BDO Visura
Financial Services
CH-8031 Zurich, Fabrikstrasse 50
Phone 044 444 3 721, Fax 044 444 3 784
www.bdo.ch
Member of Swiss Institute of Certified
Accountants and Tax Consultants
To the Board of Directors of
ICB Financial Group Holdings AG
Schulhausstrasse 1
8834 Schindellegi
Review report on the consolidated interim financial statements
(for the 6 month period ended 30 June 2008)
In accordance with your instructions, we have reviewed the consolidated interim
financial statements (Consolidated Income Statement, Consolidated Balance
Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in
Equity and the related notes 1 to 9) of ICB Financial Group Holdings AG for the
six month period ended 30 June 2008.
These consolidated interim financial statements are the responsibility of the
Board of Directors. Our responsibility is to issue a report on these
consolidated interim financial statements based on our review.
Our review was conducted in accordance with Swiss Auditing Standard 910
applicable to review engagements, which requires that a review be planned and
performed to obtain moderate assurance about whether the consolidated interim
financial statements are free from material misstatement. A review is limited
primarily to inquiries of personnel and analytical procedures applied to
financial data and thus provides less assurance than an audit. We have not
performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to
believe that the accompanying consolidated interim financial statements do not
give a true and fair view in accordance with the International Financial
Reporting Standards (IFRS).
Zurich, 5 September 2008
BDO Visura
Markus Eugster Francesco Lava
Swiss Certified Accountant Swiss Certified Accountant
ICB FINANCIAL GROUP HOLDINGS AG
Incorporated in Switzerland
Registration Number CH-130.3.009.158-0
INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTH
PERIOD ENDED 30 JUNE 2008
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Interim Financial Statements
For The 6 Month Period Ended 30 June 2008
Contents Page(s)
Interim Results Summary 1
Financial Highlights 1
Chairman's Statement 2-3
Consolidated Income Statement 4
Consolidated Balance Sheet 5
Consolidated Cash Flow Statement 6 - 7
Consolidated Statement of Changes in Equity 8 - 9
Notes to the Interim Financial Statements 10 - 13
ICB Financial Group Holdings AG
Interim Results For The 6 Month
Period Ended 30 June 2008
Interim Results Summary
ICB Financial Group Holdings AG ("ICB") which provides commercial banking
services to businesses and individuals through its banks in Africa, Indonesia,
Albania and newly acquired bank in Bangladesh is pleased to announce its
unaudited consolidated results for the six months ended 30 June 2008.
Financial Highlights
1. Profit attributable to shareholders for the year is USD80.189 mil (June
2007: USD9.717 mil.).
2. Net interest income grew by 2.8%.
3. Gain on disposal of associate, Sorak Financial Holdings Pte Ltd, USD80.379
mil.
4. Loans and advances grew by 33.5% as compared to 31 December 2007.
5. Total assets have grown by 36.5% as compared to 31 December 2007 mainly
contributed from the acquisition of 50.1% interest in The Oriental Bank
Ltd, Bangladesh (ICB Islamic Bank Ltd).
6. Customer deposits grew by 26.2% as compared to 31 December 2007.
7. Impairment charges decrease to USD0.857 mil. (June 2007: USD4.331 mil.)
reflecting an improvement in the quality of the loan books.
8. Operating expenses increased by 17% compared to 30 June 2007, in line with
increased business activity and growth in number of branches.
9. Basic and fully diluted earnings per share is USD0.45 (June 2007: USD0.08).
ICB FINANCIAL GROUP HOLDINGS AG
Chairman's Statement 30 June 2008
I am pleased to present the consolidated financial statements (unaudited) for
ICB Financial Group Holdings AG ("the Group") for the period ended 30 June
2008.
The Group recorded a substantial increase in net profit of USD82.1 million in
the first half of the financial year, compared to USD10.6 million in the same
period last year. Profit attributable to Shareholders amounted to USD80.1
million (June 2007: USD9.7 million). The significant increase in net profit was
attributed to an extraordinary gain of USD80.3 million on the disposal of the
Group's stake in an associate company, Sorak Financial Holdings Pte. Ltd in
January this year.
Total assets of the Group grew by 36% (USD374.7 million) reaching USD1.4
billion as at 30 June 2008. A significant portion of this growth is
attributable to the purchase of the 51% interest in The Oriental Bank Limited,
Bangladesh (since renamed ICB Islamic Bank Limited) in March this year. Loans
and Advances increased by USD181.3 million or 34% to USD721.9 million. Deposits
from customers rose by USD240.7 million (32%) to USD 987.4 million (June 2007:
USD746.7 million).
Impairment charges for loans and advances have reduced significantly in the
half year to USD857,000 (USD4.3 million, June 2007). This reflects improvements
in the overall quality of the loan books coupled with an increase in recoveries
of assets previously categorized as doubtful. Impairment charges for the
Bangladesh unit were recognized and taken up in the books as pre-acquisition
reserves at the point of acquisition in March and are reflected in the
Goodwill.
Performance by most banks in the Group during the half year has been flat with
business activity falling below projected levels. This is reflective of much
greater caution now applying across world financial markets. Across the Group
income lines have been under significant pressure. The net interest margin
averaged 2.8% as at June 2008 compared to 3.7% in the corresponding period last
year. The effect of this, together with an increase in operating expenses of
USD3.8m primarily required to support expansion plans, has resulted in
deterioration in the Group Cost/Income ratio to 81%.
The acquisition of the Oriental Bank, Bangladesh enables the Group to establish
a presence in an important Asian market which, albeit from a relatively low
base, is developing rapidly. There is a strong and growing demand for retail
banking services with the ICB banking model being well suited to the Bangladesh
consumer environment. Integrating the Bank as part of the Group is already well
advanced. This will be followed with the implementation of measures to build a
stronger market profile and where the ability to deliver products and services
in a Sharia'h compliant manner will feature prominently in what is a
predominantly Muslim nation.
A trend of modest growth is predicted for the remainder of the year. Asset
growth in particular is likely to remain depressed due not only to local market
conditions but also to the fact that the current world economic climate
identifies the adoption of cautious credit risk management to be prudent.
However, the strategy of building a stronger presence in the emerging markets
remains. Banking licences have been obtained in both Malawi and Laos with
operations there scheduled to commence in the final quarter of this year.
Michael Hanlon
Chairman
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Income Statement
For The 6 Month Period Ended 30 June 2008
6 months 6 months
ended
ended
Note 30-Jun-08 30-Jun-07
USD'000 USD'000
Interest income 49,418 48,893
Interest expense (24,603) (24,754)
Net interest income 24,815 24,139
Net fee and commission income 5,123 5,127
Foreign currency (loss)/gain (1,843) 2,641
Gains less losses from financial 1,189 228
investments
Gain on disposal of associate 8 (a) 80,379 2,491
Other operating income 2,995 1,369
Impairment charges for loans and advances (857) (4,332)
to customers
Fair value change in foreclosed properties (1,303) (157)
Operating expenses (26,264) (22,436)
Operating profit 84,234 9,070
Share of results of associates 37 3,278
Profit before taxation 84,271 12,348
Tax expense (2,122) (1,739)
Profit for the period 82,149 10,609
Attributable to:
- Shareholders of the Company 80,189 9,717
- Minority interests 1,960 892
82,149 10,609
Earnings per share attributable to
shareholders of the Company
- Basic and diluted (Expressed in USD per 3 0.45 0.08
share)
The accompanying notes form an integral part of the financial statements.
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Balance Sheet
As At 30 June 2008
30-Jun-08 30-Dec-07
Note USD'000 USD'000
ASSETS
Cash and bank balances 297,374 239,769
Loans and advances to customers 4 721,967 540,683
Financial investments 169,287 93,221
Foreclosed properties 20,292 21,056
Investment in associates 2,116 74,364
Goodwill and other intangible assets 9 112,671 5,341
Prepaid lease payments 146 165
Property and equipment 16,827 9,251
Other assets 58,255 40,489
Deferred tax assets 2,046 1,945
Total assets 1,400,981 1,026,284
LIABILITIES
Deposits from other banks 69,076 39,157
Customers' accounts 5 942,049 746,734
Borrowings 79,864 -
Other liabilities 76,222 39,326
Tax liabilities 1,692 2,093
Deferred tax liabilities 229 192
Total liabilities 1,169,132 827,502
EQUITY
Paid up share capital 6 145,960 145,960
Share premium 782 782
Retained earnings 103,919 34,903
Other reserves 14,491 (2,341)
Equity attributable to shareholders of the 265,152 179,304
Company
Minority interests (33,303) 19,478
Total equity 231,849 198,782
Total equity and liability 1,400,981 1,026,284
The accompanying notes form an integral part of the financial statements.
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Cash Flow Statement
For The 6 Month Period Ended 30 June 2008
6 months 6 months
ended ended
30-Jun-08 30-Jun-07
USD'000 USD'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 84,271 12,348
Adjustment for :
Impairment charges for loans and advances to 857 4,332
customers
Amortisation of prepaid lease rental 20 20
Amortisation of intangible assets 220 194
Depreciation of property and equipment 1,219 992
Fair value change in foreclosed properties 1,303 157
Gain on disposal of associate (80,379) (2,491)
Share of results of associates (37) (3,278)
Gain on foreign exchange translation (761) (2,641)
Operating profit before working capital changes 6,713 9,633
Increase in operating assets (48,891) (84,119)
Increase in operating liabilities 33,764 99,239
Cash (used in)/generated from operations (8,414) 24,753
Tax paid (1,857) (1,073)
Net cash (used in)/from operating activities (10,271) 23,680
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of associate 156,928 6,059
Acquisition of subsidiary, net of cash acquired (38,525) -
Purchase of property and equipment (1,653) (2,354)
Purchase of intangible assets (202) (222)
Proceeds from sale of property and equipment - 356
Net (increase)/decrease in financial investments (28,866) 18,029
Net cash from investing activities 87,682 21,868
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Cash Flow Statement(Cont'd.)
For The 6 Month Period Ended 30 June 2008
6 months 6 months
ended ended
30-Jun-08 30-Jun-07
USD'000 USD'000
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of shareholder's advances - (13,866)
Dividend paid to minority interest (183) (84)
Net proceeds received from issuance of shares by - 9,016
Company
Net cash used in financing activities (183) (4,934)
Net increase in cash and cash equivalents 77,228 40,614
Cash and cash equivalents at the beginning of 194,224 108,951
the period
Effect of exchange rate changes on cash and cash 2,391 16,988
equivalents
Cash and cash equivalents at the end of the 273,843 166,553
period
Cash and Cash Equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise
of cash and bank balances, items in the course of collection less mandatory
reserve deposits with central banks.
The accompanying notes form an integral part of the financial statement.
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Statement Of Changes in Equity
For The 6 Month Period Ended 30 June 2008
<-Attributable to Shareholders of the Company->
Share Share Shareholder's Other Retained Minority
Capital Premium Advances Reserves Earnings Interests Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January 2007 59,549 - 91,618 (372) 24,212 19,508 194,515
Currency translation
differences arising from
translation to - - 424 1,638 - (28) 2,034
presentation currency
Gains in fair value on - - - 11 - 5 16
available-for-sale
securities
Transfer of realised
translation reserve to
retained earnings
arising from
capitalisation
and repayment of - - - 3,187 (3,187) - -
shareholder's advances
Share of - - - (560) (79) - (639)
post-acquisition
reserves of associates
Transfer of reserve to
retained earnings
arising
from disposal of - - - 110 (110) - -
associate
Net income and expenses
recognised directly in
equity - - 424 4,386 (3,376) (23) 1,411
Profit for the period - - - - 9,717 892 10,609
Total recognised income
and expense for the
period - - 424 4,386 6,341 869 12,020
Issue of shares 8,235 782 - - - - 9,017
Conversion of
shareholder's advances
to share
capital 78,176 - (78,176) - - - -
Repayment of - - (13,866) - - - (13,866)
shareholder's advances
Acquisition of minority - - - - - (12) (12)
interest in a subsidiary
Dividend paid to - - - - - (84) (84)
minority interest
At 30 June 2007 145,960 782 - 4,014 30,553 20,281 201,590
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Consolidated Statement Of Changes in Equity (Cont'd.)
For The 6 Month Period Ended 30 June 2008
Attributable to Shareholders of the Company
<------------------------------>
Share Share Other Retained Minority
Capital Premium Reserves Earnings Interests Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
At 1 January 2008 145,960 782 (2,341) 34,903 19,478 198,782
Currency translation
differences arising from
translation to - - 6,485 - 434 6,919
presentation currency
Gains in fair value on - - (826) - (406) (1,232)
available-for-sale
securities
Transfer of reserve to
retained earnings
arising
from disposal of - - 11,173 (11,173) - -
associate
Net income and expenses
recognised directly in
equity - - 16,832 (11,173) 28 5,687
Profit for the period - - - 80,189 1,960 82,149
Total recognised income
and expense for the
period - - 16,832 69,016 1,988 87,836
Minority interest from - - - - (54,586) (54,586)
business combination
Dividend paid to - - - - (183) (183)
minority interest
At 30 June 2008 145,960 782 14,491 103,919 (33,303) 231,849
The accompanying notes form an integral part of the financial statements.
ICB Financial Group Holdings AG
(Incorporated in Switzerland)
Notes To The Interim Financial Statements
1. Basis of Preparation
The interim financial statements of the Group are unaudited and have been
prepared in accordance with International Financial Reporting Standards
("IFRS").
The preparation of financial statements in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, revenues and expenses. Due to the inherent
uncertainty in making those estimates, actual results reported in future
periods could differ from such estimates.
The interim financial statements should be read in conjunction with the audited
financial statements for the year ended 31 December 2007.
The interim financial statements were approved by the board on 12 September
2008.
2. Basis of Accounting
The interim financial statements of the Group have been prepared under the
historical cost convention as modified by the revaluation of available-for-sale
financial assets, financial assets and financial liabilities held at fair value
through profit or loss. The accounting policies and methods of computation
adopted are consistent with those followed in the preparation of the Group's
audited financial statements for the year ended 31 December 2007.
3. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
shareholders by the weighted average number of shares in issue, in the 6 month
period ended 30 June 2008 of 180,000,000 (2007: 117,005,495).
There are no options or other instruments in issue that would dilute the
earnings per share.
4. Loans and Advances to Customers
As at As at
30-Jun-08 31-Dec-07
USD'000 USD'000
Gross loans and advances 837,827 554,203
Less: Allowance for losses on loans and advances (115,860) (13,520)
721,967 540,683
5. Deposits
As at As at
30-Jun-08 31-Dec-07
USD'000 USD'000
Current accounts 168,319 155,299
Saving accounts 127,848 96,430
Time deposits 636,372 489,984
Others 9,510 5,021
942,049 746,734
6. Paid-up Share Capital
No of Shares
As at As at As at As at
30-Jun-08 31-Dec-07 30-Jun-08 31-Dec-07
000 000 USD'000 USD'000
As at 1 January
Share of CHF1 each 180,000 - 145,960 -
Shares of - 75 - 59,549
CHF1,000 each
Change in nominal
value from
CHF1,000 each to - 75,000 - 59,549
CHF1 each
Conversion of - 95,000 - 78,176
shareholder's
advances
Issue of shares - 10,000 - 8,235
As at 30 June/ 31 Dec 180,000 180,000 145,960 145,960
7. Subsidiaries & Associates
Details of subsidiaries & Associates are as follows:
% effective interest held
Country of As at As at Principal
Incorporation 30-Jun-08 31-Dec-07 Activities
Name of subsidiaries
International Commercial Commercial
Bank (The Gambia) Ltd. Gambia 99.10 99.10 Bank
International Commercial Commercial
Bank S. A. Guinea 97.00 97.00 Bank
International Commercial Commercial
Bank (Sierra Leone) Ltd. Sierra Leone 99.98 99.98 Bank
International Commercial Commercial
Bank SH. A Albania 100.00 100.00 Bank
ICB-Banco Internacional Commercial
De Comércio, S.A.R.L Mozambique 99.99 99.99 Bank
International Commercial Commercial
Bank Limited Ghana 100.00 100.00 Bank
PT Bank Bumiputra Commercial
Indonesia Tbk Indonesia 67.07 67.07 Bank
International Commercial Commercial
Bank (Djibouti) S.A. Djibouti 99.90 99.90 Bank
ICB Global Management Providing
Sdn. Bhd. Malaysia 100.00 100.00 Technical &
Management
Services
ICB Islamic Bank Ltd Bangladesh 50.10 - Commercial
Bank
7. Subsidiaries & Associates (Cont'd.)
% effective interest held
Country of As at As at Principal
Incorporation 30-Jun-08 31-Dec-07 Activities
Name of associates
International
Commercial
Bank (Tanzania) Tanzania 20.00 20.00 Commercial
Limited Bank
Sorak Financial Singapore - 20.00 Investment
Holdings Pte. Ltd. Holdings
International
Commercial Commercial
Bank Senegal S.A. Senegal 20.00 20.00 Bank
8. Significant Events
(a) On 5 December 2007, the Company entered into a sale and purchase agreement
("SPA") to dispose of its entire equity interest in Sorak Financial Holdings
Pte. Ltd. (Sorak), for a total cash consideration of SGD211,625,592. The
disposal has resulted in a gain of USD80,379,000. The disposal was completed on
8 January 2008.
(b) On 28 February 2008, the Company entered into a share sale and purchase
agreement ("SSPA") to acquire a 50.1% equity interest in ICB Islamic Bank Ltd
(formerly The Oriental Bank Limited), a bank incorporated in Bangladesh by way
of subscription of new ordinary shares amounting to 3,506,743 for a total cash
consideration of BDT3,506,743,888. The acquisition was completed on 27 March
2008.
9. Goodwill and Other Intangible Assets
Included in goodwill and other intangible assets is the provisional goodwill
amount of USD107,459,275 arising from the recent acquisition of ICB Islamic
Bank Ltd. The carrying value of the goodwill amount will be adjusted subject to
completion of the purchase price allocation exercise.
A PDF copy of the announcement and the interim financial statements is available
on the Company's website at www.icbankingroup.com.
ICB Financial Group Holdings AG's AIM nominated adviser is RFC Corporate
Finance Ltd. Contact Stephen Allen +61 8 9480 2500.
END
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