Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Summarised financial report For the year ended June 30 2015
INDEX The reports and statements set out below comprise the summarised consolidated annual financial statements presented to the shareholder: Six-year review 1 – 5 Chairman’s report 6 Managing Director’s executive overview 7 Governance report 8 – 15 Integrated operational review 16 – 21 Our Corporate Social Investment mission 22 – 23 Independent auditors’ report 24 Summarised consolidated statement of comprehensive 25 income Summarised consolidated statement of financial position 26 Summarised consolidated statement of cash flows 27 Summarised consolidated statement of changes in equity 28 Accounting policies 29 Selected explanatory notes to the summarised 29 – 33 consolidated annual financial statements www.bidvestbank.co.za
Bidvest Bank Limited (Registration number 2000/006478/06)
Summarised consolidated annual financial statements for the year ended June 30 2015
The preparation of these summarised consolidated annual financial statements was supervised by: G Oxford CA(SA) Head Financial Control
These summarised consolidated annual financial statements have been audited in compliance with the applicable requirements of the Companies Act, 71 of 2008.
These financial statements represents a summary of the consolidated annual financial statements for the year ended June 30 2015.
A copy of the full set of consolidated financial statements can be obtained from the Company Secretary, Di Crawley, by sending a request to [email protected]. Six-year review Adjusted consolidated statement of financial performance for the year ended June 2015 2014 2013 2012 2011 2010 R’000 R’000 R’000 R’000 R’000 R’000 Interest income 222 354 188 806 154 528 100 514 93 523 97 751 Imputed interest from rental income* 51 719 61 974 75 733 99 014 101 222 9 168 Interest expense (91 198) (79 714) (71 717) (59 838) (74 401) (45 385) Net interest income 182 875 171 066 158 544 139 690 120 344 61 534
Fee and commission income 264 142 248 489 228 517 216 435 199 582 200 492 Fee and commission expense (80 201) (74 781) (68 897) (62 893) (54 641) (46 677) Net fee and commission income 183 941 173 708 159 620 153 542 144 941 153 815 Leasing income 324 459 312 239 369 477 497 406 419 016 25 798 Imputed interest reflected under net interest income* (51 719) (61 974) (75 733) (99 014) (101 222) (9 168) Net income from leasing 272 740 250 265 293 744 398 392 317 794 16 630 Net trading income 267 734 263 557 238 758 237 819 262 172 245 822 Other (loss)/income (9 737) 4 007 10 136 902 2 819 7 023 Operating income 897 553 862 603 860 802 930 345 848 070 484 824 Net credit impairment charges (562) (4 111) (6 737) (1 456) (2 239) (1 402) Operating income after credit impairment charges 896 991 858 492 854 065 928 889 845 831 483 422 Employment costs (295 541) (271 500) (244 935) (246 637) (210 794) (134 427) Operating leases (76 453) (73 818) (70 916) (67 186) (66 915) (46 998) Risk control (23 646) (23 656) (23 751) (24 552) (27 041) (31 976) Information technology costs (24 716) (21 310) (20 582) (21 464) (23 746) (20 737) Depreciation and amortisation (30 151) (30 000) (29 592) (29 925) (31 309) (22 422) Other operating expenditure (80 655) (73 335) (85 857) (93 648) (85 953) (69 789) Operating expenditure (531 162) (493 619) (475 633) (483 412) (445 758) (326 349) Operating income before indirect taxation 365 829 364 873 378 432 445 477 400 073 157 073 Indirect taxation (11 472) (18 324) (15 570) (12 558) (11 247) (10 216) Profit before direct taxation 354 357 346 549 362 862 432 919 388 826 146 857 Direct taxation (91 345) (95 751) (102 483) (115 881) (105 309) (38 536) Profit for the year 263 012 250 798 260 379 317 038 283 517 108 321
*Imputed interest is the portion of interest that is included in leasing rental income from operating rental assets. It is calculated on the monthly outstanding capital balance for each asset.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 1 Six-year review continued Adjusted consolidated statement of financial performance for the year ended June 30 2015 2015 2014 2013 2012 2011 2010 R’000 R’000 R’000 R’000 R’000 R’000
Assets Equipment 74 545 62 713 65 151 70 817 81 582 66 276 Intangible assets 84 914 46 977 36 910 34 969 31 535 30 046 Leased assets 1 851 857 995 188 1 223 601 1 399 660 1 702 077 1 640 712 Loans and advances 1 240 171 1 163 780 1 212 147 1 002 466 680 246 548 169 Negotiable securities 239 067 – – – – – Derivative financial assets 9 844 8 796 21 563 27 550 17 831 28 123 Investment securities 116 184 95 286 98 522 101 599 82 714 59 028 Deferred tax – – – – – 8 030 Current tax receivable 30 885 29 099 33 108 9 321 – 2 980 Other assets 165 488 112 559 98 767 122 215 95 373 96 288 Cash and cash equivalents 2 387 550 2 128 203 1 825 049 1 385 083 927 336 975 582 6 200 505 4 642 601 4 614 818 4 153 680 3 618 694 3 455 234
Equity and liabilities Equity Share capital 2 070 2 070 2 070 2 070 1 980 1 980 Share premium 525 709 525 709 525 709 525 709 435 799 435 799 Share-based payment reserve 16 126 12 310 4 286 6 207 – – Retained income 1 592 936 1 442 556 1 356 797 1 102 419 797 472 515 079 2 136 841 1 982 645 1 888 862 1 636 405 1 235 251 952 858 Liabilities Intergroup loans 149 550 122 504 292 706 419 612 619 548 863 036 Derivative financial liabilities 6 996 8 361 32 062 18 560 13 376 17 872 Deposits 2 830 773 2 141 298 2 123 953 1 780 330 1 360 381 1 178 110 Other liabilities 893 413 190 429 149 032 186 440 235 105 242 708 Deferred tax 182 450 196 882 127 762 112 133 112 461 103 150 Current tax – – – – 42 372 97 062 Defined benefit liability 482 482 441 200 200 438 4 063 664 2 659 956 2 725 956 2 517 275 2 383 443 2 502 376 Total equity and liabilities 6 200 505 4 642 601 4 614 818 4 153 680 3 618 694 3 455 234
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 2 Six-year review continued Statistics, returns and capital adequacy 2015 2014 2013 2012 2011 2010 Statistical review Statement of financial performance Net interest income to assets (%) 3,61 3,70 3,40 3,40 3,30 2,80 Non-interest income to assets (%) 12,46 14,90 15,20 19,00 20,10 12,30 Operating expenses to assets (%) 8,63 10,60 10,30 11,60 12,30 9,40 Interest income to interest-earning assets (%) 6,13 5,70 5,30 5,10 5,70 3,30 Interest expense to funding liabilities (%) 3,06 3,50 3,00 2,70 4,10 3,20 Cost to income (%) 60,46 59,60 57,50 53,40 54,00 69,60 Non-interest income to total income (%) 85,44 80,20 81,60 85,00 85,80 87,30 Credit loss ratio (%)* 0,02 0,40 0,60 0,10 0,30 0,30 Effective tax excluding indirect tax (%) 24,97 27,60 28,20 26,80 27,10 26,20 Effective tax including indirect tax (%) 28,83 31,30 31,30 28,80 29,10 31,00 Statement of financial position Return on assets (%) 4,27 5,40 5,60 7,60 5,90 3,60 Return on equity (%) 12,31 12,60 13,80 19,40 23,00 15,90 Loans and leased assets to deposits (%) 109,23 100,80 114,70 134,90 120,30 109,70 Regulatory capital to risk-weighted assets (%) 18,18 19,40 15,90 17,10 16,20 21,90 Financial leverage (times) 2,90 2,30 2,40 2,50 2,90 3,60 Net stable funding ratio (%)# 70,75 94,00 79,00 – – – Liquidity coverage ratio (%)# 104,00 117,00 123,00 – – – Statistical information Number of employees 1 109 1 022 1 049 1 113 1 058 997 Number of branches 85 95 92 94 90 88 Income per employee (R’000) 814 1 061 855 836 814 713 Expense per employee (R’000) 484 627 488 434 434 452 Profit before taxation per employee (R’000) 330 428 361 400 378 256 Market indicators Exchange rates at June 30 USD 12,17 10,63 10,00 8,19 6,79 7,67 GBP 19,09 18,18 15,23 12,86 10,87 11,48 EUR 13,54 14,55 13,06 10,39 9,82 9,39 Average exchange rates USD 11,45 10,38 8,86 7,74 7,01 7,59 GBP 18,01 16,90 13,88 12,27 11,14 12,03 EUR 13,72 14,09 11,47 10,38 9,55 10,57 Average prime overdraft rate (%) 9,25 8,70 8,52 9,00 9,30 10,38
* Reflected as a percentage of loans and advances only # Calculated based on the requirements of the regulations relating to banks as published and implemented with effect from January 1 2013
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 3 Highlights Bidvest Bank Limited Profit after tax achieved profit after R263 million tax of R263 million, an increase of 5%. +5%
Total assets R6,2 billion +35%
Total deposits R2,8 billion +32%
Regulatory capital to risk weighted assets 18%
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 4 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Six-year trend review
Profit before tax (R) Leased assets (R)
450 000 – 2 000 000 – 400 000 –
350 000 – 1 500 000 – 300 000 –
250 000 – 1 000 000 – 200 000 –
150 000 –
100 000 – 500 000 –
50 000 –
0 – 0 – 2015 2014 2013 2012 2011 2010 2015 2014 2013 2012 2011 2010
Advances (R) Cash and cash equivalents (R)
1 400 000 – 2 500 000 –
1 200 000 – 2 000 000 – 1 000 000 –
800 000 – 1 500 000 –
600 000 – 1 000 000 –
400 000 – 500 000 – 200 000 –
0 0 – 2015 2014 2013 2012 2011 2010 2015 2014 2013 2012 2011 2010
Deposits (R) CAR ratio (%)
3 000 000 – 25,0 –
2 500 000 – 20,0 –
2 000 000 – 15,0 – 1 500 000 – 10,0 – 1 000 000 –
5,0 – 500 000 –
0 – 0,0 – 2015 2014 2013 2012 2011 2010 2015 2014 2013 2012 2011 2010
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 5 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015 Chairman’s report
Nigel Payne| Chairman “Our balance sheet is strong, so is cash generation, giving us the capacity to pursue further strategic initiatives to complement continued organic growth. ”
On behalf of the Board, I am privileged to report to our an integral part of banking. We take these very seriously at shareholder, our people, customers, business partners and Bidvest Bank, and view all our actions from the perspective of all our other stakeholders that Bidvest Bank is in good shape, a fair deal for our customers. If there is anyone who believes having made significant progress on a number of strategic we have not lived up to this high standard, I invite you to initiatives during the year, and with the prospect of more contact me personally and in confidence. to follow. We are grateful to our shareholder for its ongoing support, and to our regulator for an appropriately robust but Our governance report details various aspects of the arm’s-length relationship. performance of the Board, all of which I believe were appropriately executed. The Board comprises largely of We have an excellent executive team in place, a clearly independent non-executives, with an appropriate mix of defined strategy, are deploying the capital and other skills and experience. Board meetings are characterised by resources required in order to get there, and are approaching robust discussion and effective decision-making. I thank my the future with confidence. We are not entirely satisfied with fellow Board members for their wise counsel and ongoing our financial performance, but have taken the actions required commitment, express our gratitude to Peter Nyman who to improve thereon. recently retired from the Board after a number of years, and welcome Alastair Cunningham to the Board and a number of The Consolidated Annual Report contains a wealth of board committees. information about our governance, material issues and CSI initiatives. Risk taking and mitigation, as well as compliance with an increasing range of regulations, are
Nigel Payne Chairman
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 6 Managing Director’s executive overview
Japie van Niekerk | Managing Director “The business will continue to focus on growth through our alliance and partnership strategy as well as through organic growth.”
The business had a reasonable performance in a very tough Prospects for the year ahead look healthy with a good pipeline market. Profit before tax grew by 2,2% on the prior year. of new business in the Fleet and Lending business and good Management was able to reduce the expected negative traction on the new initiatives front. The business will continue impact of the Transnet fleet reduction to a reasonable extent. to focus on growth through our alliance and partnership Foreign exchange margins remained under pressure. strategy as well as through organic growth. Costs remain a focus area but we will continue to invest in new growth The balance sheet showed good growth, both on the deposits initiatives that bring diversified earnings streams and top- and lending side, and we started taking on a significant new line growth. client in the Fleet business before the end of the year. These numbers are reflected in the balance sheet at year-end.
JJ van Niekerk Managing Director
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 7 Governance report
Our focus areas: ➤ Ensuring compliance with regulations and responsible banking practices in the Bank; ➤ Focus on the information technology strategies of the Bank to harness competitive advancements in technology; ➤ Diversification of revenue streams and broadening of the customer base; ➤ Mobilising liquidity and capital to enhance return on assets; ➤ Continued focus to reduce crime losses; ➤ Attracting and retaining senior historically disadvantaged individuals; ➤ Improved efficiency, productivity and the elimination of expense waste; ➤ Succession planning; and ➤ Challenging trading conditions and the impact of the worldwide recession on the South African economy.
Statistical information
Year ended Year ended June 30 2015 June 30 2014 Operating income (R’000) 897 553 862 603 Profit before direct taxation (R’000) 354 357 346 549 BEE procurement (R’000) 1 062 461 861 532 Training spend (R’000) 14 487 13 720 Training spend per employee (Rand) 13 388 13 464 Number of employees trained 1 109 1 022
1. Corporate governance of all stakeholders. The achievement of these objectives 1.1 Introduction is dependent on the adherence to good corporate The Bank is indirectly a wholly owned subsidiary of The governance throughout the organisation. Bidvest Group Limited. The Bank is committed to: ➤ The diversification of revenue streams without losing The requirements of the Companies Act for assessment focus on its core product offerings, being fleet and of the Bank’s adherence to legislation and codes of good asset finance and foreign exchange; practice in the areas of good corporate citizenship, social ➤ The retention and growth of its customer base; and economic development, and the environment, labour ➤ The management of the risks associated with banking; and consumer relations are the responsibility of the ➤ The fulfilment of its environmental, health, safety and Corporate Governance Committee, which functions as socio-economic obligations; and the Bank’s Social and Ethics committee. ➤ The development of employee skills to meet financial services industry standards. King III The guidelines set out in King III, embodying international 1.2 Corporate governance, King III, values and ethics best practice, are endorsed by the Board. Corporate governance The Board of Directors (the Board) recognises the Values and ethics importance of the principles of good corporate The Bank is committed to the conduct of its business governance, and conducts itself in accordance with the in accordance with the highest ethical standards, as Bank’s statutes, the Banks Act, the Companies Act, the expressed in its Code of Ethics, and to responsibility, King Report and Code on Corporate Governance for accountability, fairness and transparency. Bank South Africa (King III) and its own code of conduct. employees are required to acknowledge and accept the Code of Ethics, at induction, and also on an annual basis. The Board endorses the Bank’s Code of Ethics, and its The Bank participates in an anonymous, independently commitment to integrity, confidentiality, compliance with operated hotline for the reporting of illegal, fraudulent all applicable legislation, and employment equity. and unethical conduct: all reports are investigated, and action is taken where necessary. The Board’s objectives are the development and sustainable growth of the Bank’s business in accordance Directors and employees are required to declare their with applicable regulatory requirements, for the benefit personal interests in accordance with the Companies Act and Code of Ethics.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 8 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
2. The Board of Directors Board composition (%) The Board approves Bank strategy as proposed by I management, and management is responsible for the alignment of the strategy with the approved risk 25% appetite, its implementation and the assessment of its effectiveness. ¤ Executive ¤ Non-executive 50% 2.1 Board composition ¤ Independent At June 30 2015, the Board was composed of two non-executive executive and six non-executive directors, the majority of whom are independent non-executives. The chairman is an independent non-executive, and the roles of the chairman 25% and chief executive are separate. Board composition aims to ensure unfettered decision-making without domination by any group or individual. The varied experience and expertise of the directors contributes to the Board’s effectiveness and its achievement of its responsibilities. The Board met seven times during the year.
2.2 Board committees The following Bidvest Bank Holdings Limited committees continue to review the activities of the Bank in accordance with such committees’ terms of reference. The committees are: ➤ Audit Committee; ➤ Risk and Capital Management Committee; ➤ Corporate Governance and Social and Ethics Committee; ➤ Credit Committee; ➤ ALCO Committee; ➤ Remuneration Committee; and ➤ Nomination Committee.
Risk and Audit Capital
Corporate Governance Social and Ethics
Credit Board Committees
ALCO
Remuneration Nomination
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 9 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued
2.3 Meeting attendance Details of the attendance by directors at Board and Board sub-committee meetings are set out in the schedule below: Corporate SARB Governance trilateral Risk and including and Capital Social Remune- directors’ Board Audit Management and Ethics Credit ALCO ration meeting Number of meetings 7 4 4 2 13 12 2 1 PC Baloyi@* 5 3 2i – – – – 1 AD Cunningham@* 1i 1i 1i – 2 2 – – Appointed 1 June 2015 EK Diack@* 5 4 4 – – – – 1 (Chairman) (Chairman) B Joffe* 3 – – – – – – – MJ Liebenberg# 7 4i 4i 2i 13 11 2i 1 RD Mokate@* 5 – – 2 – – 2 – (Chairman) P Nyman* 6 4 4 2 3 (of 4)^ 3 (of 4)^ 2 1 NG Payne 7 4i 4 2 – – 2 1 (Chairman) (Chairman) JJ Van Niekerk# 7 4i 4i 2i 13 11 2i 1
* Non-executive director @ Independent # Executive director i Attendance by invitation ^ Four quarterly meetings were held in addition to management meetings
2.4 Bidvest Bank committee composition and terms of future, formal monthly meetings will be chaired by reference the non-executive director (Mr Cunningham) and The following committees continue to review the activities weekly management meetings will be held. The of the Bank in accordance with such committees’ terms weekly meetings focus on credit approvals and are of reference: chaired by an executive director. The Committee’s role is the effective management of credit risk within the The Audit Committee is composed of three non- mandate set out in the credit risk management policy. executive directors, Messrs Diack (chairman), Baloyi and Nyman. The function of the Committee is, inter alia, The Risk and Capital Management Committee is to monitor the financial, operational and management composed of three non-executive directors, Messrs, reporting processes, and to evaluate the adequacy and Diack (chairman), Nyman and Payne. The Committee’s effectiveness of internal controls, accounting practices function is principally to review and monitor the risk and processes, and information systems. The Committee management strategy and policy, and to co-ordinate reviews the work of internal audit, and the head: risk and capital management assurance activities. The internal audit has unrestricted access to the Committee. Committee reviews the work of compliance, and the Representatives of the external auditors, Deloitte & compliance officer and head: risk have unrestricted Touche, attend all Committee meetings. The Board is access to the Committee, its chairman and the Bank satisfied that the Committee has met its responsibilities chairman. A representative of Bidvest Group internal under its terms of reference. The Committee has one audit attends meetings by invitation. The Committee has sub-committee: one sub-committee:
➤ The Credit Committee is chaired by a non-executive ➤ The Asset and Liability Committee (ALCO) is chaired director, and is composed of the executive directors by a non-executive director, and is composed of the and the heads: Transactional Banking, Lending and executive directors, and the heads: Transactional Leasing, and Credit. Meetings of the Committee Banking, Risk, and the chief dealer. The Committee’s were chaired quarterly by the non-executive director function is the optimum management of the Bank’s (Mr Nyman), and in addition monthly and weekly assets, liabilities and commitments in accordance with management meetings were held. Growth in the Board mandates and limits: this includes liquidity and Bank’s lending business has necessitated that in cash flow management, and maintaining a strong and
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 10 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued sound balance sheet. Meetings have a strong focus During this period he will relinquish his membership of on strategic matters as well as operational asset and Board committees as his successor on those committees liability management matters. Quarterly meetings of is appointed. the Committee were chaired by the non-executive director (Mr Nyman). In future the Committee will meet Mr AD Cunningham was appointed a director of the Bank monthly under the chairmanship of the non-executive and of Bank Holdings with effect from June 1 2015, and director (Mr Cunningham), and weekly under the has succeeded Mr Nyman as chairman of the ALCO and chairmanship of an executive director. Credit Committee, and will be appointed to the Audit and Risk and Capital Management Committees. The Corporate Governance, Social and Ethics and Nominations Committee is composed of three non- 2.6 Director induction, training and development programmes executive directors, Messrs Nyman and Payne, and New directors receive an induction pack, an introduction Dr Mokate, and chaired by the Board Chairman. The to the business through branch and department visits Committee’s purpose is to assist the Board to maintain and interviews with senior management. Ongoing director and enhance the process of corporate governance training is provided, including materials on legislative and in the Bank, including the delegation of authority to regulatory changes applicable to the Bank’s operations, committees and senior management. The Committee and on topical banking and financial matters. considers for implementation in the Bank appropriate Bidvest Group corporate governance policies and 2.7 Directors’ independence and performance processes. The Committee also undertakes the The King III definition of director independence is functions of the Nominations Committees, including adhered to. the appointment, induction and training of directors, and succession planning of the Board and senior The directors regularly assess the effectiveness of the management. The nominations policy guides the Board, Board sub-committees, their chairmen and the Committee in its identification and nomination of Managing Director. The results of the assessments are candidates to the Board and to senior management presented to the Corporate Governance and Social and positions. In addition, the Committee undertakes the Ethics Committee. Individual director appraisal is the responsibilities of a social and ethics committee, as responsibility of the Board Chairman. prescribed by the Companies Act, 2008. The directors are aware of the standard of directors’ The Remuneration Committee is composed of three conduct required in terms of the Companies Act, 2008 non-executive directors, Messrs Payne and Nyman, and and the Banks Act. Dr Mokate, who is the chairman. The Committee oversees the development of remuneration guidelines, reviews Interests of directors and officers incentive schemes and bonus allocations for senior Directors and officers are required to comply with the management, approves employee salary increases and Code of Ethics and section 75 of the Companies Act, the remuneration of non-executive directors. 2008, in respect of the avoidance of any conflict of interest between their personal interest and those of the The Executive Committee is chaired by the Managing Bank. Declarations of interest are made at every Board Director and is composed of the Financial Director, and meeting, and any transaction with a director is required the heads of the Bank’s major divisions, namely Fleet to be entered into in the normal course of business, and Asset Finance, Transactional Banking, Products under terms that are no more favourable than those and Alliances, and the heads of Information Technology, with third parties. Human Capital and Marketing. The Committee meets monthly, and its focus is strategic. 2.8 Related parties The Bank is conscious of the importance of identifying, The Management Committee meets quarterly and is managing and disclosing dealings with related parties, composed of the heads of business units and support and of the need for transparency. The Bank’s conflicts areas. Its focus is operational. of interest policy regulates the manner in which dealings with related parties should be conducted, to ensure that In addition to the aforementioned committees, internal potential conflicts of interest are avoided, and all related audit, the risk and compliance functions and the forensic party transactions are fully disclosed. investigations and security department address corporate governance in the Bank. 3. Risk management The Board has overall responsibility for the establishment 2.5 Board appointments and succession planning and oversight of the Bank’s risk management framework. Mr Nyman turned 70 in March 2015, and his appointment The Board sub-committees are responsible for as director has been extended by the Board for one year. developing and monitoring the Bank’s risk management
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 11 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued policies in their specified areas. All Board sub- this regulatory environment, the Bank is required to committees report regularly to the Board on their hold adequate capital against its assets to safeguard activities. its solvency and overall economic stability. The Bank maintains a strong relationship with the Bank Supervision The Bank’s risk management policies are established Department of the South African Reserve Bank, and to identify and analyse the risks faced by the Bank, to communication and transparency are regarded as key set appropriate risk limits and controls, and to monitor factors in this relationship. risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in strategy, The objectives of the main regulators, being the products and services offered. The Bank, through its Financial Services Board (FSB) and the South African training and management standards and procedures, Reserve Bank (SARB), are considered in the preparation aims to maintain a disciplined and constructive control of policies, operating procedures and in system environment, in which all employees understand their development. These objectives are: roles and obligations. ➤ Financial stability; ➤ Appropriate market conduct and treating customers The Board is satisfied that the risk management system fairly; and process for identifying, evaluating and managing ➤ Combating of financial crime; and significant risks is effective, and operated throughout the ➤ Financial inclusion. period of this report, providing reasonable assurance. The Board is further satisfied that the processes will Basel III requires banks to hold adequate, high-quality identify and enable it to take adequate action against capital. It also introduces leverage and liquidity standards any material undue, unexpected or unusual risks. In the to strengthen regulation to improve the banking sector’s period under review, no such risks were identified. ability to absorb shocks arising from financial and economic stress. Basel III requires banks to comply with A documented and regularly tested business continuity the new Liquidity Coverage Ratio of 60% by January plan exists to ensure continuity of business-critical 2015 with annual increases to comply with the 100% ratio activities. by 2019, and the Net Stable Funding Ratio by January 2018. The Bank views these new requirements as an 4. Compliance improvement in the financial regulatory environment as Compliance functions independently of operations and they will promote a more resilient banking sector. enjoys the support and co-operation of the Board and executive management. The Bank continuously strives to improve its regulatory processes and regulatory awareness by ensuring Processes supporting generally accepted compliance ongoing upgrading and improvement of the Bank’s practice (GACP) are mature and risk management internal governance structures, risk management methodology is used to prioritise the meeting of high-risk systems, business models, capital strategies and regulatory requirements. disclosure standards through compliance with the Basel frameworks and all other applicable laws, regulations Continuous compliance monitoring is conducted and codes. to assess the levels of compliance with regulatory requirements specific to banking, and also to meet the Bidvest Bank is well capitalised and liquid, and will requirements of Regulation 43 of the Companies Act, comply with the new requirements. 2008 in relation to the Social and Ethics Committee. 4.2 Compliance governance The compliance officer reports directly to the Risk and Management is responsible for ensuring compliance Capital Management Committee and corresponds with by all employees. A Compliance Manual describing the regulators for the financial services industry, including regulatory requirements, together with internal policies, the South African Reserve Bank (SARB) and the Financial procedures and rules, is available on the Bank’s intranet, Services Board (FSB). and encourages adherence by staff. All staff members are required to acknowledge and sign the Bank’s Code The new product approval process to encourage of Ethics on an annual basis. Online awareness training appropriate regulatory risk assessments at the earliest modules are prescribed for all staff, and classroom stage of a new product proposal has been implemented. training is compulsory for legislation which has a significant impact on specific areas of the Bank. 4.1 Regulatory compliance The Bank is governed by the Banks Act,1990 and 4.3 Key compliance focus areas the regulations relating to banks, which are based on All departmental regulatory risk profiles are amalgamated the requirements of the Basel III framework. Within into a bank-wide regulatory risk profile. This indicates the
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 12 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued following key areas of focus for compliance: of the Code of Ethics was approved by the Board on ➤ Anti-money laundering (AML) and combating of May 26 2015. A programme to raise awareness of the terrorist financing; requirements of the Code will be launched. ➤ Exchange control rulings and regulations; ➤ Financial stability; 5. Forensic investigations and security department ➤ Payment systems; and 5.1 Anti-money laundering ➤ Market conduct and treating customers fairly. The Bank’s control measures are aimed at facilitating the detection and investigation of money laundering. These 4.4 Regulatory developments measures include a risk-based approach to customer Bidvest Bank has been involved in the initiatives to meet identification, enhanced due diligence and the treatment South Africa’s Foreign Account Tax Compliance Act of politically exposed persons (PEPs). (FATCA) obligations and met the testing phase conducted during December 2014. FATCA reporting will commence Branch visits are conducted to ensure that employees in 2015. comply with the Financial Intelligence Centre Act and other regulatory provisions. Bank systems enable The Protection of Personal Information Act, 4 of 2013 compliance by business units with cash threshold was introduced to promote the protection of personal reporting (CTR) and suspicious transaction reporting information processed by public and private institutions. (STR) obligations: 74 585 STRs were submitted to Bidvest Bank is currently in the process of introducing the Financial Intelligence Centre (FIC) with a value of measures to meet these obligations by the required R1 235 million, and 1 057 section 27 requests from the effective date. FIC were handled during the year.
4.5 Market conduct and treating customers fairly market Ongoing employee training and workshops on the conduct requirements of applicable legislation are conducted, The Bank’s Market Conduct Policy was approved by the and the department compliance and internal audit Board in November 2014. conducts inspections to assess the level of compliance. The Bank launched an online AML training programme Treating customers fairly and employees are trained in AML typologies, and Treating customers fairly (TCF) is an outcomes-based enhanced due diligence exercises on the Bank’s regulatory and supervisory approach designed to ensure customer base. The training extended to the Executive that specific, clearly articulated fairness outcomes for and Management Committees. financial services consumers are delivered by regulated financial institutions. Such institutions are required to The Bank continuously strives to improve its AML demonstrate that they deliver the six TCF outcomes regulatory processes and regulatory awareness by to their customers throughout the product life cycle, ensuring ongoing upgrading and improvement of from product design and promotion, through advice the Bank’s internal governance structures and risk and servicing, to complaints and claims handling, and management systems. The Bank maintains strong throughout the product value chain. relationships with the regulators, and communication and transparency are regarded as key factors in these The Bank embarked on the TCF journey in 2012. Various relationships. workgroups were created to address and discuss the TCF aspects of each of the outcomes. Some of the Anti-money laundering controls also received heightened Bank’s TCF milestones are: attention this year. Among the measures, the Bank: ➤ Staff awareness of the outcomes was created using ➤ Implemented a new automated system for customer posters which are displayed throughout the Bank; profile and transactional monitoring; ➤ A new product approval process had been ➤ Enhanced its processes for new customer on- implemented to ensure updated products and new boarding, including enhancements to the Bank’s data products; warehouse, improving its single customer view; ➤ A new business performance department has been ➤ Reviewed its processes for compliance with created to address post launch analysis and to legislation, as well as effectiveness and efficiency; determine the success of the product; and ➤ Implemented enhanced controls over sanction ➤ Complaints are analysed for particular trends and the screening; Bank maintains statistics. ➤ Improved identification controls for politically exposed persons and companies; 4.6 Social and ethics ➤ Enhanced processes and controls over alliance The Committee received no reports of failure to partners; and comply with the social end ethics matters specified in ➤ Increased resources and accountability in this Regulation 43 to the Companies Act, 2008. Version 4 area, and regulatory compliance is a component of performance management and employee reward.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 13 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued The Board endorses the Bank’s commitment to through Independent Counselling and Advisory Services compliance with all applicable legislation. Organisation (ICAS) to employees and their immediate families to assist them to deal with personal problems 6. Information technology impacting on their personal and work lives. In addition, The Bank continues to make substantial investments in the Bank subscribes to online health and wellness information technology in the form of technical skills, programmes for employees and their families. infrastructure and systems. Disaster recovery was further enhanced and successfully tested during the year. 7.4 Talent management The Bank is committed to employee development 7. Employee relations and retention. At the end of June 2015, the Bank Management is responsible for the implementation had 1 109 employees, and its employee turnover rate of the Board’s decisions and for the sustainable (resignations, retrenchments, dismissals and death) development and growth of the business. The Board was 22,1% (2014: 25,07%). The resignation rate was monitors management’s performance and is satisfied that 14,5% (2014: 12,54%). succession plans for senior management are in place. 7.5 Health and safety 7.1 Remuneration The Bank complies with the health and safety Remuneration of employees is based on regular requirements of the Occupational Health and Safety performance reviews and is informed by industry Act. Health and Safety Committees have been set up guidelines and prevailing market conditions, to reward in all three major regions and are functional. Quarterly and retain superior quality employees, and motivate them meetings are held and minutes thereof are kept for to equip the Bank to achieve sustained growth. Executive record purposes and compliance. Five incidents were directors’ employment contracts do not contain unusual reported during the year under review. leave or other benefit provisions, and are terminable on reasonable notice. Director and senior management 7.6 Illness and HIV/Aids remuneration is approved by the Remuneration During the year, two Wellness Days were held Committee. The Bank does not offer a share incentive nationally, at which various health assessments were scheme but executives participate in the share incentive conducted. Employee response was good in all regions. scheme of The Bidvest Group Limited. 163 employees completed VCT testing during the year, comprising 15% of the staff complement, and of those 7.2 Staff development and retention tested, one employee tested positive for HIV. Affected Training and development is ongoing at all levels from employees are eligible for assistance from the Bank’s senior managers to junior consultants. Among other employee support programme, ICAS. accredited courses, the Certificate in Banking (NQF levels 4 and 5) and the Certificate in Management 7.7 Environment Development (for employees with the potential to advance The Bank is conscious of its environmental to junior and middle management roles) are offered. The responsibilities. While the business has a fairly low direct Bank has implemented an online training platform, which impact, we are working towards paperless administrative has been used for an AML refresher course for all staff, systems as we develop new products in our niche and a variety of online courses are planned. markets. The Bank makes use of recycling initiatives to ensure that its waste paper is disposed of in an A modular business development sales programme has environmentally acceptable manner. been developed. It comprises nine modules covering products, compliance and soft skills, and runs for a two 8. Transformation to three-month period. 38 employees have completed The Bank achieved a level 2 contributor B-BBEE rating the course. from Empowerdex Verification Agency in May 2015. The rating expires on May 13 2016. The Bank is committed to developing employees for their and the Bank’s benefit. 8.1 Enterprise development The Bank spent R89 million (2014: R36 million) on 7.3 Employee wellbeing enterprise development during the year. The Bank provides a 24-hour confidential support service 8.2 Preferential procurement The Bank’s Broad-Based Black Economic Empowerment spend amounted to R1,1 billion (2014: R 0,9 billion).
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 14 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Governance report continued
8.3 Skills development The Bank has been accredited as a service provider 9. Direct exchanges with government for assessment and delivery by the Banking Sector Year ended Year ended Education and Training Authority (BANKSETA) for the June 30 2015 June 30 2014 National Certificate: Banking (NQF Level 5). There are currently 32 employees enrolled on the course. Employees’ tax 49 156 45 455 BANKSETA has approved funding of R900 000 payable Value added tax 69 244 90 788 in three tranches Rates and taxes 2 863 2 717 8.4 Learnerships Skills development A total of 36 (2014: 49) learners from previously levies 2 649 2 437 disadvantaged communities participated in the Bank’s Unemployment learnership programme during the year. BANKSETA insurance fund 2 779 2 658 approved funding of R1 225 000 payable in three tranches. Total spend on learnerships was R2 million Workmen’s (2014: R1,5 million). compensation 196 156 Income taxation 8.5 Bursaries received – (63 526) Bursaries totalling R1,1 million (2014: R894 000) were Income taxation paid 106 396 77 821 granted to permanent employees during the year. 233 283 158 506 8.6 Employment equity The employment equity report is submitted to the 10. Moody’s Investors Service Department of Labour annually by October. The Bank Moody’s rating of A3.za/P.2.za was confirmed unchanged complies with employment equity regulations. on March 24 2015.
The Bank has good black representation across middle 11. Conclusion and junior management levels, providing a pool of The directors are committed to the promotion of sound advancement candidates. risk management in the conduct of the Bank’s activities. The ultimate responsibility for the management of risk lies Demographic breakdown of staff complement: with the Board, which is assisted by the Risk and Capital Composition Composition Management Committee in the identification of risks Number of Percentage inherent in the business and the monitoring of controls to employees of employees manage those risks. Day-to-day risk management is the responsibility of line managers, with oversight, monitoring Black males 220 19,8% and assessment of the effectiveness of controls and Black females 481 43,4% mitigations provided by the risk management department, White males 190 17,1% compliance, and the following structures: ➤ Risk and Capital Management Committee; White females 218 19,7% ➤ Asset and Liability Committee; Total 1 109 100% ➤ Credit and Risk Committee; ➤ Operational Risk Committee; and ➤ Exco Risk Committee. 8.7 Social economic development The Bank acknowledges its place in the community and The Board is satisfied that the structures and processes every year the Bank donates funds to worthy causes. The listed adequately and appropriately address the Bank’s Bank spent R4.7 million (2014: R4.4 million) in the current risk management, and its corporate governance year on social economic development. In addition, obligations. employees perform charity work in their own time.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 15 Integrated operational review Bidvest Bank Limited, holder of a full banking licence since 2000, is South Africa’s leading foreign exchange specialist, serving retail and corporate customers via 85 branches nationwide. Foreign exchange and global payment expertise is complemented by deposit-taking, loans and fleet and asset finance. The Bank provides the country’s widest range of foreign bank notes and the biggest selection of prepaid foreign currency cards. The bank is South Africa’s third-largest vehicle leasing business.
In a highly competitive market, Bidvest Bank Limited put in a satisfactory performance, achieving profit before tax of R354,4 million (2014: R346,5 million). Revenue was up 4,7% at R897,5 million (2014: R862,6 million). The division remains strongly capitalised and highly cash generative.
Highlights ➤➤ Profit before tax up by 2,3% to R354,4 million (2014: R346,5 million) ➤➤ Operating income moved 4,05% higher to R897,5 million (2014: R862,6 million) ➤➤ Continued growth was achieved in fleet and asset finance, and product and alliance banking ➤➤ Solid cash generation saw cash and cash equivalents rise 12,2% to R2,4 billion (2014: R2,1 billion) ➤➤ At R2,8 billion, deposits were up 32,2% (2014: R2,1 billion) ➤➤ Credit quality remained good, with low impairment provisions ➤➤ Increased brand and product awareness was achieved ➤➤ New and enhanced products were launched ➤➤ Moody’s reaffirmed the Bank’s rating as A3.za/P-2.za with a stable outlook ➤➤ Progress was evident with the evolving strategy of securing new partners as a means of accelerating the Bank’s penetration of new niche markets.
Material issues
Why it is important and Material issue strategic objectives KPIs and targets Performance against targets and actions going forward
Why: Revenue Performance: Financial markets are highly diversification. Operating income moved 4,05% higher to R897,5 million competitive and can be (2014: R862,6 million). Cost-to-income volatile. It is important to Maintain ratio 60,46% Costs were 8,8% up on the prior year, largely due to create a broad range of robust consistent (2014:59,60%). increased employment costs. Recruitment of quality people income streams to secure a financial was stepped up in 2015 and overall staff numbers rose strong base of business. performance from 1 022 to 1 109 (8,5% up). Objective: As a result, profit before tax was up by 2,3% to To maintain profitability. R354,4 million (2014: R346,5 million).
Actions: Diversification of revenue streams through enhanced and expanded product offerings and alliances with new and existing partners.
Why: KPIs: Actions: It is important to demonstrate JSE SRI Compliance, risk and forensics teams have been our commitment, as good performance strengthened. Exceed corporate citizenship standards. Anti-money laundering controls also received heightened corporate credentials are essential CDP performance attention this year. Among the measures, the Bank: citizenship in an industry where standards. • implemented an automated system for customer profile expectations ethical standards must and transactional monitoring; be unimpeachable. Good Governance • enhanced its processes for new customer on-boarding; corporate citizens attract standards • reviewed its processes for compliance with legislation, as good customers and good (King III). well as effectiveness and efficiency; employees. Reputation is • implemented enhanced controls over sanction screening; a source of competitive • improved identification controls for politically exposed advantage. persons and companies; and Objective: • enhanced processes and controls for alliance partners. To keep pace with new regulations. Compliance monitoring and implementation to ensure banking businesses do not contravene regulations.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 16 Integrated operational review continued
Why it is important and Material issue strategic objectives KPIs and targets Performance against targets and actions going forward Why: KPIs: Performance: Promote employee health and satisfaction People have a right to be Resignation rates. The resignation rate was 14,5% (2014: 12,5%). The Bank is healthy and happy. A healthy committed to employee development and retention. Absentee rates. Enhance talent attraction andworkplace retention is a productive Promote Absentee rates, after a low of 0,9% in 2012, have increased workplace. employee health slightly to 1,5% in 2013, and 1,6% in 2014. In 2015, the
and satisfactionPromote skills developement Promote employee healthTo and improve satisfaction talent attraction absentee rate was 1,5%, in line with our targeted market and retention and to have benchmark for absenteeism. the required skills in the Invest in Socio Economic developement Enhance talent attraction andorganisation. retention Actions: Remuneration of employees is based on regular Objective: performance reviews and is informed by industry Enhance Promotetalent skills developement attraction andFinancial regulators (SARBTo and theuse Financial innovative Services Board) approaches guidelines and prevailing market conditions, rewarding retention to improving the health and and retaining superior quality employees and motivating
Invest in Socio Economic developementwellbeing of all employees. them to equip the Bank to achieve sustained growth. Focus Industry representattive organisations has also been placed on exit interviews to identify clearly stipulated reasons for resignations.
PartnersFinancial and regulators potential (SARBpartners and the Financial Services Board) The Bank provides a 24-hour confidential support service through ICAS (Independent Counselling and Advisory
Industry representattive organisations Services Organisation) to employees and their immediate families to help them deal with personal problems Communities impacting their personal and work lives.
Partners and potential partners In addition, the Bank subscribes to online health and wellness programmes for employees and their families. During the year, wellness days were held nationally, at
Communities which various health assessments were conducted.
Promote employee health and satisfaction Employee response was good in all regions. Altogether 163 employees completed VCT testing during the year, comprising 15% of the staff complement, and of those Enhance talent attraction and retention tested, one employee tested positive for HIV.
Why: KPIs: Performance: Promote skills developementSkills enable service Training spend Average annual training spend per employee decreased excellence and innovation per employee. slightly from R13 464 in 2014 to R13 388 in 2015, with a – key drivers of sustained focus on improved in-house and on-the-job training and Promote skillsInvest in Socio Economic developement Training hours per growth. less external training. development employee. Personal development Average annual training hours per employee decreased
Financial regulators (SARBopportunities and the Financial Services Board) assist in talent from 85 hours in 2014 to 45 hours in 2015, though all staff retention. were trained during the year.
Industry representattive organisations
Partners and potential partners
Communities
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 17 Integrated operational review continued Promote employee health and satisfaction
Material issuesEnhance talent attraction continued and retention Why it is important and Material issuePromote skills developementstrategic objectives KPIs and targets Performance against targets and actions going forward
Why: KPIs: Performance: Invest in Socio Economic developementThis is important at national CSI spend. CSI spend increased from R 4,4 million in 2014 to and regional level. R4,7 million in 2015. CSI spend as % Invest in socio- Financial regulators (SARBSustained and the Financial Services growthBoard) can only be of net profit after CSI spend as % of net profit after tax remained constant at economic achieved in well-resourced tax. 1,8%. development communities. Industry representattive organisations Targets: Our contributions continue to exceed our annual targeted 1% of net profit 1% of net profit after tax, and the business continues to after tax. focus on its sustainable involvement and interaction with
Partners and potential partners disadvantaged communities.
Our focus areas are: Education By assisting in the education of disadvantaged Communities communities we believe we can contribute to the development of our future clients and employees. Conservation By investing in the preservation of our environment and wildlife we can help to establish South Africa as a superior and global eco-tourism destination. Growth in the tourism industry will play a major role in reducing unemployment and stimulating economic recovery. Crime prevention Our country suffers from alarming rates of crime, undermining efforts to attract foreign investment. This inability to attract foreign investment impedes the national effort to curb exceedingly high unemployment. Children Children are our future employees. We contribute towards their development in order to increase the potential of our future workforce. Charity organisations Charity collections include: On spring day casual wear is worn for a donation which is then given to the Association for the Physically Disabled. On World AIDS Awareness Day there is a sale of Red Ribbons in support of Friends for Life.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 18 Integrated operational review continued
Material issues continued Why it is important and Material issue strategic objectives KPIs and targets Performance against targets and actions going forward
Why: KPIs: Performance: Reducing environmental Paper purchased. Paper purchased reduced from 49 999kg in 2014 to 39 686 impacts and waste is not only kg in 2015. Electricity used. good for society but also for Reduce Electricity usage decreased from 5 524 788 kilowatt hours business efficiency. Gasoline (petrol) environmental to 5 275 508 kilowatt hours. used. impacts Society’s response to climate Gasoline usage fell from 167 556 litres to 149 729 litres. change may have a significant impact on the vehicle rental industry.
Objective: To contribute by reducing our impact, educating employees, and working with suppliers and offering customer solutions to help them reduce theirs.
Stakeholder engagement Objective and engagement method Key issues Stakeholders (and frequency) identified Key actions taken and planned Objective: Key issues: Salary structures have been benchmarked against the Improve employee Remuneration and market, and adjusted where necessary. relationship and benefits, being Focus has been placed on engaging our employees. Employees (full satisfaction. informed about time and contract) corporate strategy, Employees have been informed on the corporate strategy. Methods: employee skills Employee surveys development, Focus has been placed on robust employee exit interviews, (annual). employee wellness, with clearly stipulated reasons for resignations. Anonymous feedback local economic development, Promote employee healthforms and satisfaction (ongoing). specific employer/ Newsletters. employee
Enhance talent attraction and retention relationship issues. Issues considered Promote skills developement material: Employee wellness, skills development Invest in Socio Economic developement and retention. Objective: Key issue: Corporate governance Enhance reputation for Compliance The Board of Directors (the Board) recognises the Financial regulators (SARB and the Financial Services Board) probity and fair dealing. with regulatory importance of the principles of good corporate governance, Financial requirements. and conducts itself in accordance with its statutes, the Industry representattive organisationsCompliance with regulators (SARB Banks Act, the Companies Act, the King Report and Code on all regulations and and the Financial Corporate Governance for South Africa (King III) and its own responsible banking Services Board) code of conduct. Partners and potential partnerspractices. The compliance, risk and forensics teams have been Methods: strengthened. Robust governance structures. Internal audit acts as an independent appraisal function. Communities
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 19 Promote employee health and satisfaction
IntegratedEnhance talent attraction and retention operational review continued Promote skills developement
Material issuesInvest in Socio Economic continued developement Objective and engagement method Key issues StakeholdersFinancial regulators (SARB and(and the Financial frequency) Services Board) identified Key actions taken and planned Objective: Key issues: Actions: Industry representattive organisationsStay abreast of industry Regulatory change Continued interaction with financial services representative developments and any and heightened organisations. Industry planned changes to the regulatory scrutiny representativePartners and potential partnerspolicy environment. may affect the organisations manner in which our products and services will Communities be produced or delivered. Objective: Key issues: The procurement process and control environment is well Maintain good Good governance designed and adequate to address risks. relationships and explore over procurement Related-party transactions and potential conflicts of interest Suppliers efficiencies. processes and are monitored regularly and formally on a quarterly basis. functions. Methods: A robust “know your supplier” process ensures that Know your supplier. Good governance procurement meets the Bank’s objectives. over related-party transactions and Internal audit reviews the procurement processes regularly. potential conflicts of interest. A robust “know your supplier” process in place. Objective: Key issues: New external alliances have been established, including Bidvest Bank aspires Developing for complex formal emigration applications, with a range to be a specialist a common of account options, payment methods and safe custody Promote employee health and satisfaction Customers financial services understanding of services. partner that provides customers/offerings New travel solutions have been implemented by integrating Enhance talent attraction andefficient retention solutions to and defining with travel partners’ processes and developing a common business and consumers points of customer understanding of customers/offerings and defining points of internationally. interaction. Promote skills developement customer interaction. Methods: Competitive payment solutions have been developed, Maintain good relations. Invest in Socio Economic developement including foreign exchange on-line ordering with delivery to Understand issues, our customers’ doors. resolve them together Trade solutions have been developed during the period, Financial regulators (SARBand and the Financial examine Services Board) including a new structured trade finance offering. opportunities for
Industry representattive organisationsneeds-driven product Continued focus on the information technology strategies of innovation. the Bank to harness competitive advances in technology. Objective: Key issues: Several external alliances have been established and new
Partners and potential partnersDiversify the business Early identification travel solutions implemented. base and accelerate the of areas of future penetration of new niche growth and Partners and markets. development of potential partners Communities new solutions that complement current products and services.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 20 Promote employee health and satisfaction
Enhance talent attraction and retention
Promote skills developement
Invest in Socio Economic developement Integrated operational review continued Financial regulators (SARB and the Financial Services Board)
Industry representattive organisations Stakeholder engagement continued Objective and Partners and potential partnersengagement method Key issues Stakeholders (and frequency) identified Key actions taken and planned Objective: Key issues: Social economic development Better understand and Local economic The Bank acknowledges its place in the community and Communities collaborate with the development every year donates funds to worthy causes. The Bank communities in which we and employment spent R4,7 million (2014: R4,4 million) on social economic Communities operate. opportunities, development. In addition, employees perform charity work in Local communities education their own time. Previously (schools), skills disadvantaged Learnerships development, communities A total of 36 (2014: 49) learners from previously health, disadvantaged communities participated in the Bank’s environment. learnership programme during the year. Total spend on Material issues: learnerships was R2,0 million (2014: R1,5 million). Socioeconomic Bursaries development A total of 86 (2014: 80) bursaries totaling R1 052 000 (2014: and community R894 000) were granted to permanent employees. involvement.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 21 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Our Corporate Social Investment mission Bidvest Bank is committed to the development and wellbeing Bathebile of the communities it serves. Our socio-economic investments Since 2009, Bathebile has been helping to initiate and develop go back to inception and have long focused on community- community-based skills-building projects. Once the projects based initiatives, youth and education. are self-sustaining they are handed to the community, thereby contributing to a culture of self-reliance. Numerous successes We believe in building robust relationships and work in have been achieved to date. These include a winter feeding partnership with organisations that make a measurable scheme in Diepsloot, a kids’ haven in Benoni that supplies difference to lives and communities. In addition to providing 192 children with tracksuits and sneakers and work with financial support at an organisational level, we also encourage income-generating projects focused on knitting, sewing and our people to play an active part in community affairs and woodwork. programmes. Bathebile is currently working with Oliver House, a Benoni As a member of the JSE-listed Bidvest Group, the Bank also non-profit organisation, to help create Oliver’s Village, a contributes to Group-level CSI initiatives. community-based resource for underprivileged groups. Planned facilities include an HIV/Aids clinic, a children’s care Here is an overview of significant interventions by the Bank centre, a pre-school, a soup kitchen, a learning centre and a during the review period: food security programme that will enable participants to start their own vegetable gardens. Columba Leadership Columba Leadership’s mission is to activate a national movement of engaged young leaders with the objective of improving school performance and youth employment prospects. The programme involves 500 hours of “touch time” with schools and three months of community engagement. Interventions include a six-day residential leadership academy followed by ongoing support and action learning for two years.
Columbia Leadership works with 12 learners from Grade 10 and three seniors who become catalysts for large-scale mobilisation of youth in targeted schools, thereby creating or reinforcing a positive learning culture. Through action learning, they develop 21st century skills. This enables learners to improve their prospects of success with their studies and prepares them for the world of work. In addition, school performance is bolstered.
Simamisa Orphans Care Simamisa, a registered orphan care centre, provides a place of refuge for Aids orphans, abused children and those under the care of social welfare departments. The mission of the Simamisa regeneration project is to support vulnerable children, provide food and accommodate them in a safe environment. Simamisa also provides basic early learning support for smaller children, helps older children attend school and meet basic needs. From a single-room RDP house and two metal shacks, the Simamisa centre has grown into an expanded house with a main bedroom, a storeroom, office, kitchen, three bedrooms that together sleep 18 children, proper bathroom facilities, a small classroom and lounge area.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 22 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Our Corporate Social Investment mission continued
Union of Jewish Women Rotary Club of Riverside The Union of Jewish Women (UJW) is a national non- The Rotary Club of Riverside supports a range of profit women’s organisation that operates in major centres interventions in local communities, including conflict throughout South Africa, serving both the Jewish and outreach prevention, disease prevention, access to water and communities. Projects include initiatives to care for, support sanitation, maternal and child health, basic education and and empower the elderly, women and children. Bidvest literacy support and economic and community development. Bank’s support for UJW outreach programmes includes the To help drive forward this work, Bidvest Bank partners sponsorship of an aftercare centre and feeding scheme in with Rotary in various areas. We provide bursaries for Alexandra and a sewing school in Johannesburg’s inner city. disadvantaged children, sponsor a community art competition, support teacher training programmes, assist daycare centres in underprivileged communities in Zamdela in the Free State, support blanket and poncho programmes, and support a cycle race that raises funds for the club’s community centres.
The Roedean Academy Spearheaded by Roedean School (SA), the Roedean Academy provides a world-class teaching environment in English, mathematics, physical science and accounting to schoolgirls from underprivileged communities in Berea (Johannesburg) and Orange Farm. Roedean Academy partners with Berea’s Barnato High School and Masibambane College, Orange Farm. Roedean staff members provide tuition at Roedean Academy to girls from these schools on various afternoons each week. In addition, transport and a hot meal are provided. Learners also have access to Roedean facilities, including the school library and computer centre. Over the last three years, Bidvest Bank has sponsored bursaries for the top student in each year’s class. During their matric year, the academy assists with applications to institutions providing tertiary education and learnership programmes.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 23 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Independent auditors’ report on the summarised financial statements To the shareholder of Bidvest Bank Limited ended June 30 2015 are consistent, in all material respects, The accompanying summarised consolidated financial with those annual consolidated financial statements, in statements, which comprise the summarised consolidated accordance with the information required by IAS 34: Interim statement of financial position as at June 30 2015, the Financial Reporting and the requirements of the Companies summarised consolidated statements of comprehensive Act of South Africa as applicable to summarised financial income, changes in equity and cash flows for the year then statements. ended, and related notes, are derived from the audited annual consolidated financial statements of Bidvest Bank Limited for Other reports required by the Companies Act the year ended June 30 2015. We expressed an unmodified The “other reports required by the Companies Act” paragraph audit opinion on those annual consolidated financial in our audit report dated September 20 2015 states that statements in our report dated September 20 2015. Our as part of our audit of the annual consolidated financial auditor’s report on the audited annual consolidated financial statements for the year ended June 30 2015, we have read statements contained an Other Matter paragraph “Other the directors’ report, the Audit Committee’s report and the reports required by the Companies Act” (included below). Company Secretary’s certificate for the purpose of identifying Those annual consolidated financial statements, and the whether there are material inconsistencies between these summarised consolidated financial statements, do not reflect reports and the audited annual consolidated financial the effects of events that occurred subsequent to the date of statements. These reports are the responsibility of the our report on those annual consolidated financial statements. respective preparers. The paragraph also states that, based on reading these reports, we have not identified material The summarised consolidated financial statements do not inconsistencies between these reports and the audited annual contain all the disclosures required by the International consolidated financial statements. The paragraph furthermore Financial Reporting Standards and the requirements of states that we have not audited these reports and accordingly the Companies Act of South Africa as applicable to annual do not express an opinion on these reports. The paragraph financial statements. Reading the summarised consolidated does not have an effect on the summarised consolidated financial statements, therefore, is not a substitute for reading financial statements or our opinion thereon. the audited annual consolidated financial statements of Bidvest Bank Limited.
Directors’ responsibility for the summarised consolidated financial statements The directors are responsible for the preparation of the Deloitte & Touche summarised consolidated financial statements in accordance Registered Auditor with the information required by IAS 34: Interim Financial Reporting and the requirements of the Companies Act of Per: Penny Binnie South Africa and for such internal control as the directors Partner determine is necessary to enable the preparation of the November 27 2015 summarised consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility Our responsibility is to express an opinion on the summarised consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing 810, Engagements to Report on Summary Financial Statements.
Opinion In our opinion, the summarised consolidated financial statements derived from the audited annual consolidated financial statements of Bidvest Bank Limited for the year
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 24 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Summarised consolidated statement of comprehensive income for the year ended June 30 2015
2015 2014 Note R’000 R’000 Interest income 222 354 188 806 Interest expense (91 198) (79 714)
Net interest income 131 156 109 092 Fee and commission income 264 142 248 489 Fee and commission expense (80 201) (74 781)
Net fee and commission income 183 941 173 708 Leasing income 653 818 711 843 Depreciation (156 238) (177 130) Other costs (173 121) (222 474)
Net income from leasing 324 459 312 239 Net trading income 267 734 263 557 Other (loss)/income (9 737) 4 007 Operating income 897 553 862 603 Net credit impairment charges 2.2 (562) (4 111) Operating income after credit impairment charges 896 991 858 492 Employment costs (295 541) (271 500) Operating leases (76 453) (73 818) Risk control (23 646) (23 656) Information technology costs (24 716) (21 310) Depreciation and amortisation (30 151) (30 000) Other operating expenditure (80 655) (73 335)
Operating expenditure (531 162) (493 619) Operating income before indirect taxation 365 829 364 873 Indirect taxation (11 472) (18 324) Profit before direct taxation 354 357 346 549 Direct taxation (91 345) (95 751) Profit for the year 263 012 250 798 Other comprehensive income: net of income tax Items that will not be reclassified to profit or loss Actuarial (losses): Post-retirement medical obligations – (48) Fair value reserve through equity on available-for-sale assets (1 840) (3 368)
Total items that will not be reclassified to profit or loss (1 840) (3 416) Total comprehensive income for the year 261 172 247 382
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 25 Summarised consolidated statement of financial position as at June 30 2015
2015 2014 Notes R’000 R’000 Assets Equipment 74 545 62 713 Intangible assets 84 914 46 977 Leased assets 1 1 851 857 995 188 Loans and advances 2 1 240 171 1 163 780 Negotiable securities 3 239 067 – Derivative financial assets 9 844 8 796 Investment securities 116 184 95 286 Current tax receivable 30 885 29 099 Other assets 165 488 112 559 Cash and cash equivalents 4 2 387 550 2 128 203 Total assets 6 200 505 4 642 601 Equity and liabilities Equity Share capital 2 070 2 070 Share premium 525 709 525 709 Fair value reserve 177 (9 170) Share-based payment reserve 16 126 12 310 Retained income 1 592 759 1 451 726 Total equity 2 136 841 1 982 645 Liabilities Intergroup loans 149 550 122 504 Derivative financial liabilities 6 996 8 361 Deposits 5 2 830 773 2 141 298 Other liabilities 893 413 190 429 Deferred tax 182 450 196 882 Defined benefit liability 482 482 Total liabilities 4 063 664 2 659 956 Total equity and liabilities 6 200 505 4 642 601
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 26 Summarised consolidated statement of cash flows for the year ended June 30 2015
2015 2014 R’000 R’000 Cash flows from operating activities Cash generated from operations 622 704 522 639 Interest received 222 354 188 806 Interest paid (91 198) (79 714)
Cash generated by operations after interest 753 860 631 731 Dividends (118 200) (161 625) Tax paid (107 138) (14 295)
Net cash from operating activities 528 522 455 811 Cash flows from investing activities Proceeds on disposal of equipment and leased assets 108 676 138 040 Dividends received 1 467 1 371 Acquisition of leased assets (304 604) (80 189) Acquisition of equipment (36 740) (23 301) Acquisition of intangible assets (42 282) (18 245) Acquisition of investment securities (22 738) (132)
Net cash from investing activities (296 221) 17 544 Cash flows from financing activities Increase/(decrease) in intergroup loans 27 046 (170 202) Net cash from financing activities 27 046 (170 202) Total cash movement for the year 259 347 303 153 Cash at the beginning of the year 2 128 203 1 825 050 Total cash at end of the year 2 387 550 2 128 203
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 27 Summarised consolidated statement of changes in equity for the year ended June 30 2015
Share- Total Fair based Share Share share value payment Total Retained Total capital premium capital reserve reserve reserves income equity R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Balance at July 1 2013 2 070 525 709 527 779 (5 802) 4 284 (1 518) 1 362 601 1 888 862 Profit for the year – – – – – – 250 798 250 798 Other comprehensive income – – – (3 368) – (3 368) – (3 368) Total comprehensive income for the year – – – (3 368) – (3 368) 250 798 247 430 Share-based payment transactions – – – – 5 238 5 238 – 5 238 Share option expense – – – – (989) (989) – (989) Deferred tax on share-based payments recognised directly in equity – – – – 3 777 3 777 – 3 777 Actuarial (losses): Post- retirement medical obligations – – – – – – (48) (48) Dividends – – – – – – (161 625) (161 625) Balance at July 1 2014 2 070 525 709 527 779 (9 170) 12 310 3 140 1 451 726 1 982 645 Profit for the year – – – – – – 263 012 263 012 Other comprehensive income – – – 9 347 – 9 347 – 9 347 Total comprehensive income for the year – – – 9 347 – 9 347 263 012 272 359 Share-based payment transactions – – – – 7 878 7 878 – 7 878 Share option expense – – – – (6 295) (6 295) – (6 295) Deferred tax on share-based payments recognised directly in equity – – – – 2 233 2 233 – 2 233 Tax adjustments 2014 – – – – – – (3 779) (3 779) Dividends – – – – – – (118 200) (118 200) Balance at June 30 2015 2 070 525 709 527 779 177 16 126 16 303 1 592 759 2 136 841
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 28 Accounting policies for the year ended June 30 2015 Presentation of summarised consolidated financials statements The same accounting policies and methods of computation are followed in the summarised consolidated financial statements as the complete consolidated set.
The summarised consolidated financial statements have been prepared in compliance with IAS34: Interim Financial Reporting.
Selected explanatory notes to the summarised consolidated annual financial statements for the year ended June 30 2015
1. Leased assets Operating leases relate to moveable assets rented to customers for a fixed term. The Bank retains all the risk and benefits of ownership of these leased assets. Rentals received under operating leases, are accounted for as income on a straight-line basis over the period of the lease.
2015 2014 R’000 R’000 Cost 1 553 845 1 730 600 Accumulated depreciation (558 657) (506 999) Carrying value at the beginning of year 995 188 1 223 601 Movement for the year Additions 304 604 80 189 Disposals (106 814) (131 472) Depreciation (156 238) (177 130) Capital work in progress 815 117 – Carrying value at end of year 1 851 857 995 188 Cost 2 501 120 1 553 845 Accumulated depreciation (649 263) (558 657) 1 851 857 995 188 2. Loans and advances 2.1 Analysis of loans and advances Loans and advances to customers Call and term loans 286 351 238 717 Mortgage loans 311 090 232 708 Finance leases and instalment finance 637 644 693 157 1 235 085 1 164 582 Less: Impairment provision (5 478) (9 920) Loans and advances to banks 1 229 607 1 154 662 Finance leases 10 564 9 118 1 240 171 1 163 780
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 29 Selected explanatory notes to the summarised consolidated annual financial statements continued for the year ended June 30 2015
2015 2014 R’000 R’000 2. Loans and advances continued 2.2 Movement in impairments Call and term loans Opening balance (246) (1 631) Charge against income 246 (48) Net bad debts written off – 1 433 – (246) Finance leases Opening balance (8 309) (20 435) Charge against income (981) (5 780) Net bad debts written off 4 948 17 906 (4 342) (8 309) Portfolio impairment Opening balance (1 365) (1 676) Release to/(charge against) income 229 311 (1 136) (1 365) Carrying value at end of year Specific impairments – Warranted debt – (342) Specific impairments (4 342) (8 213) Portfolio impairment (1 136) (1 365) (5 478) (9 920) Net (charge against)/release to income Finance leases – Increase in impairment (1 254) (5 779) Finance leases – Warranty claim – 1 496 Finance leases (1 254) (4 283) Call and term loans 246 (48) Portfolio impairment 229 311 Accounts receivable – Provision charge net of warranty claim – (269) Net bad debts recovered 217 178 (562) (4 111)
Unearned finance Gross charges Net R’000 R’000 R’000 Maturity of finance leases 2015 Due within one year 63 521 (2 143) 61 378 Between one and five years 676 615 (92 639) 583 976 More than five years 3 733 (879) 2 854 743 869 (95 661) 648 208 2014 Due within one year 122 415 (3 460) 118 955 Between one and five years 660 494 (84 691) 575 803 More than five years 9 132 (1 618) 7 514 792 041 (89 769) 702 272 Under the terms of the lease agreements, no contingent rentals are payable. These agreements relate to motor vehicles and equipment.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 30 Bidvest Bank AR_2015_PROOF 11 – 05 NOVEMBER 2015
Selected explanatory notes to the summarised consolidated annual financial statements continued for the year ended June 30 2015
2015 2014 R’000 R’000 3. Negotiable securities Held-to-maturity investments carried at amortised cost ETR bills of exchange 239 067 – The ETR bills of exchange consist of customer deals financed by the Bank on behalf of Tradeflow. Tradeflow draws up the bills containing the invoice amount and all interest costs, fees and charges agreed with the customer after which the Bank purchases the bill from Tradeflow and settles the supplier. The customer undertakes to pay the Bank the amount of the bill on due date.
4. Cash and cash equivalents Cash and cash equivalents includes cash on hand and cash in banks and includes cash and bank balances held by insurance and banking subsidiaries in terms of FSB requirements. The average interest rate is 4,54% (2014: 4,30%). 2015 2014 R’000 R’000 Cash on hand and in transit 142 271 119 530 Interbank investments – Current accounts 812 345 337 485 – Money on call 1 312 932 1 604 123 – South African Reserve Bank 95 632 44 556 – Restricted cash held at South African Reserve Bank 24 370 22 509 2 387 550 2 128 203 Total debit balances 2 387 550 2 137 962 Total credit balances – (9 759) 2 387 550 2 128 203 5. Deposits Deposits from customers Fixed and notice 996 249 778 713 Call 1 834 524 1 362 585 2 830 773 2 141 298 Average interest rate on deposits is 4,4% (2014: 4,1%).
Non- Loans at Other financial Held for amortised Available- amortised assets/ trading cost for-sale cost liabilities Total R’000 R’000 R’000 R’000 R’000 R’000 6. Classification of assets and liabilities 2015 Equipment – – – – 74 545 74 545 Intangible assets – – – – 84 914 84 914 Leased assets – – – – 1 851 857 1 851 857 Loans and advances – 1 240 171 – – – 1 240 171 Negotiable securities – 239 067 – – – 239 067 Derivative financial assets 9 844 – – – – 9 844 Investment securities – – 116 184 – – 116 184 Current tax – – – – 30 885 30 885 Other assets – 150 048 – – 15 440 165 488 Cash and cash equivalents – 2 387 550 – – – 2 387 550 9 844 4 016 836 116 184 – 2 057 641 6 200 505 Intergroup loans – – – 149 550 – 149 550 Derivative financial liabilities 6 996 – – – – 6 996 Deposits – – – 2 830 773 – 2 830 773 Other liabilities – – – 893 413 – 893 413 Deferred tax – – – – 182 450 182 450 Defined benefit liability – – – – 482 482 6 996 – – 3 873 736 182 932 4 063 664
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 31 Selected explanatory notes to the summarised consolidated annual financial statements continued for the year ended June 30 2015
Non- Loans at Other financial Held for amortised Available- amortised assets/ trading cost for-sale cost liabilities Total R’000 R’000 R’000 R’000 R’000 R’000 Classification of assets and liabilities continued 6. 2014 Equipment – – – – 62 713 62 713 Intangible assets – – – – 46 977 46 977 Leased assets – – – – 995 188 995 188 Loans and advances – 1 163 780 – – – 1 163 780 Derivative financial assets 8 796 – – – – 8 796 Investment securities – – 95 285 – – 95 286 Current tax – – – – 29 099 29 099 Other assets – 96 232 – – 16 327 112 559 Cash and cash equivalents – 2 128 203 – – – 2 128 203 8 796 3 388 215 95 286 – 1 150 304 4 642 601 Intergroup loans – – – 122 504 – 122 504 Derivative financial liabilities 8 361 – – – – 8 361 Deposits – – – 2 141 298 – 2 141 298 Other liabilities – – – 190 429 – 190 429 Deferred tax – – – – 196 882 196 882 Defined benefit liability – – – – 482 482 8 361 – – 2 454 231 197 364 2 659 956
6.1 Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Bank adopted the amendment to IFRS 7 and IFRS 13 regarding the fair value measurement of financial instruments in the statement of financial position on July 1 2009 and July 2013 respectively. These statements require disclosure of fair value measurements by using the following fair value measurement hierarchy: ➤ Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date (level 1); ➤ Inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (that is as prices) or indirectly (that is derived from prices) (level 2); and ➤ Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (level 3).
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 32 Selected explanatory notes to the summarised consolidated annual financial statements continued for the year ended June 30 2015
6. Classification of assets and liabilitiescontinued 6.2 The following table presents the Bank’s assets and liabilities that are measured at fair value at June 30 Level 1 Level 2 Level 3 Total Notes R’000 R’000 R’000 R’000 2015 Assets Investment securities 11 116 168 – 16 116 184 Derivative financial assets 10 – 9 844 – 9 844 116 168 9 844 16 126 028 Liabilities Derivative financial liabilities 10 – 6 996 – 6 996 2014 Assets Investment securities 11 95 270 – 16 95 286 Derivative financial assets 10 – 8 796 – 8 796 95 270 8 796 16 104 082 Liabilities Derivative financial liabilities 10 – 8 361 – 8 361
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, or industry group, pricing market transactions on an arm’s-length basis. The quoted market price used for financial assets held by the Bank is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise primarily listed equity investments classified as available-for-sale securities.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
6.3 Fair value of financial instruments The following represents the fair values of financial instruments not carried at fair value on the statement of financial position. For all other instruments the carrying value is equal to or a reasonable approximation of fair value.
Carrying Fair value value R’000 R’000 2015 Assets Total advances at amortised cost 1 240 171 1 237 442 2014 Assets Total advances at amortised cost 1 163 780 1 167 546 7. Events after the reporting period With effect from July 1 2015 the Bank participates in a Bidvest Group arrangement with Wesbank, a division of FirstRand Bank Limited, for the provision of auto and fuel cards. The cards are supplied by the Bank to Telkom in terms of the Telkom service agreement. The Bank has provided a payment guarantee of R40 million to the Bidvest Group Limited for the due performance of the Bank’s obligation to Wesbank.
A dividend of R49 million was declared by the Board of Directors on August 20 2015.
Bidvest Bank Limited Summarised consolidated annual financial statements for the year ended 30 June 2015 33
BASTION GRAPHICS