Zambia National Commercial Bank Plc

Interim Results for the six months ended 30 June 2014Condensed statement of income

2014 2013 Change

(%)

Total income 485,588 386,598 26

Pro�t before taxation and extraordinary items 179,896 104,111 73

Tax charge (67,460) (33,336) 102

Pro�t attributable to Shareholders before extraordinary items 112,436 70,775 59

Extraordinary items (net of taxation) - -

Pro�t attributable to Shareholders 112,436 70,775 59

Average number of shares during the year (million) 8,663 8,663 -

Earnings per share (ngwee) 1.3 0.82 59

Financial highlights

Total income up 26%

Deposits up 15%

Total assets up 15%

Shareholders’ funds up 26%

Review of statement of income

Total income

Total income of K485, 588 thousand (June 2013:K386,598 thousand) grew by 26% compared to the same period last year. The growth of 26% was a result of increase in interest income arising from growth in investment in Advances and improved collection of fees and commission income.

Pro�t

Pro�t after tax of K112,436 thousand is 59% up from the 2013 �gure of K70,775 thousand as at 30th June 2013. The strong growth was driven by increase in interest income from both improved yields and growth in advances as well as slow growth in costs.

Company Registration Number: 5387 Share Code: Zanaco ISIN:ZM0000000250 (Zanaco)

In compliance with the requirements of the securities Act Cap 354 of the Laws of Zambia and Listing Rules of the Lusaka stock Exchange, the Directors of Zanaco are pleased to announce half-year interim results for the period ended 30 June 2014Note: These results have not been audited and are derived from the Bank’s management accounts and all amounts are in K’thousand.

Condensed statement of Financial Position

  2014 2013

Assets

Cash and Balances with Bank of Zambia 1,196,529 498,750

Loans and advances to banks 540,484 492,051

Loans and advances to customers 3,367,836 2,992,892

Investment securities 1,579,434 1,785,030

Property, plant and equipment 277,847 246,679

Other assets 188,309 211,862

Total assets 7,150,439 6,227,264

Liabilities

Deposits 5,314,215 4,621,840

Other liabilities 505,261 383,942

Deferred tax liability 34,747 31,229

Borrowed funds 359,625 446,808

Total liabilities 6,213,848 5,483,819

Shareholders’ funds 936,591 743,445

Total liabilities 7,150,439 6,227,264

Condensed cash �ow statement

2014 2013

Cash �ows from operating activities 138,251 104,847

Changes in operating assets and liabilities: (195,892) (19,354)

Cash �ows from investing activities (248) (28,230)

Cash �ows from �nancing activities (56,908) (55,709)

Net increase/(decrease) in cash and cash equivalents (114,797) 1,554

Cash and cash equivalents at beginning of year 870,864 891,661

Cash and cash equivalents at end of the period 756,067 893,215

Condensed statement of changes in equity

Balance at the beginning of the year 867,620 713,383

Net change in available-for-sale �nancial assets (152) 1,300

Pro�t for the period 112,436 70,775

Dividend paid (43,313) (42,013

Balance at end of the period 936,591 743,445

Performance review

The loan portfolio has again seen positive growth and has increased to ZMK3.4 billion, a 13% improvement on the previous year, thereby re-establishing ZANACO as one of the country’s lending leaders. The customer growth rate rose during this time, resulting in a 15% growth in deposit, ZANACO now has more than 750,000 active customers countrywide.

Capital

During the period up to June 2014, the Bank remained well capitalized above the minimum required prudential requirement of 10%. The Bank has progressed towards full implementation of Basel II and will meet all the requirements set by Bank of Zambia.

Future Outlook

We continue to remain positive about the future prospects of the Bank. Our mission still remains to make a meaningful contribution to the economy and the People of Zambia by making banking easier and more convenient for our customers.

As the ‘Peoples Bank', we will endeavour to reach as many customers as possible by 2015, through the use of appropriate technology, diversi�ed distribution channels and products. Zanaco will remain a universal Bank but with a special strategic focus on reaching to as many ‘Unbanked’ Zambians as possible.

We take great pride in our unique standing on the Zambian economic and social market governed by our transparency, good governance and sound �nancial position.

By Order of the Board

The Bank did not declare dividend in respect of the period ended 30th June 2014.