Achievements and Awards…

Property development –Commercial projects - 1st runner up - Zimbabwe Project Management 2017 Awards Best bank supporting SME’S development - 1st runner up - ZNCC Awards 2017 Silver medal - Best SMEs Business Advisory Services - SMEs International Expo 2016

Outstanding Financial Institution of the year - 1st runner up - Megafest Business Awards 2016 Most Innovative Agency Banking Service - Agent Banking and Digital Financial Services Conference and Awards 2016 Best Turnaround Strategy in 2015 - Zimbabwe Quoted Companies Survey 2016 Awards FY17 Analysts’ Briefing Outline

1 FY Financial outturn

2 Strategy execution

3 www.zb.co.zw 1 FY Financial outturn

4 www.zb.co.zw Highlights show strong performance and asset growth....

5 www.zb.co.zw Annual performance exhibits an upward trend over the past 4 years….

• 36% increase in earnings resulted in the EPS increasing by 45% and a 3% increase in ROE. • Competitive returns have also accrued to the life fund.

Summarised statement of profit or loss ($m) Profit after tax ($m) FY17 FY16 % Change

Total Income 72.69 65.07 12%

Total expenses (50.94) (49.46) -3% 15.51

Profit Before Tax 21.75 15.61 39% 11.43 Transfer to Life Fund (3.56) (0.48) -646% 9.36

Share of profit in associate 0.66 (2.30) 129% FY14 FY15 FY16 FY17 Income tax expense (3.34) (1.39) -139% (9.36) Profit for the year 15.51 11.43 36% Earnings per share (EPS) (cents) 9.15 6.32 45% Return on equity (ROE) 16% 13% 3%

6 www.zb.co.zw Interest rates softened as liquidity increased on the market…. • Net interest income (NII), however, increased as the funding book repriced faster than the supported assets. • This was also enhanced by the tactical shift from wholesale to retail funding during the year. • NII contribution to total income remained low at 24%.

Net interest income FY 17 FY 16 Change Net interest income trend ($m)

Interest income Interest expense Net interest income

Gross interest income(GII) 24.82 27.59 -10% 32 28 28 25 Interest expense 7.01 10.85 35% 20 17 17 18 13 11 11 Net interest income(NII) 17.81 16.74 6% 7

FY14 FY15 FY16 FY17 NII to GII ratio 72% 61% 11%

7 www.zb.co.zw Premiums from the life assurance business firmed…. • Gross life premiums increased in response to improved product penetration driven by the recruitment of more agents. • The technical assurance result improved by 11% on the back of 2.2% improvement in the related expenses ratio from 46.3% to 45.2%. • Annual performance for the past 3 years exhibit a steady and sustainable growth pattern.

Net Life Assurance Premium Income ($m) Net life assurance premium income ($m) FY 17 FY 16 Change

6.41 Life assurance premium 11.70 10.72 9% 5.09 5.76 4.98 Life assurance expenses (5.29) (4.96) 7%

Technical result 6.41 5.76 11% FY14 FY15 FY16 FY17 Technical expenses ratio 45.2% 46.3% 2.2%

8 www.zb.co.zw Reinsurance business remained flat…. • Reduction in local premiums was offset by an increase in premiums from the region whose contribution increased from 21% to 25%. • Technical expenses reduced marginally in tandem with a satisfactory claims outturn. • Technical results, however, exhibit mild volatility over the last 4 years.

Net Reinsurance Premium Income ($m) Net reinsurance premium income ($m) FY 17 FY 16 Change

3.49 Reinsurance premium 19.10 19.13 0% 3.51

3.18 Reinsurance expenses (15.92) (16.10) -1%

3.03 Technical result 3.18 3.03 5% FY14 FY15 FY16 FY17

Technical expenses ratio 83.4% 84.1% 0.9%

9 www.zb.co.zw Non-funded income contributed 67% of total income…. • Banking commissions and fees increased by 9% largely driven by increased volumes in electronic banking products. • Investment returns increased significantly as underlying assets in portfolio paid dividends and experienced appreciation in value in line with movements on the ZSE. • Other income includes fees earned on advisory mandates. Non-funded income Non-funded income trend ($m) FY 17 FY 16 Change Mix

Commissions and fees Fair Values Dividend received Other income

Commissions and fees 37.80 34.63 9% 78% 4 4 3 5 3 5 1 Fair Values 2.73 0.24 1038% 6%

38 32 33 35 Dividend received 3.80 0.68 455% 8%

(1) (3) Other income 3.97 3.22 23% 8% FY14 FY15 FY16 FY17

Total 48.30 38.77 25% 100% 10 www.zb.co.zw Cost efficiency has improved over the last 4 years despite pressure for expense build up….

• Operating expenses increased due to higher acquisition costs in banking and insurance operations, advertising and brand promotion expenses.

OPEX analysis($m) Cost to income ratio % FY 17 FY 16 Change Mix Administration 14.21 13.21 -8% 28% Staff 23.49 21.73 -8% 46% Occupation 4.23 4.94 14% 8% 99% Computer and IT 2.20 2.30 4% 4% Communication 0.88 0.61 -44% 2% 80% 70% Transport 1.00 1.11 10% 2% 76% Cash based OPEX 46.01 43.91 5% 90% Depreciation 2.47 2.61 5% 5% Amortisation 2.45 2.95 17% 5%

Non-cash OPEX 4.93 5.56 -11% 10% FY14 FY15 FY16 FY17 Total Expenditure 50.94 49.46 -3% 100%

11 www.zb.co.zw % change in income grew faster than the % change in expenses….

• Rate of income growth has been higher than the OPEX growth rate, creating a base for performance sustainability. % change in expenses % change in income

-4% 1% 12% 12%

7% 3% -1% -19%

FY14 FY15 FY16 FY17

12 www.zb.co.zw Total income contribution mainly driven by non-funded income….

Total income contribution FY 17 FY 16

Net earnings from lending activities 20% 27%

Net reinsurance income 4% 5%

Net life assurance income 9% 9%

Non-funded income 67% 59%

Total income 100% 100%

13 www.zb.co.zw All business units posted positive results….

SBU PAT contribution- FY 17($m) SBU PAT contribution- FY 16($m)

12.70 9.76

1.28 1.02 0.95 0.68

0.51 0.40

Banking

Banking

Reinsurance

Life Assurance Life

Reinsurance

Other segments Other

Life Assurance Life Other segments Other

14 www.zb.co.zw Underlying assets increased by 20%.... • Earning Assets contributed 70% of total assets. • Investment securities increased by 80% as the Group optimised on short-term opportunities.

Composition of Total Assets ($m) Total assets growth ($m) FY17 FY16 Change Chart Title Earning assets Treasury Bills 155.95 118.63 31% Earning assets Total assets Money market investments 3.54 5.52 -36% Loans and other advances 104.97 99.19 6% Investment properties 31.11 27.87 12% 527 Investment securities 36.71 20.40 80% Investment in associates 35.49 35.23 1% 439 418 Total earning assets 367.77 306.84 20% 416 368 Non-earning assets 307 287 Cash and short term funds 106.82 82.19 30% Other assets 12.97 9.80 33% 230 Property and equipment 39.45 40.45 -2% Total non-earning assets 159.32 132.45 20%

Grand total 527.09 439.29 20% FY14 FY15 FY16 FY17 Earning assets contribution 70% 70% 0%

15 www.zb.co.zw Treasury Bills (TBs) investments have remained a major source of income and capital stability…. • TBs purchased from primary market are earning coupon interest rates between 9-10% whilst secondary market trades have earned discount rates above 10% per annum.

Treasury bills by category ($m) Treasury bills growth ($m) FY 17 FY 16 change

TBs from primary market 11.43 - 100% 156 TBs from secondary market 105.69 83.49 27%

119 Capitalisation treasury bills 15.34 14.89 3% 101

ZAMCO TBs 23.49 20.26 16% 8 Total 155.95 118.64 31% FY14 FY15 FY16 FY17

16 www.zb.co.zw The Group has maintained a cautious approach to private sector credit expansion.… • General facility utilization has been low averaging below 60%. • Mortgage expansion was affected by pricing dynamics on the market which rendered mortgage finance unattractive to most sellers. • The Group has increased focus on guarantee programmes for loan growth. Gross Loans by product ($m) Gross loans growth trend ($m) FY17 FY16 Change

Mortgage advances 16.90 17.73 -5%

Short term loans 91.85 84.59 9% 173 128 Bankers acceptances 1.40 3.43 -59% 119 115 Insurance debtors 4.62 3.83 21%

Guarantees 13.57 5.51 146%

Total 128.34 115.09 12% FY14 FY15 FY16 FY17

17 www.zb.co.zw Lending improved by 12%, underpinned by Agric and Services….

GROSS LOANS SECTORAL ANALYSIS FY 17 FY 16 FY 17 FY 16 ($m) ($m) Change Contribution Contribution Private 29.05 29.86 3% 23% 26% Mortgage loans 16.9 17.73 5% 13% 15% Agriculture 12.75 11.41 12% 10% 10% Mining 0.67 6.79 90% 1% 6% Manufacturing 20.24 13.53 50% 16% 12% Distribution 7.29 7.57 4% 6% 7% Contruction 1.90 0.97 95% 1% 1% Transport 3.47 1.3 166% 3% 1% Services 25.39 18.41 38% 20% 16% Financial 10.03 6.96 44% 8% 6% Communication 0.64 0.65 1% 1% 1% Total 128.34 115.09 12% 100% 100%

18 www.zb.co.zw ….and aggressive collections reduced NPLS over time….

• The Group continues to focus on creating quality assets. • The NPL ratio improved from 23% in FY 16 to 11% in FY17.

Gross loans impairment analysis ($m) Non-performing loans ratio (%)

Non-performing loans Provisions 35% 60 30% 50 29% 49 25% 40 20% 23% 20% 30 18% 30 15% 26 20 24 10% 11%

10 12 13 14 5% 10 10 5 - 0% FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17

19 www.zb.co.zw Reduction in NPLs is across all sectors except for construction….

NPL sectoral analysis FY17 FY16 FY17 FY16 ($m) ($m) Change Contribution Contribution Private 3.42 6.81 50% 25% 26% Agriculture 0.76 4.64 84% 6% 18% Mining 0.39 0.47 17% 3% 2% Manufacturing 3.59 6.3 43% 26% 24% Distribution 2.30 4.16 15% 17% 16% Construction 1.02 0.34 200% 7% 1% Communication 0.00 0.02 95% 0% 0% Services 1.38 1.84 25% 10% 7% Financial Services 0.82 1.38 41% 6% 5% TOTAL 13.69 25.98 47% 100% 100%

20 www.zb.co.zw Debt workout through ZAMCO continued to provide earnings relief….

• During FY17 ZAMCO provided credit relief to the Group with TBs worth $3.2m bringing the cumulative rescue package to $23.5m in respect of Non-Performing Loans. • The cured assets in FY17 were largely in the Agriculture Sector (57%) and Manufacturing Sector (25%).

FY17 FY16 2% SECTOR ($m) ($m) Agriculture Agriculture 1.80 1.34 25% Distribution Distribution 0.52 0.64 Manufacturing Manufacturing 0.81 0.81 57% Communication Services 0.05 0.28 16% Transport - 0.66 Annual total 3.18 3.72 Cumulative total 23.49 20.26

21 www.zb.co.zw Funding improved supported by organic growth in capital and deposit expansion….

• The Life Fund increased in tandem with the appreciation in value of the underlying assets as well as improved business mobilisation. Funding Sources FY17 ($m) FY16 ($m) % Change

Total equity 101.13 89.43 13%

Deposits and other accounts 347.11 275.27 26%

Life assurance funds 31.81 28.25 13%

Trade and other payables 33.09 32.80 1%

Long term loan 13.94 13.54 3%

Total 527.09 439.29 20% 22 www.zb.co.zw Equity growth remains a strategic focus area….

• The Group has maintained dividend payouts in line with stakeholder expectations. • 79% of total equity is attributable to shareholders of the parent company.

Equity distribution($m) Movement in capital levels ($m) FY17 FY16 Change

Total equity 101.13 89.43 13% 17.06 2.41 1.40 89.43 101.13

Equity attributable to parent 80.01 69.15 16%

FY16 Profit Dividend Other FY17 Equity attributable to NCI 21.12 20.29 4% reserves

23 www.zb.co.zw Deposit funding increased in line with money supply trends on the market….

• Wholesale funding contribution reduced to 36% from 39% in FY16. • Retail deposits grew by 65% from $93m to $154m in FY17. Deposits remained transitory in nature.

Deposits by product ($m) Deposits growth ($m) FY17 FY16 Change

Balances of banks 13.20 35.12 -62% 347 Demand 53.67 40.64 32% 270 275 Savings 154.06 93.35 65% 244

Fixed deposits 126.16 106.16 19%

Total 347.11 275.27 26% FY14 FY15 FY16 FY17

24 www.zb.co.zw Widespread growth in sector deposits was experienced....

Deposit sectoral analysis FY17 FY16 FY16 ($m) ($m) Change FY17 Contribution Contribution Private individuals 66.92 43.19 55% 19% 16% Agriculture 11.49 10.32 11% 3% 4% Mining 1.19 1.23 4% 0% 0% Manufacturing 44.32 16.28 172% 13% 6% Distribution 10.72 10.02 7% 3% 4% Construction 6.13 2.07 196% 2% 1% Transport 1.57 1.3 21% 0% 0% Services 92.35 69.22 33% 27% 25% Financial 66.25 95.84 31% 19% 35% Communication 46.16 25.78 79% 13% 9% TOTAL 347.1 275.3 26% 100% 100%

25 www.zb.co.zw Key ratios show improved performance resilience….

Key Performance ratios FY17 FY16 FY15 FY14 Net interest income ratio 20% 27% 24% 21% Non-interest income ratio 80% 73% 76% 79% Cost to income ratio 70% 76% 80% 99% Earnings per share 9.15 6.32 5.71 5.90

Loans to deposits ratio 30% 36% 36% 59% Liquidity ratio 77% 75% 60% 38% Capital ratio 19% 20% 19% 16%

Return on equity 16% 13% 13% -13% Return on assets 3% 2% 2% -3%

26 www.zb.co.zw 2 Strategy execution

27 www.zb.co.zw Credit Ratings remained acceptable given the operating environment….

Company FY 17 FY 16 Rating Review Date

ZB Bank Limited BB- BB- Sept, 2018

ZB Building Society BB BB Sept, 2018

ZB Reinsurance Limited A- A- May, 2018

28 www.zb.co.zw The Group is targeting a tier 1 capital level of $100m for its banking operations by 2020….

• The Capital plan for the banking operations is predicated on organic growth and some capital injection.

2020 Gross Capital Regulatory Regulatory Excess Gap Regulatory Base Capital Minimum Available to 2020 Company Target ($m) ($m) ($m) ($m) ($m) ($m)

62.1 66.1 25 41 100 (33.9) ZB Bank Limited 17.8 17.8 20 (2.2) 80 (62.2) ZB Building Society 10.2 10.2 5 5.2 5 5.2 ZB Reinsurance Limited 16.1 16.1 2.5 13.6 5 11.1 ZB Life Assurance 0.9 0.9 0.15 0.5 0.15 0.65 ZB Transfer Secretaries Limited

29 www.zb.co.zw Key Focus Areas

1. Following an increase in transaction volumes, substantial investment has been made to stabilise systems, having experienced volatility in the first half of the year. Further investment is underway. 2. Substantial progress has been made towards the re- introduction of the VISA Card. 3. Successfully launched international money transfer operations Banking with various partners. Operations 4. Progress has been made in mobilising Lines of Credit. A facility of $10m is awaiting disbursement whilst another facility of $20m with a regional bank is at closing stage. 5. In supporting capacity building and financial inclusion, the Group is participating in the Education Loan Facility, Women Empowerment Fund and Irrigation Facility as co-arranger and disbursement agent. 6. A Diaspora desk has been established.

30 www.zb.co.zw Key Focus Areas 1. Satisfactory progress has been made in the implementation of the new life policy administration system. Parallel runs are underway with go-live having been scheduled for the end of the first quarter. The system is expected to improve efficiencies as well as Insurance enhance customer interactions. Operations 2. Regional operations have continued to contribute a significant portion of reinsurance premiums at 25% (FY16 – 21%). 3. Establishment of physical presence in the region remains constrained by the shortages of foreign currency.

31 www.zb.co.zw Key Focus Areas

1. Acquisition of land banks remains a focus area; the Group believes this area to be a source of strategic growth in the future. - A budgeted amount of $10m, over the next 48 months for land bank acquisitions. - The Group has acquired 708 stands in Plumtree. Projects & Development and selling is expected to Property Developments commence during FY18. - The Group is in the process of finalising the acquisition of 678 stands in Kadoma. 2. Springvale housing project in Ruwa is now sold out. 3. Selling of 150 stands in Beitbridge was tactically slowed down in order to allow prices to stabilise. The Group continues to monitor developments.

32 www.zb.co.zw Key Focus Areas

1. The Group successfully closed the $100m ZINARA Emergency Road Rehabilitation Bond which was 5% oversubscribed. 2. A rollout of the last-mile reticulation of electricity in underserviced areas is underway and suburbs covered so far include: Rusike (Phases 1 & 2), Mukanya, Northwing (all in Projects & Marondera), Springvale (Ruwa), Madokero (Harare). Property 3. The Group is assisting local authorities with turn-key solutions Developments for prepaid water and related water augmentation facilities, as well as road rehabilitation projects. Roll out is underway for a select portfolio of local authorities. 4. The Group is participating in a pilot for solar geysers which is a national project. Uptake has, however, been generally slow.

33 www.zb.co.zw Key Focus Areas

1. The Group embarked on a Digitisation strategy, with a view to enhancing transaction processing capability and improving service delivery. 2. An upgrade of the core banking system together with the supporting hardware and storage facilities was Systems completed during the year. 3. The Group has bought 3 000 POS machines during the year and they are in the process of being deployed.

34 www.zb.co.zw Key Focus Areas

1. Enhancement of delivery channels and rationalisation of geographical footprint. 2. Branch refurbishments were completed for Borrowdale, Mutare, Women University in Africa Service (WUA) and Zimbabwe Ezekiel Guti University (ZEGU). delivery 3. The Group conducted Customer Care Clinics in order to refresh service quality.

35 www.zb.co.zw ---THE END--- Data Card

37 www.zb.co.zw ZB Bank

Financial Highlights

FY17 FY16 Line Item Change Key Ratios FY17 FY16 US$m US$m Return on Equity 19% 16% Total Assets 443.0 358.5 24% Return on Assets 3% 2% Total Equity 62.1 56.2 11% Cost to Income Ratio 76% 80%

Total Income 51.2 49.3 4% Loans to Deposit Ratio 29% 43% NPL ratio 11% 23% Expenses 38.7 39.4 2% Liquidity Ratio 73% 71% PBT 12.5 9.5 31% Capital adequacy ratio 26% 25%

38 www.zb.co.zw ZB Building Society

Financial Highlights

FY17 FY16 Line Item Change US$m US$m Key Ratios FY17 FY16

Total Assets 45.52 48.22 6% Return on Equity 6% 2% Total Equity 22.23 21.60 3% Return on Assets 3% 1% Total Income 7.59 7.01 8% Cost to Income Ratio 81% 94% Expenses 6.14 6.60 7% Capital adequacy ratio 55% 48% PBT 1.45 0.40 258%

39 www.zb.co.zw ZB Reinsurance

Financial Highlights

FY17 FY16 Line Item Change Key Ratios FY17 FY16 US$m US$m

Total Assets 14.05 15.36 9% Return on Equity 5% 13%

Total Equity 10.22 10.00 2% Return on Assets 5% 8%

Total Income 2.95 3.20 8% Cost to Income Ratio 75% 61%

Expenses 2.22 1.95 14%

PBT 0.73 1.24 42%

40 www.zb.co.zw ZB Capital

Financial Highlights

FY17 FY16 Line Item Change Key Ratios FY17 FY16 US$m US$m

Total Assets 1.26 0.54 131% Return on Equity 69% 44%

Total Equity 1.06 0.52 105% Return on Assets 60% 30%

Total Income 0.95 0.33 191% Cost to Income Ratio 18% 40%

Expenses 0.17 0.13 27%

PBT 0.78 0.20 301%

42 www.zb.co.zw ZB Transfer Secretaries

Financial Highlights

FY17 FY16 Line Item Change Key Ratios FY17 FY16 US$m US$m

Total Assets 0.99 1.00 1% Return on Equity 12% 49%

Total Equity 0.88 0.78 13% Return on Assets 10% 38%

Total Income 0.40 0.63 36% Cost to Income Ratio 68% 26%

Expenses 0.27 0.25 10%

PBT 0.13 0.38 66%

43 www.zb.co.zw ZB Associated Services

Financial Highlights

FY17 FY16 Line Item Change Key Ratios FY17 FY16 US$m US$m

Total Assets 0.88 0.83 7% Return on Equity 27% 95%

Total Equity 0.78 0.67 17% Return on Assets 24% 118%

Total Income 1.14 1.75 35% Cost to Income Ratio 76% 55%

Expenses 0.86 0.96 10%

PBT 0.27 0.79 65%

44 www.zb.co.zw