Holding company of NMB BANK LIMITED (Registered Commercial Bank) CONDENSED RESULTS FOR THE SIX MONTHS ENDED

30 JUNE 2013 HIGHLIGHTS 30 June 2013 Reviewed Attributable profit (US$) Basic earnings per share (US cents) Total deposits (US$) Loans and advances (US$) Total Equity (US$) 2 672 911 0.95 210 673 789 183 454 912 47 950 247 31 December 2012 Audited 7 570 502 2.69 191 422 066 152 417 375 30 942 083 30 June 2012 Reviewed 2 564 350 0.91 149 889 217 127 870 654 25 935 931

Enquiries: NMBZ HOLDINGS LIMITED James A Mushore, Group Chief Executive Officer, NMBZ Holdings Limited Francis Zimuto, Deputy Group Chief Executive Officer, NMBZ Holdings Limited Benefit P Washaya, Managing Director, NMB Bank Limited Benson Ndachena, Chief Financial Officer, NMBZ Holdings Limited Website: Email: Tel: +263-4-759 651/9 jamesm@nmbz.co.zw francisz@nmbz.co.zw benefitw@nmbz.co.zw bensonn@nmbz.co.zw http://www.nmbz.co.zw enquiries@nmbz.co.zw

NMBZ HOLDINGS LIMITED

CHAIRMANS STATEMENT INTRODUCTION These results were achieved under a relatively subdued economic and operating environment which was characterised by an illiquid market and a general tightening in the economy in light of the national elections on 31 July 2013. The banking sector financial performance was adversely affected by the Memorandum of Understanding (MOU) on interest rates and bank charges. GROUP RESULTS Compliance with International Financial Reporting Standards The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The condensed financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. Commentary on operating results The profit before taxation was US$3 812 214 during the period under review and this gave rise to an attributable profit of US$2 672 911. Net interest income was US$9 488 623 for the period. Noninterest income amounted to US$8 152 494 and this was mainly as a result of commissions and fee income which amounted to US$7 590 765. Operating expenses amounted to US$13 025 587 and these were driven largely by administration and staff related expenditure. Impairment losses on loans and advances amounted to US$1 887 537 for the current period from a prior year amount of US$688 020 and the increase was mainly due to the liquidity and market challenges being faced by businesses. Dividend In view of the need to retain cash in the business and to strengthen the statutory capital requirements for the banking subsidiary, the Board has proposed not to declare a dividend. Statement of financial position The Groups total assets grew by 17% from US$226 533 682 as at 31 December 2012 to US$264 784 407 as at 30 June 2013. The assets comprised mainly loans, advances and other accounts (US$177 740 224), non-current assets held for sale (US$2 216 500), investment securities held to maturity (US$5 578 070), investments in debentures (US$3 984 723), cash and short term funds (US$61 029 068), investment properties (US$3 020 300) and property and equipment (US$8 483 963). Gross loans and advances increased by 20% from US$152 417 375 as at 31 December 2012 to US$183 454 912 as at 30 June 2013. Total deposits increased by 10% from US$191 422 066 as at 31 December 2012 to US$210 673 789 as at 30 June 2013 in the midst of a declining market deposit base. The Banks liquidity ratio closed the period at 40.76% and this was above the statutory requirement of 30%.

NMBZ HOLDINGS LIMITED

Capital The banking subsidiarys capital adequacy ratio at 30 June 2013 calculated in accordance with the guidelines of the Reserve Bank of Zimbabwe (RBZ) was 18.4% (31 December 2012 15.5%). The minimum required by the RBZ is 12%. The Groups equity increased by 55% from US$30 942 083 as at 31 December 2012 to US$47 950 247 as at 30 June 2013 as a result of an increase in retained earnings and US$14.8 million capital injected through a private placement by three strategic foreign investors. OUTLOOK AND STRATEGY We eagerly wait to see whether the economic environment will now become more certain and predictable post the recent harmonised elections, whatever the case, the Group will continue to scout for more international lines of credit. The Group will also explore growth opportunities in other market segments. APPRECIATION I would like to pay tribute to our valued clients, shareholders and regulatory authorities for their continued support in the period under review. I would also like to thank my fellow board members, management and staff for their profound commitment and dedication which has made the achievement of these results possible in the face of a subdued economic environment.

T N MUNDAWARARA CHAIRMAN 21 August 2013

NMBZ HOLDINGS LIMITED

INDEPENDENT REVIEW BY THE AUDITORS These interim condensed consolidated financial statements for the six months ended 30 June 2013 have been reviewed by the companys auditor, KPMG Chartered Accountants (Zimbabwe). In their review report dated 21 August 2013, which is available for inspection at the companys registered office, KPMG Chartered Accountants (Zimbabwe) state that their review was conducted in accordance with the International Standard on Review Engagements 2410, Review of interim information performed by the independent auditor of the entity, and have expressed an unmodified conclusion on the interim condensed consolidated financial statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2013 30 June 2013 US$ Reviewed 16 099 196 (6 610 573) --------------9 488 623 866 453 8 152 494 --------------18 507 570 6 30 June 2012 US$ Reviewed 11 658 274 (4 854 771) --------------6 803 503 905 133 6 685 240 --------------14 393 876

Note Interest income Interest expense Net interest income Net foreign exchange gains Non-interest income 5 4

Net operating income Operating expenditure Impairment losses on loans, advances and debentures Share of profits of associate Profit before taxation Taxation Profit for the period Other comprehensive income, net of tax Total comprehensive income for the period Attributable to: -Owners of the parent -Non controlling interest

(13 025 587) (10 490 395) (1 887 537) (688 020) 217 768 204 327 ------------------------------3 812 214 3 419 788 (1 139 303) (855 438) ------------- -------------------2 672 911 2 564 350 ------------------------------2 672 911 2 564 350 ========= ========= 2 672 911 -------------2 672 911 ======== 2 564 350 ------------2 564 350 ======== 0.91* 0.91*

Earnings per share (US cents) -Basic -Diluted basic *

9.3 9.3

0.95 0.65

- the amounts were restated after the consolidation of shares referred to in note 10.

NMBZ HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2013 Note 30 June 2013 US$ Reviewed 81 502 34 531 257 13 337 488 -------------47 950 247 31 December 2012 US$ Audited 78 598 18 084 902 12 778 583 ------------30 942 083

EQUITY Share capital Capital reserves Retained earnings Total equity LIABILITIES Deposits and other accounts Current tax liabilities Total liabilities Total equity and liabilities ASSETS Cash and cash equivalents Investment securities held to maturity Investment in debentures Loans, advances and other accounts Non - current assets held for sale Quoted and other investments Deferred tax assets Investment in associate Investment properties Property and equipment Total assets 13 12 14 15 61 029 068 5 578 070 3 984 723 177 740 224 2 216 500 363 599 2 367 960 3 020 300 8 483 963 ----------------264 784 407 ========== 58 171 045 5 501 963 146 599 994 2 225 300 326 106 1 380 596 1 025 919 3 115 300 8 187 459 -------------226 533 682 ========= 11 216 509 737 324 423 ---------------216 834 160 ---------------264 784 407 ========= 195 002 633 588 966 --------------195 591 599 --------------226 533 682 ========= 10

19 16

NMBZ HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2013 Share Capital US$ Balances at 1 January 2012 Total comprehensive income for the six months Impairment allowance for loans and advances Balances at 30 June 2012 Total comprehensive income for the six months Impairment allowance for loans and advances Balances at 31 December 2012 Total comprehensive income for the six months Impairment allowance for loans and advances Shares issued- private placement Share issue expenses Balances at 30 June 2013 78 598 ---------78 598 ---------78 598 2 904 ----------81 502 ======= Share Premium US$ 15 737 548 ------------15 737 548 ------------15 737 548 14 828 241 (495 892) ------------30 069 897 ======== Capital Reserve Share Option Regulatory Reserve Reserve US$ US$ 45 671 --------45 671 ----------45 671 ---------45 671 ====== 1 023 431 254 707 ----------1 278 138 1 023 545 ------------2 301 683 2 114 006 -----------4 415 689 ======= Retained Earnings US$ 6 486 333 2 564 350 (254 707) -----------8 795 976 5 006 152 (1 023 545) ------------12 778 583 2 672 911 (2 114 006) ------------13 337 488 ========

Total US$ 23 371 581 2 564 350 ------------25 935 931 5 006 152 -------------30 942 083 2 672 911 14 831 145 (495 892) ------------47 950 247 ========

NMBZ HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS for the six months ended 30 June 2013 CASH FLOWS FROM OPERATING ACTIVITIES 30 June 2013 US$ Reviewed 3 812 214 865 224 1 887 537 75 300 (37 494) (580 137) (217 768) ------------5 804 876 30 June 2012 US$ Reviewed 3 419 788 634 736 688 020 (122 500) 3 919 (725) (70 000) (204 327) -------------4 348 911

Profit before taxation Non-cash items: -Depreciation -Impairment losses on loans, advances and debentures -Investment properties fair value adjustment -Non - current assets held for sale fair value adjustment -Quoted and other investments fair value adjustment -Profit on disposal of associate -Profit on disposal of property and equipment -Impairment reversal on land and buildings -Share of associate profit Operating cash flows before changes in operating assets and liabilities Changes in operating assets and liabilities Deposits and other liabilities Loans, advances and other accounts Investment securities held to maturity Investment in debentures

21 507 104 (33 027 768) (76 107) (3 984 723) -------------(9 776 618) --------------(264 024) (2 127 185) ----------------(12 167 827) ----------------(1 161 728) 28 500 1 850 000 (26 175) --------------690 597 -------------(11 477 230) -------------14 831 145 (495 892) ------------14 335 253 --------------2 858 023 58 171 045 --------------61 029 068 =========

11 348 739 (4 315 784) (5 425 534) ------------5 956 332 -------------(1 758 006) -------------4 198 326 --------------(1 228 446) 9 003 --------------(1 219 443) --------------2 978 883 -----------------------------------------2 978 883 32 265 953 -------------35 244 836 ========

Taxation Capital gains tax paid Corporate tax paid Net cash (outflow)/inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Proceeds on disposal of property and equipment Proceeds on disposal of non - current assets held for sale Proceeds on disposal of associate Expenses on disposal of associate Net cash inflow/(outflow) from investing activities Net cash (outflow) / inflow before financing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Share issue expenses Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at the end of the period (note 13)

NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 1. REPORTING ENTITY The Holding Company is incorporated and domiciled in Zimbabwe and is an investment holding company. Its registered office is 64 Kwame Nkrumah Avenue, Harare. Its principal operating subsidiary is engaged in banking and other companies hold investments. 2. ACCOUNTING CONVENTION Statement of compliance This condensed consolidated interim financial report has been prepared in accordance with IAS 34, Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position of the Group since the last annual consolidated interim financial statements as at and for the year ended 31 December 2012. This condensed financial report does not include all the information required for the full annual financial statements prepared in accordance with International Financial Reporting Standards. This condensed interim financial report was approved by the Board of Directors on 21 August 2013. 2.1 Basis of preparation The condensed consolidated interim financial statements have been prepared under the historical cost convention except for quoted and other investments, investment properties and financial instruments which are carried at fair value and land and buildings which are stated at their revalued amounts. These condensed financial statements are reported in United States of America dollars and rounded to the nearest dollar. 2.2 Comparative financial information The condensed consolidated interim financial statements comprise a consolidated statement of financial position, a consolidated statement of comprehensive income, a consolidated statement of changes in equity and a consolidated statement of cash flows. The comparative statement of comprehensive income and the comparative statements of changes in equity and cash flows are for six months.

NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013

2.3

Use of estimates and judgements The preparation of the condensed financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In the process of applying the Groups accounting policies, management has made the following judgements which have the most significant effect on the amounts recognised in the condensed consolidated interim financial statements:

2.3.1 Deferred tax asset Provision for deferred taxation is made using the liability method in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences arising out of the initial recognition of assets or liabilities and temporary differences on initial recognition of business combinations that affect neither accounting nor taxable profit are not recognised. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. In determining the amounts used for taxation purposes the directors referred to applicable effective exchange rates at the date of acquisition of assets or incurring of liabilities. The Zimbabwe Revenue Authority (ZIMRA), announced methods to account for the deferred tax arising on assets purchased in ZWD. These methods require the preparer to first estimate the equivalent USD value of those assets at the time of purchase. Since the measurement of transactions in Zimbabwe dollars in the periods prior to indicating 2008 was affected by several economic variables such as mode of payment and hyperinflation, this is an area where the directors have had to apply their judgement and acknowledge there could be significant variations in the results achieved depending on assumptions made. 2.3.2 Land and buildings Land and buildings are stated at their revalued amounts based on valuations performed annually by independent valuers, less subsequent accumulated depreciation and impairment losses.

NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013

2.3.3 Investment properties The fair value of the investment properties at 30 June 2013 has been arrived at on the basis of directors valuation on an open market value method. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. No liabilities are guaranteed by the investment properties. 2.3.4 Investment securities held to maturity The RBZ Bond was valued at cost as there is currently no market information to facilitate the application of fair value principles. There is currently no active market for these bonds.

2.3.5 Impairment losses on loans and advances The Group reviews all loans and advances at each reporting date to assess whether an impairment loss should be recorded in profit or loss. In particular, judgement by management is required in the estimation of the amount and timing of future cash flows when determining the impairment loss. In estimating these cash flows, the Group makes judgements about the borrowers financial situation and the net realisable value of collateral. These estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance. Loans and advances that have been assessed individually and found not to be impaired and all individually insignificant loans and advances are then assessed collectively, in groups of assets with similar risk characteristics, to determine whether provision should be made due to incurred loss events for which there is objective evidence but whose effects are not yet evident. The collective assessment takes account of data from the loan portfolio (such as credit quality, levels of arrears, credit utilisation, loan to collateral ratios etc.), concentrations of risks and economic data. The impairment loss on loans and advances is disclosed in more detail under note 15.3. 2.3.6 Going concern The Directors have assessed the ability of the Group to continue operating as a going concern and believe that the preparation of these condensed financial statements on a going concern basis is still appropriate.

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 3. ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these condensed financial statements are set out below. These policies have been consistently applied unless otherwise stated. 3.1 Financial instruments

3.1.1 Classification Financial assets and liabilities at fair value through profit and loss include financial assets and liabilities held for trading i.e. those that the Group principally holds for the purpose of short-term profit taking as well as those that were, upon initial recognition, designated by the entity as financial assets or liabilities at fair value through profit and loss. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than those classified as held-for-trading and the Group upon initial recognition designates as at fair value through profit or loss and those the Group upon initial recognition designates as available-for-sale. Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Financial assets available-for-sale are non-derivative financial assets that are designated as available-for- sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. 3.1.2 Recognition The Group recognises financial assets at fair value through profit and loss and available for sale assets on the date it commits to purchase the assets. From this date any gains and losses arising from changes in fair value of the assets are recognised in the income statement and other comprehensive income respectively. Held-to-maturity investments and loans and receivables are recognised at cost which is the fair value of the consideration given on the day that they are transferred to the Group. 3.1.3 Measurement Financial assets and liabilities are measured initially at fair value. Subsequent to initial recognition, financial assets and liabilities are measured at fair value through profit and loss and available-for-sale financial assets are measured at fair value, except that any instrument that does not have a quoted market price in an active market and whose fair value cannot be reliably measured is stated at cost, less impairment losses. Held-to-maturity investments and loans and receivables are measured at amortised cost less impairment losses. Amortised cost is calculated using the effective interest rate method. Premiums and discounts, including initial transaction costs, are included in the carrying amount of the related instrument and amortised based on the effective interest rate of the instrument.

11

NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 3.1.4 Fair value measurement principles The fair value of financial instruments is based on their quoted market price at the reporting date without any deduction for transaction costs. If a quoted market price is not available, the fair value of the instrument is estimated using pricing models or discounted cash flow techniques. Where discounted cash flow techniques are used, estimated future cash flows are based on managements best estimates and the discount rate is a market related rate at the reporting date for an instrument with similar terms and conditions. Where pricing models are used, inputs are based on market related measures at the reporting date. 3.2 Investment properties Investment properties are stated at fair value. Gains and losses arising from a change in fair value of investment properties are recognized in the income statement. The fair value is determined at the end of each reporting period. 3.3 Share - based payments The Group issues share options to certain employees in terms of the Employee Share Option Scheme. Share options are measured at fair value at the date of grant. The fair value determined at the date of grant of the options is expensed on a straight-line basis over the vesting period, based on the Groups estimate of shares that will eventually vest. Fair value is measured using the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on managements best estimate, for the effects of non-transferability, exercise restrictions and other behavioral considerations. 3.4 Property and equipment International Accounting Standard 16 (IAS 16) stipulates that the residual value and the useful life of an asset must be reviewed at least each financial year-end. If the residual value of an asset increases by an amount equal to or greater than the assets carrying amount, then the depreciation of the asset ceases. Depreciation will resume only when the residual value decreases to an amount below the assets carrying amount. 4. INTEREST INCOME 30 June 2013 US$ Loans and advances to banks Loans and advances to customers Investment securities Other 30 June 2012 US$

936 587 375 709 15 038 076 11 182 430 124 426 72 121 107 28 014 --------------- ----------------16 099 196 11 658 274 ========= ==========

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 5. NON-INTEREST INCOME Net gains/(losses) from quoted and other investments Commission and fee income Fair value adjustment on investment properties Fair value adjustment on non - current assets held for sale Profit on disposal of property and equipment Profit on disposal of associate Other net operating income

30 June 2013 US$ 37 494 7 590 765 (75 300) 580 137 19 398 ------------8 152 494 ======== 30 June 2013 US$

30 June 2012 US$ (3 919) 6 556 955 122 500 725 8 979 -------------6 685 240 ======== 30 June 2012 US$

6.

OPERATING EXPENDITURE The operating profit is after charging the following: Administration costs Staff costs salaries, allowances and related costs Depreciation Impairment reversal on land and buildings

6 279 681 5 880 682 865 224 -------------13 025 587 ========

5 076 333 4 849 326 634 736 (70 000) ------------10 490 395 ========

7.

TAXATION

Income tax expense

30 June 2013 30 June 2012

US$
Current tax Aids levy Deferred tax Capital gains tax 1 808 389 54 252 (987 362) 264 024 -----------1 139 303 =======

US$
1 050 982 31 550 (227 094) -----------855 438 =======

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 8. IMPAIRMENT LOSSES ON LOANS AND ADVANCES Impairment losses are applied to write off advances in part or in whole when they are considered partly or wholly irrecoverable. The aggregate impairment losses which are raised during the period are dealt with as per paragraph 8.3. 8.1 Specific provisions Specific provisions are made where the repayment of identified advances is in doubt and reflect estimates of the loss. Advances are written off against specific provisions once the probability of recovering any significant amounts becomes remote. 8.2 Portfolio provisions The portfolio provision relates to the inherent risk of losses which, although not separately identified, is known to be present in any loan portfolio. 8.3 Regulatory Guidelines and International Financial Reporting Standards Requirements The Banking Regulations 2000 gives guidance on provisioning for doubtful debts and stipulates certain minimum percentages to be applied to the respective categories of the loan book. International Accounting Standard 39, Financial Instruments Recognition and Measurement (IAS 39), prescribes the provisioning for impairment losses based on the actual loan losses incurred in the past applied to the sectoral analysis of book debts and the discounting of expected cash flows on specific problem accounts. The two prescriptions are likely to give different results. The Group has taken the view that where the IAS 39 charge is less than the amount provided for in the Banking Regulations, the difference is recognized directly in equity as a transfer from retained earnings to a regulatory reserve and where it is more, the full amount will be charged to the profit or loss. 8.4 Non-performing loans Interest on loans and advances is accrued to income until such time as reasonable doubt exists about its collectability, thereafter and until all or part of the loan is written off, interest continues to accrue on customers accounts, but is not included in income. Such suspended interest is deducted from loans and advances in the statement of financial position. This policy meets the requirements of the Banking Regulations 2000 issued by the RBZ. 9. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of NMBZ Holdings Limited by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of NMBZ Holdings Limited adjusted for the after tax effect of: (a) any dividends or other items related to dilutive potential ordinary shares deducted in arriving at profit or loss attributable to ordinary equity holders of the parent entity; (b) any interest recognised in the period related to dilute potential ordinary shares; (c) any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding during the year plus the weighted average

14

NMBZ HOLDINGS LIMITED

number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 9.1 Earnings 30 June 2013 US$ Basic 9.2 Number of shares 30 June 2013 US$ 9.2.1 Basic earnings per share Weighted average number of ordinary shares for basic earnings per share 9.2.2 Diluted earnings per share Number of share at beginning of period Shares issued Shares issued- private placement Shares issued on consolidation Effect of dilution: Share options outstanding Share options approved but not yet granted 30 June 2012 US$ 2 672 911 30 June 2012 US$ 2 564 350

280 710 729

280 710 729*

280 710 729 280 710 729* 103 716 672 103 714 287 2 385 1 074 287 1 074 287* 28 071 073 ----------------- ------------------413 572 761 281 785 016*

========== =========
9.3 Earnings per share (US cents) 30 June 2013 US$ 0.95 0.65 30 June 2012 US$ 0.91* 0.91*

Basic Diluted basic

* Restated after the consolidation of shares referred to in note 10 below.

10. SHARE CAPITAL 10.1 Authorised 30 June 2013 Shares million 600 ====== 31 December 2012 Shares million 350 ===== 30 June 2013 US$ 168 000 ===== 31 December 2012 US$ 98 000 ======

Ordinary shares of US$0.00028 each

At an Extraordinary General Meeting held on 19 February 2013, the Company approved a share consolidation exercise at a ratio of 10 : 1 and consolidated 3 500 000 000 (3.5 billion) shares with a nominal value of US$0.000028 per share to 350 000 000 (350 million) shares with a nominal value of US$0.00028 per share. The Company also approved an increase in the authorised share capital from 350 million shares with a nominal value of $0.00028 per share to 600 million shares with a nominal value of $0.00028 per share.

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NMBZ HOLDINGS LIMITED

10.2 Issued and fully paid 30 June 2013 Shares million 281 104 ----------385 31 December 2012 Shares million 281 ----------281 30 June 2013 US$ 78 598 2 904 ---------81 502 31 December 2012 US$ 78 598 ----------78 598

At 1 January Shares issued

=======

======

======

=====

The Company received a total of US$14 831 145 equity capital from three strategic foreign partners namely Norfund, FMO and AfricInvest who were allocated 34 571 429 shares each for individually investing US$4 943 715. This amount, net of share issue expenses, was used to recapitalise the Bank in order to contribute towards the minimum capital requirements set by the Reserve Bank of Zimbabwe of US$50 million by 30 June 2013. NMBZ Holdings Limited entered into a share buy-back agreement with Nederlandse Financierings-Maatschappij Voor Ontiwikkelingslanden N.V. (FMO), Norwegian Investment Fund for Developing Countries (Norfund) and AfricInvest Financial Sector Holdings (AfricInvest) where these three strategic investors have a right on their own discretion at any time after the 5th anniversary but before the 9th anniversary of its first subscription date, to request NMBZ to buy back all or part of its NMBZ shares at a price to be determined using the agreed terms as entailed in the share buy-back agreement. It is a condition precedent that at any point when the share buy-back is being considered, the proceeds used to finance the buyback should come from the distributable reserves which are over and above the minimum regulatory capital requirements. Further, no buy-back option can be exercised by any investor after the 9th anniversary of the effective date. Subject to the provisions of section 183 of the Companies Act (Chapter 24:03), the unissued shares are under the control of the directors. 11. DEPOSITS AND OTHER ACCOUNTS 30 June 2013 US$ 30 June 2012 US$

11.1 Deposits and other accounts `

Deposits from banks and other financial institutions Current and deposit accounts Total deposits Trade and other payables

47 992 182 162 681 607 --------------210 673 789 5 835 948 --------------216 509 737 =========

38 969 071 152 452 995 --------------191 422 066 3 580 567 ---------------195 002 633 =========

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013

11.2 Maturity analysis

30 June 2013 US$

31 December 2012 US$

Less than one month 1 to 3 months 3 to 6 months 6 months to 1 year 1 to 5 years Over 5 years

169 304 967 10 836 168 20 220 081 1 769 715 8 542 858 --------------210 673 789

159 048 090 8 388 210 5 686 674 1 675 259 16 623 833 -------------191 422 066

========
11.3 Sectoral analysis of deposits 30 June 2013 US$ Banks and financial services Transport and telecommunications companies Mining companies Municipalities and parastatals Manufacturing Distribution Services Agriculture Individuals Other deposits 47 992 182 6 344 963 4 171 466 16 266 626 25 123 778 19 842 897 30 184 949 6 659 542 33 320 712 20 766 674 --------------210 673 789 % 23 3 2 8 12 9 14 3 16 10 -------100

========
31 December 2012 US$ 38 969 071 6 040 981 3 221 341 18 768 175 23 888 559 17 912 925 28 199 595 9 085 971 29 115 145 16 220 303 --------------191 422 066

% 20 3 2 10 12 9 15 5 15 9 -------100

=========
12. INVESTMENT SECURITIES HELD TO MATURITY

====

========

=====

30 June 2013 US$ RBZ foreign currency bonds 5 578 070 ========

31 December 2012 US$ 5 501 963 ========

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 12.1 Maturity analysis of investment securities held to maturity 30 June 2013 US$ 2 348 056 969 004 2 261 010 -------------5 578 070 ======== 31 December 2012 US$ 2 271 949 969 004 2 261 010 -------------5 501 963 ========

Less than 1 month 1 to 3 months 3 to 6 months 6 months to 1 year 1 to 5 years Over 5 years

13.

CASH AND CASH EQUIVALENTS 30 June 2013 US$ Balances with Central Bank Current, nostro accounts and cash Interbank placements 6 988 836 18 040 232 36 000 000 -------------61 029 068 ========= 31 December 2012 US$ 22 671 712 14 999 333 20 500 000 -------------58 171 045 ========

14.

INVESTMENT IN DEBENTURES 30 June 2013 US$ Debentures Provision for impairment loss 31 December 2012 US$

4 787 074 (802 351) --------------------------3 984 723 ========= ======== During the period under review a loan with a carrying amount of US$4 787 074 was converted to convertible debentures of US$4 787 074 with a maturity period of 5 years. The debentures are at an interest rate of 10% per annum. The Bank has an option to convert the debentures to equity or redeem the debentures at par on or before the maturity date, 9 March 2018.

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 15. 15. 1 LOANS, ADVANCES AND OTHER ACCOUNTS Total loans, advances and other accounts 30 June 2013 US$ 50 916 541 122 639 517 ----------------173 556 058 4 184 166 31 December 2012 US$ 57 124 283 86 823 914 ---------------143 948 197 2 651 797

15.1.1 Advances Fixed term loans Loans and overdrafts

Other accounts

-------------177 740 224 ========= 15.1.2 Maturity analysis Less than one month 1 to three months 3 to 6 months 6 months to 1 year 1 to 5 years Over 5 years Total advances Provision for impairment losses on loans and advances Suspended interest 88 639 551 39 382 731 3 840 001 7 208 722 44 383 907 --------------183 454 912 (8 351 528) (1 547 326) --------------173 556 058 4 184 166 ---------------177 740 224 ==========

------------146 599 994 ========= 92 386 313 19 352 134 3 271 119 4 968 635 32 439 174 --------------152 417 375 (7 269 799) (1 199 379) --------------143 948 197 2 651 797 --------------146 599 994 =========

Other accounts

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NMBZ HOLDINGS LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 15.2 Sectoral analysis of utilizations 30 June 2013 US$ Agriculture and horticulture Conglomerates Services Mining Food & beverages Individuals Manufacturing Distribution 31 December 2012 US$ 9 894 729 4 683 682 30 216 258 1 347 402 214 163 30 379 234 29 008 475 46 673 432 --------------152 417 375 =========

% 6 3 20 1 20 19 31 -------100 =====

14 407 057 8 6 896 969 4 39 483 207 22 1 467 763 1 236 761 40 457 048 22 25 754 814 14 54 751 293 30 --------------- ------183 454 912 100 ========= ====

The material concentration of loans and advances are in the distribution sector at 30% (2012:31%). 15.3 Allowance for impairment losses on loans, advances and debentures 30 June 2013 31 December 2012 Specific Portfolio Total Specific Portfolio Total US$ US$ US$ US$ US$ US$ At 1 January 7 164 064 105 735 7 269 799 3 354 088 - 3 354 088 Charge against profits 1 841 017 46 520 1 887 537 3 879 327 105 735 3 985 062 Bad debts written off (3 458) (3 458) (69 351) (69 351) ------------- ------------- ------------- -------------------------------Balance 9 001 623 152 255 9 153 878 7 164 064 105 735 7 269 799 ======== ======== ======== ======== ======= ======= 15.4 Non-performing loans and advances 30 June 2013 US$ Total non-performing loans and advances Provision for impairment losses on loans and advances Provision for impairment losses on debentures (note 14) Suspended interest Residue 41 877 499 (9 001 623) 802 351 (1 547 326) --------------32 130 901 ========= . 31 December 2012 US$ 23 996 312 (7 164 064) (1 199 379) --------------15 632 869 =========

20

NMBZ HOLDINGS LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 16. PROPERTY AND EQUIPMENT Land and buildings US$
COST

Computer equipment US$ 1 524 271 920 559 251 703 -----------2 696 533 590 068 -----------3 286 601 -----------469 976 312 943 (2 562) 65 826 ------------846 183 198 236 -------------1 044 419 -------------2 242 182 ======= 1 850 350 ======= 1 054 295 =======

Furniture and fittings US$ 2 478 701 268 028 (10 825) (251 703) ----------2 484 201 255 276 -----------2 739 477 -----------912 287 410 138 (65 826) (2 545) ------------1 254 054 208 637 -------------1 462 691 -------------1 276 786 ======= 1 230 147 ======= 1 566 414 =======

Motor vehicles US$ 1 766 515 1 556 092 (250) ---------3 322 357 312 168 -----------3 634 525 -----------323 201 662 445 (250) ----------985 396 437 826 -----------1 423 222 ------------2 211 303 ======= 2 336 961 ======= 1 443 314 =======

Total US$ 8 507 739 2 744 679 77 472 (11 075) -------------11 318 815 1 161 728 -----------12 480 543 -----------1 705 757 1 430 956 (2 562) (2 795) -----------3 131 356 865 224 ------------3 996 580 -------------8 483 963 ======== 8 187 459 ======= 6 801 982 =======

Balance at 1 January 2012 Additions Revaluation gain Disposals Reclassifications Balance at 31 December 2012 Additions Balance at 30 June 2013

2 738 252 77 472 --------------2 815 724 4 216 ------------2 819 940 ------------293 45 430 ------------45 723 20 525 -------------66 248 -------------2 753 692 ======= 2 770 001 ======= 2 737 959 =======

DEPRECIATION Balance at 1 January 2012 Charge for the year Transfers Reclassification Disposals Balance at 31 December 2012 Charge for the period Balance at 30 June 2013
NET BOOK VALUE

At 30 June 2013

At 31 December 2012 At 1 January 2012

21

NMBZ HOLDINGS LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 17. CAPITAL COMMITMENTS 30 June 2013 US$ 224 101 4 353 828 ------------4 577 929 ======== 31 December 2012 US$ 5 739 655 -------------5 739 655 ========

Capital expenditure contracted for Capital expenditure authorized but not yet contracted for

The capital expenditure will be funded from internal resources. 18. CONTINGENT LIABILITIES 30 June 2013 US$ Guarantees Commitments to lend 31 December 2012 US$

3 641 105 7 827 744 38 582 928 29 326 528 ---------------------------42 224 033 37 154 272 ========= ==========

22

NMBZ HOLDINGS LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 19. INVESTMENT IN ASSOCIATE The Group had a 24.79% interest in African Century Limited, which is involved in the provision of lease finance. The investment was disposed off on the 29th of May 2013 for a consideration of US$1 850 000. African Century Limited is a company that is not listed on any public exchange. The following table illustrates summarized unaudited and audited financial information of the Groups investment in African Century Limited. Share of the associates statement of financial position:

30 June 2013 US$ Unaudited Current assets Non-current assets Current liabilities Non-current liabilities Equity Share of associates revenue and profit: Revenue Profit Disposal of investment Carrying amount of the investment

31 December 2012 US$ Audited

5 876 431 5 036 603 49 722 56 750 (700 609) (457 427) (3 981 857) (3 610 007) ---------------- ---------------1 243 687 1 025 919 ========= ========= 564 172 ========= 217 768 ========= (1 243 687) ========= 904 446 ========= 434 252 ========= 1 025 919 =========

Reconciliation of carrying amount of investment in Associate: Balance at 1 January Share of profits of associate Disposal of investment Balance 1 025 919 217 768 (1 243 687) -----------======== 591 667 434 252 -----------1 025 919 =======

23

NMBZ HOLDINGS LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 20. EXCHANGE RATES The following exchange rates have been used to translate the foreign currency balances to United States of America dollars (US$) at period end:Mid-rate 30 June 2013 British Pound Sterling South African Rand European Euro Botswana Pula GBP ZAR EUR BWP 1.5274 9.9279 1.3074 8.5985 Mid-rate 31 December 2012 1.6156 8.4776 1.3200 7.7721

24

NMB BANK LIMITED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2013 30 June 2013 US$ Reviewed Interest income Interest expense Net interest income Net foreign exchange gains Non-interest income Net operating income Operating expenditure Impairment losses on loans, advances and debentures Profit before taxation Taxation Profit for the period Other comprehensive income net of tax Total comprehensive income for the period Earnings per share (US cents) -Basic c Note 16 099 198 (6 610 712) ----------------9 488 486 866 453 7 536 120 ----------------17 891 059 (13 009 202) (1 887 537) --------------2 994 320 (815 104) ------------2 179 216 --------------2 179 216 ======== 13.21 30 June 2012 US$ Reviewed 11 541 401 (4 855 839) -------------6 685 562 905 133 6 695 141 -------------14 285 836 (10 490 395) (688 020) --------------3 107 421 (787 981) --------------2 319 440 ------------2 319 440 ========= 14.06

25

NMB BANK LIMITED STATEMENT OF FINANCIAL POSITION As at 30 June 2013 30 June 2013 US$ Reviewed EQUITY Share capital Capital reserves Retained earnings Total Equity LIABILITIES Deposits and other accounts Current tax liabilities Total liabilities Total equity and liabilities ASSETS Cash and cash equivalents Investment securities held to maturity Amount owing from Holding Company Investment in debentures Loans, advances and other accounts Non - current asset held for sale Unquoted investments Deferred tax assets Investment properties Property and equipment Total assets e 61 029 068 58 171 045 5 578 070 5 501 963 641 319 956 161 3 984 723 177 803 072 146 485 358 2 216 500 2 225 300 83 749 82 513 2 379 151 1 368 429 3 020 300 3 115 300 8 483 963 8 187 459 ---------------- ----------------265 219 915 226 093 528 ========== ========== 216 334 626 425 835 ---------------216 760 461 --------------265 219 915 ========= 194 981 244 728 620 --------------195 709 864 -------------226 093 528 ========= Note d 16 506 35 890 190 12 552 758 ---------------48 459 454 16 502 17 879 615 12 487 547 -------------30 383 664 31 December 2012 US$ Reviewed

g f

26

NMB BANK LIMITED

STATEMENT OF CHANGES IN EQUITY for the six months ended 30 June 2013 Capital Reserve Share Regulatory Premium Reserve US$ US$ 13 690 931 ------------13 690 931 1 887 001 ------------15 577 932 15 896 570 ------------31 474 502 ======== 1 023 431 254 707 -----------1 278 138 1 023 545 ----------2 301 683 2 114 005 ----------4 415 688 =======

Share Capital US$ Balances at 1 January 2012 Total comprehensive income for the six months Impairment allowance for loans and advances Balances at 30 June 2012 Shares issued Total comprehensive income for the six months Impairment allowance for loans and advances Balances at 31 December 2012 Shares issued Total comprehensive income for the six months Impairment allowance for loans and advances Balances at 30 June 2013 16 501 --------16 501 1 --------16 502 4 --------16 506 =====

Retained Earnings US$ 6 116 397 2 319 440 (254 707) -----------8 181 130 5 329 962 (1 023 545) -------------12 487 547 2 179 216 (2 114 005) ------------12 552 758 ========

Total US$ 20 847 260 2 319 440 ------------23 166 700 1 887 002 5 329 962 -----------30 383 664 15 896 574 2 179 216 ------------48 459 454 ========

27

NMB BANK LIMITED

STATEMENT OF CASH FLOWS for the six months ended 30 June 2013 CASH FLOWS FROM OPERATING ACTIVITIES

30 June 2013 US$ Reviewed

2 994 320 1 887 537 75 300 (1 237) 865 224 ------------5 821 144 21 353 382 314 842 (33 205 251) (76 107) (3 984 723) -------------(9 776 713) -------------(2 127 185) (1 425) -------------(11 905 323) --------------

30 June 2012 US$ Reviewed

3 107 421 688 020 (122 500) (725) (2 406) (70 000) 634 736 -------------4 234 546 11 466 696 (4 319 372) (5 425 534) --------------5 956 336 --------------(1 758 010) --------------4 198 326 ---------------

Profit before taxation Non-cash items -Impairment losses on loans, advances and debentures -Investment properties fair value adjustment -Non current assets held for sale fair value adjustment -Profit on disposal of property and equipment -Quoted and other investments fair value adjustment -Impairment reversal on land and buildings -Depreciation Operating cash flows before changes in operating assets and liabilities Changes in operating assets and liabilities Deposits and other liabilities Amount owing from holding company Loans, advances and other accounts Investment securities held to maturity Investment in debentures

Taxation Corporate tax paid Capital gains tax paid Net cash (outflow)/inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on disposal of property and equipment Purchase of property and equipment Proceeds on disposal of non current assets held for sale Net cash outflow from investing activities Net cash (outflow)/inflow before financing activities CASHFLOWS FROM FINANCING ACTIVITIES Issue of shares Net cash inflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at the end of the period (note e)

(1 161 728) 28 500 --------------(1 133 228) -------------(13 038 551) -------------15 896 574 -------------15 896 574 -------------2 858 023 58 171 045 --------------61 029 068 =========

9 003 (1 228 446) -------------(1 219 443) -------------2 978 883 ------------------------------------------2 978 883 32 265 953 ---------------35 244 836 =========

28

NMB BANK LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 There are no material differences between the Bank and the Holding company as the Bank is the principal operating subsidiary of the Group. The notes to the financial statements under NMBZ Holdings Limited are therefore the same as those of the Bank in every material respect. a. NON-INTEREST INCOME 30 June 2013 US$ (75 300) 1 237 7 590 765 19 418 -------------7 536 120 ========= 30 June 2012 US$ 122 500 2 406 6 556 955 725 12 555 -------------6 695 141 =========

Investment properties fair value adjustment Non - current assets held for sale fair value adjustments Unquoted investments fair value adjustments Commission and fee income Profit on disposal of property and equipment Other net operating income

b.

OPERATING EXPENDITURE The operating profit is after charging the following: Administration costs Staff costs salaries, allowances and related costs Depreciation Impairment reversal on land and buildings 30 June 2013 US$ 6 637 891 5 506 087 865 224 -------------13 009 202 ======== 30 June 2012 US$ 5 076 333 4 849 326 634 736 (70 000) ------------10 490 395 ========

29

NMB BANK LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 c. EARNINGS PER SHARE The calculation of earnings per share is based on the following figures: 30 June 2013 US$ c.1 Earnings Basic c.2 Number of shares Weighted average shares in issue c.3 Earnings per share (US cents) Basic 16 501 075 13.21 16 501 000 14.06 2 179 216 2 319 440 30 June 2012 US$

30

NMB BANK LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 d. d.1 SHARE CAPITAL Authorised The authorised ordinary share capital at 30 June 2013 is at the historical cost figure of US$25 000 (2012 US$25 000) comprising 25 million ordinary shares of US$0.001 each. Issued and fully paid The issued share capital at 30 June 2013 is at the historical cost figure of US$16 506 (2012 US$16 502) comprising 16.506 million ordinary shares of US$0.001 each CASH AND CASH EQUIVALENTS 30 June 2013 US$ Balances with Central bank Current, nostro accounts and cash Interbank placements 6 988 836 18 040 232 36 000 000 -------------61 029 068

d.2

e.

31 December 2012 US$ 22 671 712 14 999 333 20 500 000 --------------58 171 045 ========= 31 December 2012 US$ 2 510 000 291 890 (2 225 300) 2 538 710 --------------3 115 300 =========

========= f. INVESTMENT PROPERTIES 30 June 2013 US$ Balance at 1 January Additions Transfers to non current assets held for sale Fair value adjustments Balance 3 115 300 (95 000) -------------3 020 300 =========

Rental income amounting to US$18 954 (2012 US$6 600) was received and no operating expenses were incurred on the investment properties in the current period due to the net leasing arrangements on the properties. The Bank has no restrictions on the realisability of all investment properties and no contractual obligations to purchase, construct or develop the investment properties or for repairs, maintenance and enhancements. Investment properties are stated at fair value, as at 30 June 2013. The fair value of the investment properties at 30 June 2013 was arrived at on the basis of directors valuation on an open market value method.

31

NMB BANK LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 g. NON-CURRENT ASSETS HELD FOR SALE 30 June 2013 US$ Carrying amount as at 1 January Transfer from investment properties Fair value adjustments Disposals 2 225 300 95 000 (75 300) (28 500) -------------2 216 500 ========== 31 December 2012 US$ 2 225 300 -------------2 225 300 =========

Land with a fair value of US$95 000 was transferred to non current assets held for sale. Some of the land with a fair value of US$28 500 was disposed off during the period for a consideration of US$28 500. As at 30 June 2013 a directors valuation of an investment property resulted in a fair valuation loss of US$75 300.

32

NMB BANK LIMITED

NOTES TO THE CONDENSED FINANCIAL STATEMENTS for the six months ended 30 June 2013 h. 1. CORPORATE GOVERNANCE AND RISK MANAGEMENT RESPONSIBILITY These condensed financial statements are the responsibility of the directors. This responsibility includes the setting up of internal control and risk management processes, which are monitored independently. The information contained in these condensed financial statements has been prepared on the going concern basis and is in accordance with the provisions of the Companies Act (Chapter 24:03), the Banking Act (Chapter 24:20) and International Financial Reporting Standards. 2. CORPORATE GOVERNANCE The Group adheres to principles of corporate governance derived from the King II Report, the United Kingdom Combined Code and RBZ Corporate Governance Guidelines. The Group is cognisant of its duty to conduct business with due care and in good faith in order to safeguard all stakeholders interests. 3. BOARD OF DIRECTORS Board appointments are made to ensure a variety of skills and expertise on the Board. Nonexecutive directors are of such calibre as to provide independence to the Board. The Chairman of the Board is an independent non-executive director. The Board is supported by mandatory committees in executing its responsibilities. The Board meets at least quarterly to assess risk, review performance and provide guidance to management on both operational and policy issues. The Board conducts an annual peer based evaluation on the effectiveness of its activities. The process involves the members evaluating each other collectively as a board and individually as members. The evaluation, as prescribed by the RBZ, takes into account the structure of the board, effectiveness of committees, strategic leadership, corporate social responsibility, attendance and participation of members and weaknesses noted. Remedial plans are invoked to address identified weaknesses with a view to continually improve the performance and effectiveness of the Board and its members.

33

NMB BANK LIMITED

3.1 Directors attendance at NMB Bank Limited Board meetings

Human Resources, Remuneration and Nominations Committee 2 2 2 2 2 2 2 2 2 2 2 2

T N Mundawarara A M T Mutsonziwa J A Mushore F Zimuto B Ndachena B W Madzivire L Majonga (Ms) J Chigwedere J de la Fargue* J Chenevix - Trench* B P Washaya F S Mangozho L Chinyamutangira

Board of Directors 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

Audit Committee 2 2

Risk Management Committee

Asset and Liability Management Committee (ALCO) Finance & Strategy Committee 2 2 2 2 2 1 2 2

Loans Review Committee 2 2

Credit Committee 2 2 2 2 2 2

2 2 2 2 2 2 2 2

1 2

2 2

2 2

2 2 2 2 2

2 2 2 2 2

2 2 2 2 2

2 2 2 2 2 2 2 1 2 2 2 2 2 2

2 2 2

Meetings planned

Meetings attended

KEY

*Mr J de la Fargue is an alternate director to Mr J Chenevix - Trench on the ALCO, Finance and Strategy Committee.

34

NMB BANK LIMITED

4.

RISK MANAGEMENT The Board of Directors has overall responsibility for the establishment and oversight of the Groups risk management framework. The Board has established the Board Asset and Liability Management Committee (ALCO) and Board Risk Committee, which are responsible for defining the Banks risk universe and risk appetite, developing policies and monitoring implementation. The Bank has a Risk Management department, which reports to the Managing Director and is responsible for the management of the Banks overall risk universe. The Bank has complied with the implementation timelines for key Basel II implementation milestones contained in the Reserve Bank of Zimbabwe Action Plan issued in July 2011. Risk management is linked logically from the level of individual transactions to the Bank level. Risk management activities broadly take place simultaneously at the following different hierarchy levels: a) Strategic Level: This involves risk management functions performed by senior management and the board of directors. It includes the definition of risk, ascertaining the Banks risk appetite, formulating strategy and policy for managing risk and establishes adequate systems and controls to ensure overall risk remains within acceptable levels and is adequately compensated. b) Macro Level: It encompasses risk management within a business area or across business lines. These risk management functions are performed by middle management. c) Micro Level: This involves On-the-line risk management where risks are actually created. These are the risk management activities performed by individuals who assume risk on behalf of the organization such as Treasury Front Office, Corporate Banking, Retail Banking e.t.c. The risk management in these areas is confined to operational procedures set by management. Risk management is premised on four (4) mutually reinforcing pillars, namely: a) adequate board and senior management oversight; b) adequate strategy, policies, procedures and limits; c) adequate risk identification, measurement, monitoring and information systems; and d) comprehensive internal controls and independent reviews.

4.1

Credit risk Credit risk is the risk that a financial contract will not be honoured according to the original set of terms. The risk arises when borrowers or counterparties to a financial instrument fail to meet their contractual obligations. The Board has put in place sanctioning committees with specific credit approval limits. The Credit Risk Management department does the initial review of all applications before passing them on to the Executive Credit Committee and finally Board Credit Committee depending on the loan amount. The Bank has in place a Board Loans Review Committee responsible for reviewing the quality of the loan book. The Credit Risk Management department is responsible for implementing the groups credit risk policies and standards and this includes: Formulating credit policies in consultation with business units, covering collateral requirements, credit assessment, risk grading and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements ; Establishing the authorization structure for the approval and renewal of credit facilities. Facilities require authorization by the Risk Management Committee, Executive Committee or the Board Credit Committee depending on amount as per set limits; The Credit Risk Management department assesses all credit exposures in excess of designated limits, prior to facilities being committed to clients by the business unit concerned. Renewals and reviews of facilities are subject to the same review process;

35

NMB BANK LIMITED

Limiting concentrations of exposure to counter parties and industry for loans and advances; Maintaining and monitoring the risk grading as per the RBZ requirement in order to categorize exposures according to the degree of risk of financial loss faced and to focus management on the attendant risks. Reviewing compliance of business units with agreed exposure limits, including those for selected industries; and Providing advice, guidance and specialist skills to business units to promote best practice throughout the Group in the management of credit risk.

4.2

Market risk This is the exposure of the Banks on and off balance sheet positions to adverse movement in market prices resulting in a loss in earnings and capital. The market prices will range from interest rates, foreign exchange and equity prices. The Bank has in place a Management Asset and Liability Committee (ALCO) which monitors market risk and recommends the appropriate levels to which the Bank should be exposed at any time. The Net Interest Margin and Interest Rate Repricing gaps form the primary measure of interest rate risk, supported by periodic stress tests to assess the Banks ability to withstand stressed market conditions. On foreign exchange risk, the Bank monitors currency mismatches and makes adjustments depending on exchange rate movement forecast. The mismatches are also contained within 10% of the Banks capital. ALCO meets on a monthly basis and operates within the prudential guidelines and policies established by the Board ALCO. The Board ALCO is responsible for setting exposure thresholds and limits, and meets on a quarterly basis.

4.3

Liquidity risk Liquidity risk is the risk of financial loss arising from the inability of the Bank to fund asset increases or meet obligations as they fall due without incurring unacceptable costs or losses. The Bank identifies this risk through maturity profiling of assets and liabilities and assessment of expected cash flows and the availability of collateral which could be used if additional funding is required. The Bank uses the following tools and techniques in the management of liquidity risk: a) Daily Cash flow Monitoring: b) Liquidity Gap Analysis; c) Benchmarks and Ratios; and d) Liquidity Stress Testing. The daily liquidity position is monitored and regular liquidity stress testing is conducted under a variety of scenarios covering both normal and more severe market conditions. The Bank has a Contingency Liquidity Plan which covers both a name specific crisis and market wide crisis. All liquidity policies and procedures are subject to review and approval by the Board. Liquidity risk is monitored through a daily treasury strategy meeting. This is augmented by a monthly management ALCO and a quarterly board ALCO. The Bank monitors its liquidity ratio in compliance with Banking Regulations to ensure that it is above the 30% threshold set by the regulatory authorities.

36

NMB BANK LIMITED

4.4

Operational risk This risk is inherent in all business activities and is the risk of loss arising from inadequate or failed internal processes, people, systems or from external events. The Bank has an Operational Risk Loss Tracker System (OLTS) in which any incident with a potential loss to the Bank or could affect the Banks reputation is recorded within 24 hours of occurrence. This forms the Banks operational loss database which is then used for operational risk modeling and improvement in controls. The Bank also uses Key Risk Indicator reports which are received by the Risk department from various operational units on a monthly basis and are used to detect adverse trends in key indicators and are reported to the board on a quarterly basis The risk department conducts periodic risk assessments on all the units within the Bank aimed at identifying the top risks and ways to minimise their impact. There is a Board Risk Committee whose function is to ensure that this risk is minimized. The Risk Committee with the assistance of the internal audit function and the Risk. Management department assesses the adequacy of the internal controls and makes the necessary recommendations to the Board.

4.5

Legal Risk Legal risk is risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts, laws or regulations. Legal risk may entail such issues as contract formation, capacity and contract frustration. The Legal and Corporate Affairs Department is responsible for managing litigation and analysing emerging legal trends, statues and regulations that may impact on the operations of the Bank. The department is responsible for coordinating the flow of information with a legal bearing to all business units of the Bank. All business units are required to liaise with the department on every legal matter or issues with a legal impact. Permanent relationships are also maintained with firms of legal practitioners and access to legal advice is readily available to all departments.

4.6

Compliance Risk Compliance risk is the risk arising from non-compliance with laws and regulations. The Bank has an independent compliance function which is responsible for identifying and monitoring all compliance issues and ensures the Bank complies with regulatory and statutory requirements. The compliance function conducts compliance monitoring activities such as compliance visits, reviews, snap checks, training and reporting compliance risk to senior management and the Board.

4.7

Reputational risk Reputation risk is the risk of loss of business as a result of negative publicity or negative perceptions by the market with regards to the way the Bank conducts its business. To manage this risk, the Bank strictly monitors customers complaints, continuously train staff at all levels, conducts market surveys and periodic reviews of business practices through its internal audit department. The Bank is active on the Social Responsibility front supporting various social responsibility programs. The Bank maintains Complaints Registers at all the branches wherein all customer grievances or concerns are recorded and date of resolution annotated. Monthly customer complaints

37

NMB BANK LIMITED

returns are submitted to the Compliance Unit for monitoring and tracking of resolutions recommended. All incidents with a potential impact on the Banks reputation are reported to the Risk & Compliance Department within 24 hours of occurrence and appropriate action is taken to protect the Banks reputation. All legal cases and litigations are reviewed and reported to the Board Risk Committee, including the possible impact on the Banks reputation. Media reports are monitored on a daily basis and any such reports with an adverse impact on the Banks reputation are responded to appropriately.

4.8

Strategic risk This refers to current and prospective impact on a Banks earnings and capital arising from adverse business decisions or implementing strategies that are not consistent with the internal and external environment. To manage this risk, the Bank always has a strategic plan that is adopted by the board of directors. Further, attainment of strategic objectives by the various departments is monitored periodically at management level. Further, there is an ALCO, Finance and Strategy Committee at board level responsible for monitoring overall progress towards attaining strategic objectives for the Bank. The directors are satisfied with the risk management processes in the Bank as these have contributed to the minimisation of losses arising from risky exposures.

4.9

External credit ratings The external credit ratings were given by Global Credit Rating (GCR), a credit rating agency accredited with the Reserve Bank of Zimbabwe. Security class Long term 2012 BBB-

5.

REGULATORY COMPLIANCE There were no instances of regulatory non compliance in the period under review. The Bank remains committed to complying with and adhering to all regulatory requirements.

6.

CAPITAL MANAGEMENT The primary objective of the Banks capital management is to ensure that the Bank complies with the RBZ requirements. In implementing the current capital requirements, the RBZ requires the Bank to maintain a prescribed ratio of total capital to total risk weighted assets. Regulatory capital consists of Tier 1 capital, which comprises share capital, share premium, retained earnings (including current year profit), statutory reserve and other equity reserves. The other component of regulatory capital is Tier 2 capital, which includes subordinated term debt, revaluation reserves and portfolio provisions. Tier 3 capital relates to an allocation of capital to market and operational risk. Various limits are applied to elements of the capital base. The core capital (Tier 1) shall comprise not less than 50% of the capital base and portfolio provisions are limited to 1.25% of total risk weighted assets.

38

NMB BANK LIMITED

6.

CAPITAL MANAGEMENT (CONTINUED) The Banks regulatory capital position at 30 June 2013 was as follows: 30 June 2013 US$ Share capital Share premium Retained earnings Fair value gain on investment property 16 506 31 474 502 12 552 758 (2 340 240) --------------41 703 526 (1 118 388) (5 591 608) -------------34 993 530 6 452 577 2 340 240 1 400 000 2 712 337 41 446 107 1 118 388 --------------42 564 495 ========= 231 452 058 ========= 31 December 2012 US$ 16 502 15 577 932 12 487 547 (2 411 775) -------------25 670 206 (1 198 520) (2 231 128) ------------22 240 558 4 819 193 2 411 775 2 301 683 105 735 27 059 751 1 198 520 ------------28 258 271 ========= 182 361 802 =========

Less: capital allocated for market and operational risk Credit to insiders Tier 1 capital Tier 2 capital (subject to limit as per Banking Regulations) Revaluation reserve Subordinated debt Regulatory reserve (limited to 1.25% of risk weighted assets) Portfolio provisions (limited to 1.25% of risk weighted assets) Total Tier 1 & 2 capital Tier 3 capital (sum of market and operational risk capital) Total capital base

Total risk weighted assets

Tier 1 ratio
Tier 2 ratio Tier 3 ratio Total capital adequacy ratio RBZ minimum required capital adequacy ratio

15.12%
2.79% 0.48% 18.39% 12.00%

12.20%
2.64% 0.66% 15.50% 12.00%

39

NMB BANK LIMITED

7.

SEGMENT INFORMATION For management purposes, the Bank is organised into four operating segments based on products and services as follows: Retail Banking Corporate Banking Individual customers deposits and consumer loans, overdrafts, credit card facilities and funds transfer facilities. Loans and other credit facilities and deposit and current accounts for corporate and institutional customers. Money market investment, securities trading, accepting and discounting of instruments and foreign currency trading. Handles the Banks foreign currency denominated banking business and manages relationships with correspondent banks

Treasury

International Banking

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects is measured differently from operating profit or loss in the financial statements. Income taxes are managed on a bank wide basis and are not allocated to operating segments. Interest income is reported net as management primarily relies on net interest revenue as a performance measure not the gross income and expense. Transfer prices between operating segments are on arms length basis in a manner similar to transactions with third parties. No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Banks total revenue in 2013 and 2012.

40

NMB BANK LIMITED

7.

SEGMENT INFORMATION (CONTD) The following table presents income, profit and certain asset and liability information regarding the Banks operating segments and service units: For the six months ended 30 June 2013
Retail Corporate International

Banking
US$ Income Third party Inter - segment Total operating income Impairment losses on loans, advances and debentures Net operating income Results Interest and similar income Interest and similar expense Net interest income Fee and commission income Fee and commission expense Net fees and commission income Depreciation of property and equipment Segment profit/ (loss) Income tax expense Profit/ (loss) for the period 10 770 870 ---------------10 770 870 ------------(352 094) -----------10 418 776 -----------6 193 946 (1 081 104) -----------5 112 842 ------------6 503 259 ------------6 503 259 ------------344 989 1 626 455 --------------1 626 455 ========

Banking
US$

Treasury
US$

Banking
US$

Leasing Unallocated
US$ 123 804 -----------123 804 -----------------------123 804 ------------US$

Total
US$

10 397 840 2 232 510 820 236 -------------- ------------- ------------10 397 840 2 232 510 820 236 --------------- ------------ ------------(1 535 443) ------------ ----------------------8 862 397 2 232 510 820 236 ---------------------------------8 720 435 1 061 013 (4 982 657) (546 951) ----------------------3 737 778 514 062 ----------------------267 400 ------------- ------ -----267 400 -----------------------64 588 15 873 632 637 443 623 ----------------------632 637 443 623 ======= =======

156 511 24 501 771 -----------------------156 511 24 501 771 ------------- --------------(1 887 537) ------------- ---------------156 511 22 614 234 ------------- ---------------------------------------------------------------416 402 114 795 (815 104) -----------(700 309) ======= 16 099 198 (6 610 712) -------------9 488 486 ------------7 590 765 (24 761) ------------7 566 004 ------------865 224 2 994 320 (815 104) -----------2 179 216 =======

123 804 ------------ -------------123 804 ------------ ------------820 106 (24 761) -----------------------820 106 (24 761) ------------- ------------23 372 77 767 99 043 ------------- ------------77 767 99 043 ======= =======

41

NMB BANK LIMITED

7.

SEGMENT INFORMATION (CONTD) For the six months ended 30 June 2013
Retail Corporate International

Banking
US$ Assets and liabilities Capital expenditure Total assets Total liabilities and capital

Banking
US$

Treasury
US$ 130 489 61 718 631 61 936 262

Banking
US$ 10 551 158 111 -

Leasing Unallocated
US$ 2 518 934 2 518 934 US$

Total
US$

635 654 1 486 45 890 760 149 825 238 48 974 008 99 464 620

383 548 1 161 728 5 108 241 265 219 915 52 326 091 265 219 915

42

NMB BANK LIMITED

7.

SEGMENT INFORMATION (CONTD) The following table presents income, profit and certain asset and liability information regarding the Banks operating segments and service units: For the six months ended 30 June 2012
Retail Banking US$ Income Third party Inter - segment Total operating income Impairment losses on loans and advances Net operating income Results Interest and similar income Interest and similar expense Net interest income Fee and commission income Fee and commission expense Net fees and commission income Depreciation of property and equipment Segment profit/ (loss) Income tax expense Profit/(loss) for the period 7 481 083 -----------7 481 083 (87 064) ------------7 394 019 -----------2 319 785 (945 547) -----------1 374 238 ------------4 995 567 ------------4 995 567 ------------273 360 2 117 064 -----------2 117 064 ======= Corporate Banking US$ 9 515 248 -------------9 515 248 (600 956) -----------8 914 292 -----------8 989 529 (3 612 876) -----------5 376 653 -----------787 536 ------------787 536 ------------45 871 4 031 864 -----------4 031 864 ======= International Banking US$ 654 194 ------------654 194 ------------654 194 ---------------------------------654 194 ------------654 194 ------------6 198 154 699 ------------154 699 =======

Treasury US$ 1 352 964 ------------1 352 964 -----------1 352 964 -----------447 830 (297 416) -----------150 414 ----------------- ----------------10 611 975 342 -----------975 342 =======

Unallocated US$ 129 564 -----------129 564 ------------129 564 ------------------------------------119 658 ------------119 658 ------------298 696 (4 171 548) (787 981) ------------(4 959 529) ========

Total US$ 19 133 053 -----------19 133 053 (688 020) --------------18 445 033 ------------11 757 144 (4 855 839) -------------6 901 305 ------------6 556 955 -------------6 556 955 ------------634 736 3 107 421 (787 981) ------------2 319 440 =======

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NMB BANK LIMITED

7. SEGMENT INFORMATION (CONTD) For the six months ended 30 June 2012
Retail Corporate International

Banking
US$ Assets and Liabilities Capital expenditure Total assets Total liabilities and capital 313 916 40 466 863 51 732 968

Banking
US$ 105 930 111 121 307 53 963 981

Treasury
US$ 9 553 14 849 230 44 872 277

Banking
US$ 40 699 40 699 -

Unallocated
US$ 758 348 11 354 978 27 263 851

Total
US$ 1 228 446 177 833 077 177 833 077

8. GEOGRAPHICAL INFORMATION The group operates in one geographical market, Zimbabwe.

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NMB BANK LIMITED

Registered Offices 1st Floor Unity Court Cnr 1st Street/Kwame Nkrumah Avenue Harare Zimbabwe Telephone Facsimile Website: Email: +263 4 759651 +263 4 759648 http://www.nmbz.co.zw enquiries@nmbz.co.zw NMB Centre George Silundika Avenue/ Leopold Takawira Street Bulawayo Zimbabwe +263 9 70169 +263 9 68535

Transfer Secretaries In Zimbabwe First Transfer Secretaries 1 Armagh Avenue (Off Enterprise Road) Eastlea P O Box 11 Harare Zimbabwe In UK Computershare Services PLC 36 St Andrew Square Edinburgh EH2 2YB UK

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