Preference share traded price (closing) rands 99.0 -
OPERATING DIVISIONS % OF NET PROFIT
See press announcement for graph
REVIEWED RESULTS - AUDITORS` OPINION
Imperial Bank`s auditors, Deloitte & Touche, have reviewed these results and
their unmodified review opinion is available for inspection at the company`s
registered office.
CORPORATE INFORMATION
Registered office: Imperial Bank, 24 Achter Road, Paulshof, Sunninghill,
2191.
PO Box 6093, Rivonia, 2128
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd, 70
Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown, 2107
Directors: W G Lynch: Chairman (Irish), R van Wyk: Chief Executive Officer*,
O S Arbee, L E Bakoro, C J W Ball, H R Brody, M J Croucamp, M A Enus-Brey, P
C W Hibbit*, P A Wessels *Executive
Company Secretary: P Hassim
Sponsor: Nedbank Capital
Imperial Bank is an authorised financial services provider
Date: 16/02/2007 08:00:06 Produced by the JSE SENS Department.
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