Table of Contents
The Access Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Key Results of the Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Letter from the Chairman of the Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . 6
Letter from the Management Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary of Business Development in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Business Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Our Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 General Meeting of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Supervisory Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
History of AccessHolding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Presentation of the AccessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 AccessBankAzerbaijan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 AccèsBanqueMadagascar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 AccessBankTanzania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 ABMicrofinanceBankNigeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 AccessBankLiberia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 AccessBankTajikistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 ABBankZambia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Corporate Social Responsibility in the Holding . . . . . . . . . . . . . . . . . . . . . . . . . 38
AccessBank’s Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
AccessHolding Management Report 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Consolidated Financial Statements for the Year Ended 31 December 2011 . . 63
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Contact Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
3
AccessHolding|AnnualReport2011
4
AccèsBanqueMadagascar
ABBankZambia
AccessBankLiberia
ABMicrofinanceBankNigeria
AccessBankTanzania
AccessBankAzerbaijan
The Access Network
AccessHolding|AnnualReport2011
5
AccessHoldingoperatesanetworkofcommer-cialbanksindevelopingandtransitioncountrieswithatargetgroupfocusonmicro,smallandmedium-sizedenterprises.TheAccessBanknetworkcomprisessevenmemberbankswithatotalofabout3,500staffandover500,000clients,growingbyseveralthousandeverymonth.
AccessHolding in Brief
AccessBankTajikistan
Key Results of the Year(asof31December2011)
2011 2010
Totalassets(EUR) 480m 408mGrossloanportfolio(EUR) 351.6m 289.4mNo.ofloansoutstanding 181,902 158,707Portfolio-at-Risk 30daysin% 1.0 % 1.0%Totalcustomerdeposits(EUR) 188m 146mNo.ofdepositaccounts 482,846 332,641No.ofstaff 3,318 2,502No.ofbranches 68 57
6
AccessHolding|AnnualReport2011
Letter from the Chairman of the Supervisory Board
DespitetherecentfinancialmarketturmoilexperiencedinEuropeandNorthAmericatheemergingmarketshaveprovedtoberesili-entunderpinnedbyprudentbanking,growingpopulationsandrisingrealincomes.
AccessHoldingcontinuedtoenjoystronggrowthin2011.Totalassetsofnetworkbanksgrewby18%,loansby21%,depositsby28%andclientsby45%.ThishasbeenachievedboththroughorganicgrowthandbythecontinuedcreationofnewAccessfinancialinstitutions.The7thnetworkbankwasopenedinOctoberwiththelaunchofABBankZambia.ThemostmaturebankinthenetworkisAccessBankAzerbaijanwhichonceagainwonanumberofawardsin2011.Itnowhas30branchesspreadthroughoutthecountry.Over3,300peoplearenowemployedacrossthe7banksandcollec-tivelytheyserveaclientbasethatisexpectedtoexceed500,000inthefirsthalfof2012.
In2011,theGroupposteditsfourthconsolidatedprofitinarow,asignifi-cantprerequisiteforbuildingasustainablebankingnetworkfocusedontheneedsofmicro-entrepreneursandSMEbusinesses.ProfitabilityhasbeenachievedwithoutcompromisingthecommitmentofAccesstooperateinaccordancewiththeSMARTPrinciplesofclientprotectionandtheUNPrin-ciplesforResponsibleInvestment.ProfitabilityisanessentialingredientinenablingAccesstocontinuetoexpandbydrawingcapitalfromitscurrentshareholderbaseandinduecoursefromnewprivatesourcesofcapital.InorderforAccesstomaximiseitsimpactitmustbeprofitableandhencesus-tainableoverthelong-term.
Iwouldliketorecordmythankstoallstaffmembers.Theircontinueddedica-tionandgrowingexpertiseliesbehindthecompany’simpressiveperformance.
HywelRees-Jones
Letter from the Management Board
Fromitsfoundationin2006,AccessHoldinghasgrowntobecomeasuccessfullyoperatinginternationalbanknetwork.Networkbankshaveevolvedintosignificantplayersinthebankingsectorsoftheirrespectivecountriesofoperations.Attheendof2011,weservedmorethan180thousandcreditcustomerswithatotalloanportfolioofmorethanEUR350millionthrough68branchesinsevencountries,andoperatedmorethan480thousandcustomerdepositaccountswithanaggregatebalanceofEUR188million.
Thisprosperous‘takeoff’phaseofAccessBanksisreflectedinanover-achievementofgoalsbyAccessHolding,whichhasshownprofitability(basedonIFRS)ineachyearsince2008.Itcanbeexplainedbytheeffectiveinterplaybetweenshareholders,supervisoryboard,managementandstaffofAccessBanksthatsharestrongcorporatevalues;inparticulartransparency,non-discrimination,opencommunication,performanceorientationandsocialresponsibility.
Theyear2011hasbeenanothersuccessfulbusinessyearforAccessHolding.Allnetworkbankshavebeenperforminginlinewith(orabove)expectations.ThelaunchofABBankZambia,theagreementonthestrategictakeoverofAccessBankinAzerbaijanandthemoveintonewheadquarterpremisesinBerlintosupportfurtherexpansionarejustsomeof2011keymilestones.Thebuildingofheadofficestructuresisespeciallyimportantatthisstageinordertoprovidequalityassuranceandreapthesynergiesrequiredforfurthergrowth.
TheHoldingperformsmanyfunctionsthatcannormallybefoundintheheadofficeofaglobalbank.ApartfromManagement,mainfunctionsare:HRdevelopmentofAccessBanks,productdevelopmentandsupportofthebusinessofthesebanks(loans,deposits,andpaymentservices),accounting,internalaudit,andlegaladvice.Furthermore,theheadofficeplaysanimportantrolewithregardtothedevelopmentofsoftwaresystemsandongoingITsup-portofAccessBanks,andthetrainingofthebanks’managementandstaff.
ThishealthystructuralbackgroundgivesAccessHoldingtheconfidencetoachieveitsmissionofbeingaleadingstrategicinvestorinthemicrofinanceindustryandtofurtherexpanditsglobalnetworkofsubsidiaries.WithjointeffortsAccessHoldingwillrealizeaninterestingpipelinewithfurtherinvest-mentsinthethreefocusregionsSub-SaharanAfrica,CentralAsia/EasternEuropeandLatinAmerica.Inadditiontothisplannedmarketdevelopment,mostAccessBankswillincreasinglyofferservicestomiddleincomecustomersandlarger,moreformalSMEs.Theywillnotonlybemicroandsmallbusinessbanksbut“goodbanks”thatofferrelevantfinancialservicesinacustomerfriendlywayatattractiveconditions.AccessBankswillplaypioneeringroleswithregardstoemploymentstandards,environmentalprotection,customerprotectionandresponsiblelending.
ChristophDiehlandThomasEngelhardt
7
Summary of Business Development in 2011
In2011,AccessHoldinganditsbankingnet-workcontinuedtogrowatarobustpace.Totalassetsofnetworkbanksgrewby18%toEUR480million,fuelledbyanincreaseofthetotalgrossoutstandingloanportfolioby21%toEUR352million.Thenumberofoutstandingloansroseby15%to181,902,whereasthenum-berofcustomerdepositaccountssoaredby45%to482,846(propelledbyastrongclientbaseexpansioninSub-SaharanAfrica).Totalbalancesoncustomerdepositaccountsheldbynetworkbanksincreasedby29%toEUR188million.Morethan3,300staffwereemployedbythesevennetworkbanksasatyear-end,anincreaseof32%comparedto2010.
Mostimportantly,thisgrowthdidnotcomeatthecostofquality.Arrearsandloanlossratesremainatequallylow(i.e.strong)levelsasin2010,withagroup-widePAR 30of1%andcumulativeannualwrite-offsbelow1%attheendof2011.
Profitability-wise,2011wasnotasstrongasthepreviousyear,mainlybecausetheexcep-tionallyhigh2010netprofitofAccessBankAzerbaijanreturnedtomorecustomary(albeitstillstrong)levels.Thetotalafter-taxprofitofallnetworkbankscombinedwasEUR16.7million.
Butevenbeyondtherealmoffinancials,2011hasseennumerousexcitingdevelopmentsandmilestonesacrosstheAccessBanknetwork.Thetimelinebelowvisualizessomeoftheseeventsalongthecourseoftheyear.
8
AccessHolding|AnnualReport2011
ABMicrofinanceBankNigeriawitnessesacapitalincreasefromNGN1bntoNGN1.5 bn(EUR4.7milliontoEUR7.1million).
AccessBankTajikistanreachesaloanportfolioofmorethanEUR5million,afterjustoveroneyearofoperations.
ABMicrofinanceBankNigeriasuccess-fullyimplementsSMElending.
FitchRatingsrecon-firmsAccessBank’sBB+rating–thehighestamongAzerbaijan’sprivatebanks;GlobalFinancemagazinerecognizesAccessBankasthebestbankinAzerbaijaninits2011Awards.
AccessBankTanzaniaintroduces“M-Pesa”mobilephonetransferandpaymentservicesasanagentforVodacomTanzania.
2011 February March April June
9
TheBankerMagazinenamesAccessBankasthe‘BankoftheYearinAzerbaijan’initsannualawards.
AccessBankinAzerbaijandisbursesits500,000thloan.
ABBankZambiaisgivenaprestigiousmicrofinanceawardbytheBankersAssociationofZambia.
AccessBankTanzaniareceivesacapitalincreaseofTZS2bn(EUR975thousand)tosupportnewbranchopenings.AccessHoldingbecomesmajorityshareholder.
AccessBankTanzaniareachesthemilestoneof75,000customerdepositaccounts.
TheCentralBankofLiberiaconfirmsthatAccessBankLiberiahasbyfarthebestportfolioqualityintermsofPARintheLiberianbankingsector.
ABBankZambiaopensitsdoorstothepublic.
August 2011BothLFSand
AccessHoldingmoveintonew,significantlylargerofficepremises,thuscreatingsufficientphysicalcapacityforfurthergrowth.
AccèsBanqueMadagascaropensitsfirstruralbranchwithfocusonagriculturalbusiness.
AccessBankwinstheawardfor“BestBankofAzerbaijan”attheannualEuro-money“AwardsforExcellence”inLondon.
July August October November December
Business Purpose
Our vision is a financial sector that offers re-sponsible financial services to all people with equal ambition for excellence and quality.
AccessHolding’smissiontherebyistooperateagrowingglobalnetworkofresponsiblecom-mercialbanksindevelopingandtransitioncountriesthatprovideresponsiblefinancialservicestolowandmiddleincomehouseholdsandinparticulartomicroandsmallbusinesses.
Intheircountriesofoperations,AccessBanksstrivetobethe‘housebank’(bankofchoice)formicroandsmallenterprises,byofferingallthefinancialservicesthattheyusuallyneed.
WebelievethattheMSEsectorisvitalforthedevelopmentanddiversificationofacountry’seconomy,thecreationofjobsandthereductionofpoverty.
Manypeopleinourcountriesofoperationdonothaveaformalandregularsourceofincomebutlivefromtheproceedsofmicroandsmallenterprises,themajorityofwhichareinformal(orsemi-formal)Mostclientsdonotpossessofficialfinancialdocumentation.Furthermore,mostofthepopulationispoorinthesensethattheyarenotabletoaccumulatelargesavingsandassets.
Traditionalcommercialbanksdonotservethisimportantpartofthepopulationadequatelybecausetheirloanbusinessfocusesonlargecompaniesandconsumerloansforsalaryear-ners.Inaddition,theyusuallydiscouragesmalldepositsthroughavarietyofinstruments,e.g.byaskingforhighminimumbalancesontheaccountsorbyrequiringextensiveaccountopeningdocumentation.
Ontheothersideofthefinancialsector,non-bankfinancialinstitutions(e.g.non-governmentalorganizationsandcooperatives)thatofferservicestomicroenterprisesareoftennotef-ficient,mainlyduetotheincentivesgeneratedbytheirownershipstructure.Furthermore,theyarenotauthorizedtooffermanyoftheservicesthatsmallentrepreneursandtheirfamiliesrequire,inparticulardepositaccountsandsimplepaymentservices.Theyoftenremainsmallandasaconsequencearenotabletoreapeconomiesofscalethatwouldallowthemtoreducetheirmarginsovertime.
SmallentrepreneursandtheirfamiliesarethemaintargetgroupofAccessBanks.Ournetworkbankshaveafullbankinglicense(currentlywiththeexceptionofouraffiliateinNigeria).Thisallowsthemtoofferasufficientlybroadproductrangetoevolveintothebankofchoiceofsmallentrepreneurs.Furthermore,allofourproductshavebeenmindfullydesignedinawaytomeettheneedsofthelatter.
Thebank’sloansareprimarilybasedonanassessmentoftheborrower’srepaymentcapacity.Asaconsequence,providingfinancialservicestoourcustomersispersonnel-inten-siveduetothesmallsizeoftransactionsandbecausesmallentrepreneursinourcountriesofoperationsareusuallynotabletoprovidedocumentationofreliablefinancialdata.Thisrequirescollectinginformationthroughcompa-nyandhouseholdvisits.AccessBanks’dedica-tedproductsandriskmanagementtechnology,specificallydevelopedtoservemicro-,small-,andmedium-sizedenterprises,allowthebankstodothisefficientlyandprofitably.
AccessBanksbuild-uplongtermbusinessrela-tionshipswithcustomersbasedonresponsibil-ityandmutualrespect.Bydoingsotheypromoteasavingscultureandsupportborrowerstobuild-upacredithistory.
10
Core CorporateValues andBusiness Model
Mission Statement
AccessHolding|AnnualReport2011
Shareholders,managementandstaffofAccessBankssharestrongcorporatevalues,inparticular:
Transparency Non-discrimination Opencommunication Performanceorientation Socialresponsibility Environmentalprotection
AccessHolding’s business modelrestsonthecreationoracquisitionofnewlyestablishedorexistingcommercialbankswithatargetgroupfocusonmicro,smallandmedium-sizedenter-prises(MSMEs).Thesebanksarethenintegra-tedintoagroupwithacommonbrandidentity-the“AccessGroup”.Banksinthegroupshareacorerangeofstandardisedproducts(withlocaladaptationsasrequired)andajointcommit-menttothesameprinciples:
1.Ease and speed of access–providingfinancialservicestopreviouslyun-orunderservedpartsofthepopulation,withtheaimtobefasterandmoreefficientthananycomparableoperatorinthecountry;
2.Transparency and clarityofproducts,servi-cesandeligibilitycriteria–withaslittleroomfordiscretionorsubjectiveinterpretationaspossible;
3.Quality leadership–inallourcountriesofoperations,westrivetosetindustrystandardswithrespecttocustomerorientationandservicequality.Atthesametime,allmemberbanksarecommittedtoensuringthehighestpossiblequalityoftheirloanportfoliosthroughadherencetointernationalbestpracticeswithrespecttotheirunderwritingstandardsandcreditriskmanagement.
4.Training and staff development–oneofthevitalelementsofthebuild-upstrategyforeachmemberbankistherecruitmentandtrainingoffreshstaffonalargescale.Ourrecruitmentconceptplacesstrongemphasisonidentifyingtalentedandmotivatedstaffthatnotnecessarilyhaspriorrelevantworkexperience.Qualifyingthemtoassumemoreresponsiblerolesovertimeisachievedthroughregulartrainingandcoachingaswellasfrequentstaffexchangebetweennetworkbanks.
5.Strong business ethics–AllmembersoftheAccessGroupadheretoajointsetofprinciplesofgoodcorporatebehaviour,coveringamongothersareassuchasresponsiblelendingpractices,adherencetointernationalandlocalsocialandenvironmentalstandards,aswellasastringentcodeofconductforallmemberbankemployees.
Hence,AccessHolding’srolegoesbeyondthatofaprojectincubatororconventionalstrategicinvestor.
11
Our Shareholders
AccessHoldingiscurrentlyownedbyeightshare-holders,hereafterpresentedinalphabeticalorder:
CDCistheUK’sdevelopmentfinanceinsti-tutionthatsupportsthebuildingofbusinessesandinfrastructureinthepoorestpartsofAfricaandSouthAsia,creatingjobsandmakingalastingdifferencetopeople’slives.
Workinginsomeoftheworld’smostdeman-dingbusinessenvironmentsCDC’sthreecoreareasofbusinessare:
Private equity funds investing; Direct equity investing in companies,
banks and infrastructure; and Direct lending to companies, financial
institutions and infrastructure projects.Investingfromitsownbalancesheet,CDChasreturnedaprofitof£1.7bnsince2004.
TheEuropean Investment Bank (EIB)istheEuropeanUnion‘sfinancinginstitution.Itsshareholdersarethe27MemberStatesoftheUnion,whichhavejointlysubscribeditscapital.
12
OwnershipStructure ofAccessHolding
ThecurrentownershipstructureofAccessHoldingisshowninthetablebelow.
14,12 %
3,26 %
14,12 %16,12 %
14,12 %
14,12 %
10,03 %
14,12 %
AccessHolding|AnnualReport2011
CDCGroupplc(CDC)
NetherlandsDevelopmentFinanceCompany(FMO)
LFSFinancialSystemsGmbH(LFS)
TheEuropeanInvestmentBank(EIB)
TheOmidyar-TuftsMicrofinanceFund(OTMF)
InternationalFinanceCorporation(IFC)
KfWEntwicklungsbank
MicroAssets
TheEIB‘sBoardofGovernorsiscomposedoftheFinanceMinistersoftheseStates.TheEIB‘sroleistoprovidelong-termfinanceinsupportofinvestmentprojects.OutsidetheEU,theEIBisactiveinover150countries(thepre-accessioncountriesofSouth-EastEurope,theMediterra-neanpartnercountries,theAfrican,CaribbeanandPacificcountries,AsiaandLatinAmerica,CentralAsia,RussiaandotherneighbourstotheEast),workingtoimplementthefinancialpillarofEUexternalcooperationanddevelopmentpolicies(privatesectordevelopment,infrastruc-turedevelopment,securityofenergysupply,andenvironmentalsustainability).
FMOistheDutchdevelopmentbank.Itfi-nancescompanies,projectsandfinancialinsti-tutionsfromdevelopingandemergingmarkets.AttheheartofFMO’sstrategystandsthebeliefthatentrepreneurshipiskeyincreatingsustai-nableeconomicgrowthandimprovingpeople’squalityoflife.FMOisspecializedinsectorswhereitscontributioncanhavethehighest
TheOmidyar-Tufts Microfinance Fund,in-vestsinthefinancialservicessectorinemergingmarketsanddevelopingcountries.Thefundseekstodemonstratetheviabilityofcommercialinvestmentinmicrofinancetoinstitutionalinvestors.ThefundishousedwithintheTuftsUniversityendowment.Thefundwasestablis-hedinNovember2005throughagifttoTuftsUniversitybyPierreOmidyar,founderofeBay,andhiswife,Pam,co-founderofOmidyarNetworkwithherhusband.TuftsUniversity(www.tufts.edu),locatedonthreeMassachusettscampusesinBoston,Medford/Somerville,andGrafton,andinTalloires,France,isrecognizedamongthepremierresearchuniversitiesintheUnitedStates.Tuftsenjoysaglobalreputationforacademicexcellenceandforthepreparationofstudentsasleadersinawiderangeofpro-fessions.
TheownersofAccessHoldingandtheAccess-BankssharetheobjectivesandcorporatevaluesoftheGroupaswellasthefundamentalsofourbusiness model(seepage10–11).Inparticular,theyareconvincedthatprovidingresponsiblefinancialservicestosmallenterprisesandlowerincomestratacanbedoneonaprofitableandsustainablebasis.Theyprovidepatientcapitalthatallowsustopursuealong-termapproachininvestingintrainingandbuildingupasignificantcustomerbasis.
Furthermore,allofourShareholdersplacehighemphasisontheGroup’scorporate social respon-sibility.Tothiseffect,theyhaveformulatedacomprehensivesetofpoliciesforournetworkbanksthatincludesresponsiblelendingpracti-ces,goodemploymentstandards,acodeofconductforallstaffatbankandholdinglevel,andastringentsocialandenvironmentalman-agementsystem.AllmemberbanksoftheAccessGroupstrivetoberecognisednotonlyasexcel-lentfinancialserviceproviders,butmoregenerallyasemployersandstakeholdersofthehighestintegrityintheirlocalcommunities.
ThemixofpublicandprivateinvestorsofAccessHoldingsupportsthemissionofthecompany.WhilepublicinvestorsaddtothereputationandsolvencyofAccessHoldingandstrengthenlongtermcommitmenttodevelop-mentgoals,privateinvestorsareexpectedtoensurecommercialsuccess.
13
long-termimpact-financialinstitutions;energy&housing;andagribusiness,food&water.Theyalsofostercapacitydevelopment,suchasfinancialadministration&planningskills,andsustainablebusinesspractices.
The International Finance Corporation(IFC),amemberofWorldBankGroup,createsopportunityforpeopletoescapepovertyandimprovetheirlives.IFCfosterssustainableeco-nomicgrowthindevelopingcountriesbysup-portingprivatesectordevelopment,mobilizingprivatecapitalandprovidingadvisoryandriskmitigationservicestobusinessesandgovern-ments.Thecorporation’snewinvestmentstotaledUSD12.2billioninfiscalyear2011.Thiswasspreadover518projects;USD4.9billionwenttothepoorestcountrieseligibletoborrowfromtheWorldBank’sInternationalDevelopmentAssociation.IFCalsomobilizedanadditional$6.5billiontosupporttheprivatesectorindevelopingcountries.
KfW Entwicklungsbankfinancesinvest-mentsandaccompanyingadvisoryservicesindevelopingandtransitioncountriesonbehalfoftheGermangovernment.Itsaimistobuildupandexpandthesocialandeconomicinfra-structureoftherespectivecountries,andtoad-vancesoundfinancialsystemswhileprotectingresourcesandensuringahealthyenvironment.KfWEntwicklungsbankisaleaderinsupportingresponsibleandsustainablemicrofinanceandisinvolvedintargetgroup-orientedfinancialinstitutionsaroundtheworld.ItisanintegralpartofKfWBankengruppe,whichistheleadingpromotionalbankinGermany.
LFS Financial Systems GmbH (LFS),whichhasfoundedAccessHoldinginAugust2006andwhichisalsothetechnicalpartnerandma-nagerofthecompanyaswellasitsinvestees.LFSisanadvisoryandmanagementfirmbasedinBerlin,specializinginbankingandfinancialsectorprojectsindevelopingandtransitioncountrieswithfocusonmicro,smallandmedi-umenterprise(MSME)finance
MicroAssets,aBerlin-basedinvestmentcompanythathasbeenestablishedtoenableLFSandstaffoftheAccessnetworktoinvestinAccessHolding.
Common
Objectives and
Values
Corporate Governance
AccessHoldinghasestablishedagovernancestructurethatallowswellinformedandstrongdecisionmaking.Inparticular,theSupervisoryBoardoftheHoldingisactivelysteeringthebusinesswhilemanagementhasfullrespon-sibilityforday-to-daydecisions.Withthesuc-cessivedevelopmentofgloballystandardisedpolicies,productsandsystems(solutions)acrosstheAccessBanknetwork,theManage-mentofAccessHoldingisalsoresponsibletoensurethatmemberbanksareoperatinginconsistencywiththesestandards,soasfortheGrouptoreapnetworksynergiesandfacilitatetheexchangeofpersonnelandotherresourcesbetweenbanks.
AccessHoldingisaJointStockCompany(Aktiengesellschaft)inaccordancewiththeGermanJointStockCompanyLaw(Aktienge-setz)andotherapplicablelaws,furtherrefer-redtoasGermanCorporateLaw.TheCompanyisregisteredinBerlinandsharesofficeswithitstechnicalpartnerLFS.
ThesharesofAccessHoldingareordinaryre-gisterednon-bearershares,whichcanonlybesoldwithpriorapprovaloftheothersharehol-ders.
AccessHoldinghasthethreemaincorporatebodiesofaJointStockCorporationunderGermanCorporateLaw:theGeneralMeetingofShareholders,theSupervisoryBoardandtheManagementBoard.Thefollowingenumera-tionsprovideanoverviewofthetasks,rightsandresponsibilitiesofeachbody.AlloftheseprovisionsaredefinedmorecomprehensivelyintheCompany’sArticlesofAssociationandShareholderAgreement.
1. General Meeting of Shareholders
IntheGeneralMeetingofShareholders(GMSH),allinvestorshavevotingrightsinproportiontotheirrespectiveshareholdings.Thebody’smaintasksandrightsare:
Toapproveoramendthecompany’s ArticlesofAssociation;
ToappointmembersoftheSupervisory Board;
Toappointtheexternalauditorof AccessHolding’sfinancialstatements;
TodeterminetheuseofAccessHolding’s profit.
2. Management Board
Withthesuccessivedevelopmentofgloballystan-dardisedpolicies,productsandsystems(solutions)acrosstheAccessBanknetwork,themanage-mentofAccessHoldingisalsoresponsibletoen-surethatmemberbanksareoperatinginconsis-tencywiththesestandards,soasfortheGrouptoreapnetworksynergiesandfacilitatetheexchangeofpersonnelandotherresourcesbetweenbanks.
WithinthegovernancestructureofAccessHolding,theManagementBoardisresponsiblefortheday-to-dayoperations(includingtheformulationofinvestmentproposals)andsupportstheSupervisoryBoardinitscontrolanddecisionmakingfunctions.
TheManagementBoardofAccessHoldingiscurrentlycomposedoftwomembers,bothofwhichhaveservedatAccessHoldingsinceitsinception:
Thomas Engelhardt (Chairman) Bornin1971,Mr.EngelhardtisoneofthethreepartnersinLFS,andhasbeenwiththecompanysinceitsfoundationin1997.Hehas15
yearsofworkingexperienceintheareaofMSMEfinance,includingvariousseniormanagementpositionsinconsultancyprojectsinCentralAsiaandSouthEasternEurope.Between2002and2006,Mr.EngelhardtservedasthefirstGeneralManagerofAccessBankAzerbaijan(thennamed‘MicroFinanceBankofAzerbaijan’),thusplayingtheleadingroleinbuildingupAccessHolding’sflagshipbankfromscratch.HeistheChairmanoftheSupervisoryBoardsofAccessBanksinTajikis-tanandLiberiarespectively,andisaSupervisoryBoardmemberofAccessBankAzerbaijan.Mr.EngelhardtholdsanM.ScinEconomics,andspeaksGerman,English,RussianandSerbo-Croat.
14
GovernanceStructure
Legal Form/Formof Shares
Bodies
AccessHolding|AnnualReport2011
15
Christoph DiehlhasbeenworkingforLFSsince2000andisresponsibleforLFSprojectsinAfrica.WiththefoundationofAccessHoldinginAugust2006,Mr.DiehlwassecondedtotheManagement
BoardoftheHolding.Inthiscapacity,heservesastheChairmanoftheSupervisoryBoardofAccessBankTanzaniaandABBankZambiaandisamemberoftheAuditCommitteeofAccessBankAzerbaijan.HehasthreeyearsprofessionalexperienceasGeneralManagerofaformerLFS-managedMicrofinanceBankinMozambique,andtenyears’experienceinseniormanagementandteamleaderpositionsinMSMEandhousingfinanceinstitutionbuildingprojectsinvariouscountries.From1992to1996,Mr.DiehlservedasanauditorintheoverseasdepartmentofC&LDeutscheRevision.Mr.DiehlhasanM.Sc.inEconomics,andspeaksGermanandEnglish.
JointheadofficeofAccessHoldingandLFSFinancialSystemsinBerlin,exteriorviewandbelow,lobbyentrancehall.
16
AccessHolding|AnnualReport2011
Corporate Governance/Organization
3. Supervisory Board
WithinthegovernancestructureofAccess-Holding,theSupervisoryBoardisresponsibleforthedeterminationofthegeneralbusinessstrategy,theappointmentoftheManagementBoardmembers,themonitoringofoperationalactivitiesandthedecisiononallinvestmentsordivestments.TheSupervisoryBoardisnotinvolvedintheday-to-dayoperativebusinessoftheHolding.Itcurrentlyconsistsofthefol-lowingsevenmembersnominatedbythesevenmajorshareholdersofAccessHolding.
Edvardas BumsteinasisaSeniorInvestmentOfficerattheEuropeanInvestmentBank(EIB),beingresponsibleformicrofinanceoperationsintheAfrica,CaribbeanandPacific(ACP)region.Heisamemberofgovernancebodiesandinvest-mentcommitteesofvariousmicrofinancein-vestmentcompanies.PriortojoiningEIBin2005,heworkedasconsultantandteamleaderinoperativemicrolendingprojects.Mr.BumsteinasholdsaM.Sc.inTransitionEconomicsfromtheLondonSchoolofEconomicsandPoliticalScience.
Frank BellonisaPrincipalSectorEconomistatKfW.Heisresponsibleformicrofinanceanden-vironmentalfinancewithinKfW’sCompetencyCenterforSustainableEconomicDevelopmentandGlobalFunds.HeservedalsoasDirectorofKfW‘sCountryOfficesforBoliviaandChileaswellasforBosnia-Herzegovina.FrankBellonhasmorethan20yearsofexperienceindevelop-mentbankingandprojectfinanceandisamem-berofseveralgovernancebodiesoffinancinginstitutions.FrankBellonholdsaMasterDegreeinEconomicsfromtheUniversityofTübingen.
Bernd ZattlerisChairmanoftheSupervisoryBoardsofAccèsBanqueinMadagascarandABMicrofinanceBankNigeria,andDirectorontheSupervisoryBoardofAccessHolding.BeforethefoundationofLFS,heworkedforamultinationalfirmandininstitutionsengagedindevelopmentfinance.HefoundedLFS,AccessHolding’stechni-calpartnerin1997,andhassincethenbeenManagingDirectorandmajorityownerofthefirm.
17
MembersoftheSupervisoryBoard:(lefttoright)EdvardasBumsteinas,FrankBellon,BerndZattler,HywelRees-Jones,EltjoKok,SyedAftabAhmed,TryfanEvans
Hywel Rees-JonesisaManagingDirectoratCDCwithprimaryresponsibilityforglobalsectorprivateequityfunds,microfinanceanddebt.Hisentirecareerhasbeenfocusedontheemergingmarketswherehehasworkedasadevelopmenteconomist,lender,privateequityinvestorandfundoffundsinvestor.Hehaslivedformorethan20yearsinemergingmarketsbothinAfricaandAsia.Hehasbeenadirectorofbusinessesintheagribusiness,financial,FMCG,andpropertysectors.
Eltjo Kokisacorporatefinancialadvisor.HefunctionsasBoardroomAdvisorandisspecia-lisedinimprovingpersonal,teamandcorpo-rateperformanceandeffectiveness.HeworkscurrentlywithDirectorsandBoardsofmulti-nationalandfamilyownedcompanies.HehasbeeninvariouspositionsinhiscorporatelifesuchasFinanceDirector,DivisionalRegionalDirectorandGlobalHRDirector.
Syed Aftab Ahmed workedwiththeInternatio-nalFinanceCorporation(IFC)invariouscapa-citiesfromAugust1989untilhisretirementinDecember2006.ThelastpositionheldatIFCwasasSeniorManagerinchargeoftheGlobalMicroandSmallBusinessFinanceGroup.Inthiscapacity,Mr.AhmedledthedevelopmentofIFC‘sglobalmicrofinancebusinesspracticeandrelatedinvestmentportfolio.Sincehisre-tirement,IFChasnominatedhimontheBoardofDirectorsandtheinvestmentcommitteesofvariousportfoliobanksandfinancialinstitutions.Mr.AhmedholdsaMaster‘sdegreeinEconomics.
Tryfan EvansisDirectoroftheOmidyar-TuftsMicrofinanceFundandresponsibleforinvest-mentstrategy,andportfolioconstructionandmanagement.Mr.EvansalsoservesasDirectorofInvestmentsintheTuftsUniversityInvest-mentOfficewhereheisresponsiblefortheendowment‘sinternationalprivateequitypro-gram.Hehasinvestmentexperienceinover20developingcountriesinAfrica,LatinAmerica,EasternEurope,andSouthandSoutheastAsia.
History of AccessHolding – Main Events and Milestones
Sinceitsestablishmentin2006,AccessHoldinghasinvestedineightcommercialmicrofinancebanks.Twohadalreadybeenco-foundedbyLFSpriortotheestablishmentoftheHolding:MicroFinanceBankofAzerbaijan(whichwaslaterrenamedintoAccessBank,‘ABA’)andSocremoBancodeMicrofinançasinMozam-bique.TheinvestmentinSocremowashoweversoldin2008astheshareholdersoftheBankcouldnotreachagreementonitsintegrationintotheAccessBanknetwork.
ThebanksfoundedaftertheestablishmentofAccessHoldingareAccèsBanqueMadagascar(February20071),AccessBankTanzania(Nov-ember2007),ABMicrofinanceBankNigeria(November2008),AccessBankLiberia(January2009),AccessBankTajikistan(April2010)andABBankZambia(October2011).Thefoundationofthesebankswasspearheadedandcoordi-natedbyAccessHoldingastheleadinvestor,incollaborationwithotherinternationalandlocalinvestors.
AllsevenmemberbanksoftheAccessBanknetworkhavebeendevelopinginlinewith(oraheadof )investorexpectations.Thissuccess-fulperformancehasenabledAccessHoldingtobecomeprofitable(basedonIFRS)alreadyin2008,onlytwoyearsafteritsfoundation.Whilethetotalnetwork’sgrossoutstandingloanportfoliogrewtoEUR351.6millionattheendof2011,97%ofoutstandingloansamountedtolessthanEUR10,000,indicatingaclearfocusonthemicroenterpriseclientele.
LFShasalsobeensignificantlyexpandedsinceAccessHolding’screationin2006,enablingeachnetworkbanktodrawonprofessionalsupportofitsIToperationsatanytime.
Moreover,theAccessBanknetworkhasalsomaintainedanexcellentloanportfolioquality,withaconsolidatedPortfolio-at-Riskgreater30days(PAR 30)ratioaround1%andannualwrite-offratiosofbelow1%ineveryyearsinceinception.Thesequalityindicatorsarecurrentlyunrivalledamonggloballyoperatingmicro-financebanknetworkswithsimilarlendingmethodologies.
However,theimpactofAccessBanksisbyfarnotlimitedtotheirlendingactivities.Overthelastyears,thenetworkbankshaveevolvedintosignificantretailbanksintheirrespectivecoun-triesofoperations,withatotalofmorethan3,300staffspreadover68branchesinsevencountries,theyhavebuiltupatotalof482,846customerdepositaccountswithaggregatebalancesofEUR187.8million.Thetotalclientbasewillexceed500,000inthefirsthalfof2012,andisprojectedtoreachonemillionclientsbytheyear2016.
Inparalleltothedevelopmentofitsbankingnetwork,AccessHolding(incollaborationwithLFS)hasbuiltupitsheadofficestructuresinBerlin.Since2010,networkbanksarecom-prehensivelysupportedbycentralpersonnelworkinginareassuchascredit,retail,productdevelopment,internalaudit,humanresources,learning&development,oraccounting&finance.TheinformationtechnologyarmofLFShasalsobeensignificantlyexpandedsinceAccessHolding’screationin2006,enablingeachnetworkbanktodrawonprofessionalsupportofitsIToperationsatanytime.
1Thedatesinbracketsrefertothemonthsinwhichtherespective
banksopenedtheirdoorstothepublic,notwhentherespectivelegal
entitieswerecreated.
18
Summary
AccessHolding|AnnualReport2011
AccessHoldingisfoundedPreparationoffirstroundofinvestments
InvestmentsinexistingbanksinAzerbaijan andMozambique
Foundationandlaunchofnetworkbanksin MadagascarandTanzania
CDCjoinstheshareholdergroup
AHbecomesprofitableDivestmentfromSocremoBank(Mozambique)
LaunchofABMicrofinanceBankNigeria
LaunchofAccessBankLiberiaFMOjoinstheshareholdergroup
LaunchofAccessBankTajikistanSignificantexpansionof
headofficestructures
LaunchofABBankZambiaMoveintonewpremisestosupportfurther
expansionAgreementonstrategictakeoverof
AccessBankinAzerbaijan
19
2006
2007
2008
2009
2010
2011
AccessBank Azerbaijan
AccessBankAzerbaijanwasfoundedbyLFSFinancialSystemsandamultinationalgroupofpartners(theBlackSeaTradeandDevelopmentBank,theEuropeanBankforReconstructionandDevelopment,theInternationalFinanceCorporation,andKfWEntwicklungsbank)inlate2002undertheoriginalnameof‘MicroFinanceBankofAzerbaijan’.AccessHoldingwasadmittedasashareholderafteritsfoundationin2006.In2008,itwasrenamedintoAccess-BankandhassincethenbeenthepremierbankoftheAccessBanknetwork.
21
AccessHolding|AnnualReport2011
Overview
BranchNetwork (30)
Shareholders
Capital BakuInhabitants 9.2mArea 86,600km2
GDP per capita (US$) 5,722Key industries Extractiveindustries (oilandnaturalgas)
Baku(14)
KhirdalanSumqayit
Guba
Khachmaz
Mingechevir
Ganja(2)
Gazakh
Zaqatala
Sheki
Goychay
Barda
Imishli
Jalilabad
Lenkoran
Salyan
20,0 %
16,5 %
20,0 %
20,0 %
20,0 %
3,5 %
loans,housingandagriculturalloans,differenttypesofcustomerdeposits,avarietyofmoneytransferservicesaswellaspaymentcards.AgrowingnumberoflargerSMEsarealsousingadvancedbankingservices,suchassalarypaymentfacilitiesandup-to-datetradefinan-cingproducts,suchaslettersofcredit(L/C)andlettersofguaranteewithintheframeworkoftheEuropeanBankforReconstructionandDevelopment’s“TradeFacilitationProgram”.
AccessBank Azerbaijan
Products
AccessBankhasdemonstratedstronggrowthfromthebeginningandhasrecentlyopenedits30thbranch.Ithasquicklyevolvedintotheleadingprovideroffinancialservicestomicro,smallandmedium-sizedenterprises(MSMEs)inAzerbaijan.AsofJanuary2012,AccesBankhasdisbursed528,882loansforUSD1,853,365,972sinceitsinception.ButevenbeyondtherealmofMSMEfinance,AccessBankisarecognizedqualityleaderinthecountry’sbankingsector,holdingthehighestratinginthebankingsector(LongTermIDRBB+/viabilityratingb+,Fitch).
Intermsoftotalbankingassets,AccessBank‘smarketsharewas2.81%attheendof2011withUSD373,086.47.Itisranked7thoutofallbanksinthecountry.Inaddition,intermsoftotalloanportfolio,AccessBank‘smarketshareis3.12%attheendof2011withUSD289,381.71.
Thebankhaswonvariousprestigiousawards(bydifferentinternationalinstitutes)asthebestbankinAzerbaijaninthepastyears.
Initspursuittobea“housebank”foritstargetclienteleofMSMEsandgenerallower/middleincomegroupsinAzerbaijan,ABAhassucces-sivelybroadeneditsrangeofproducts.Itnowoffersvarioustypesofbusinessandpersonal
BusinessDevelopment
AccessHolding|AnnualReport2011
22
Key data 2011
Totalassets(EUR) 376.9mGrossloanportfolio(EUR) 294.3mNo.ofloansoutstanding 119,501Portfolio-at-Risk 30daysin% 0.76 %Totalcustomerdeposits(EUR) 144.4mNo.ofdepositaccounts 220,594No.ofstaff 1,344No.ofbranches 30
AccessBank Head Office137AlofsatGuliyevStr.Baku,AZ1000,AzerbaijanPhone:(+99412)493-07-26Fax:(+99412)493-07-96www.accessbank.az
23
Contact
Key data 2011
Totalassets(EUR) 25.4mGrossloanportfolio(EUR) 14.3mNo.ofloansoutstanding 20,883Portfolio-at-Risk 30daysin% 4.43%Totalcustomerdeposits(EUR) 17.8mNo.ofdepositaccounts 71,183No.ofstaff 561No.ofbranches 14
AccésBanque MadagascarImmeubleBirHackeimLotIBG21Ter,AntsahavolaAntananarivo101MadagascarPhone:(+261)202232234Email:[email protected]
AccèsBanque Madagascar
Businessdevelopment
Contact
AccèsBanqueMadagascar(ABM)wasestab-lishedinOctober2006byAccessHoldinginpartnershipwithagroupofinternationalandlocalco-investors.Thebankopeneditsfirstbranchinthecountry’scapitalAntananarivoinFebruary2007andhassincethenbuiltupanetworkof14branchesinthecapitalandothertownsofthecountry.
Withmorethan560employeesandover70,000clients,ABMhasevolvedintoasigni-ficantplayerandaleadingemployerintheMalagasybankingsector.Despiteaclearfocusonthecoretargetgroupofmicro,smallandmedium-sizedenterprises(MSMEs),thebankcatersforabroadvarietyofclientsandaspirestobecomea“housebank”forthelower/middleincomestrataoftheMalagasypopulation.
ABM’sproductrangecomprisesloanstomicroandsmallenterprisesbutincreasinglyalsotomediumentrepreneurs.Bankingservicescom-prisecurrentandsavingsaccountsaswellastermdepositfacilitiesandavarietyofpaymentservices(checksandnationalwiretransferservices).
Overview
Products
AccessHolding|AnnualReport2011
24
Capital AntananarivoInhabitants 21.9mArea 587,041km2
GDP per capita (US$) 421Key industries Agriculture andtourism
Antananarivo(11)
AntsirabeBetafoAmbatolampy
Shareholders
16,8%12,0%
13,6%
44,0 %
13,6%
Key data 2011
Totalassets(EUR) 25.1mGrossloanportfolio(EUR) 15.0mNo.ofloansoutstanding 12,305Portfolio-at-Risk 30daysin% 1.20%Totalcustomerdeposits(EUR) 18.2mNo.ofdepositaccounts 77,356No.ofstaff 342No.ofbranches 6
AccessBank Tanzania LtdP.O.Box95068,Dar-es-Salaam,TanzaniaTel:+255-22-2774355Fax:+255-22-2774340Email:[email protected]://www.accessbank.co.tz
AccessBank Tanzania
27
Businessdevelopment
Contact
AccessBankTanzania(ABT)wasestablishedbyAccessHoldingandfourinternationalco-inves-torsasthethirdmemberoftheAccessBanknetworkon21stNovember2007.Thebankoper-atesunderafullcommercialbanklicenseandhasbynowopenedsevenbranchesinthecom-mercialcapitalDaresSalaamanditswiderperimeter.
Sinceopeningitsdoorsinlate2007,ABThasevolvedintooneofthesignificantprovidersofloansandotherfinancialservicestoMSMEsandthelower/middleincomesegmentsinDaresSalaam.ABThasalsoemergedasoneofthequalityleadersintheTanzanianmicrofi-nancesector,witharrearsratesconsistentlybelowmostofitscompetitors.Thebankhasmorethan80,000clientsandisamongthetenlargestemployersintheTanzanianbankingsector.ABTnowplanstoexpanditsgeographi-calfootprinttootherregionsofTanzaniainitslong-termpursuittobecomeoneoftheleadingretailbanksinthecountry.
ABT’sproductportfoliocomprisesmicroandSMEloansonthecreditside.Bankingservicesincludedepositproducts,butalsoaccountproductsincludingcurrentaccounts,savingsaccounts,savingsplanaccountsandstudentaccounts.Avarietyofmoneytransfersystemsarealsooffered.
Overview
Capital DodomaInhabitants 43.2mArea 945,203km2
GDP per capita (US$) 527Key industries Agriculture tourismand mineralexploitation(gold)
DaresSalaam(7)
Dodoma
Shareholders
AccessHolding|AnnualReport2011
Products
8,3%10,7%
15,8%
50,7%
14,4%
Key data 2011
Totalassets(EUR) 20.2mGrossloanportfolio(EUR) 17.1mNo.ofloansoutstanding 16,930Portfolio-at-Risk 30daysin% 0.95%Totalcustomerdeposits(EUR) 2.2mNo.ofdepositaccounts 44,460No.ofstaff 467No.ofbranches 8
AB Microfinance Bank Nigeria
Businessdevelopment
Contact
ComparedtomanyothercountriesinSub-Sa-haranAfrica,Nigeria’sfinancialservicessectorismoredevelopedanddiversified,offeringagoodvarietyofproductsandservicesforcor-porateandhighnetworthclients.Howeveritsmicrofinancesectorisstillataninfantstage,withveryfewoperatorsofsignificantscale.Thisimpedesthedevelopmentofthecountry’smicroandsmallbusinesssectoranditsabilitytogenerateemploymentandincome.ABMicrofinanceBankNigeria(ABN)wasesta-blishedbyAccessHoldingandImpulseMicro-financeFundinMay2008,withthreeothershareholders(aslistedbelow)joiningshortlyafteritsfoundation.Thebankopeneditsdoorstothepublicon10thNovember2008afterseveralmonthsofpreparation.
Injustoverthreeyearsofoperations,ABNhasbuiltupasolidbranchpresenceacrossthegreatermetropolitanareaofLagos,coveringalldistrictsofsignificantmicroenterpriseactivity.ABN’svisionistobecometheleadingmicrofi-nancebankinNigeriaandtosetnewstandardsfortheNigerianmicrofinancesectorintermsofprofessionalism,transparencyandefficiency.Bydeliveringappropriatefinancialservicestothetargetgroup,ABMicrofinanceBankNigeriaseekstocontributetoprivatesectorgrowthandinvestment,thushelpingtocreatenewbusinessandemploymentopportunitiesfortheNigerianpopulation.
Asidefromprovidingbusinessloanstomicroandsmallenterprises,ABNalsocollectsdepositsfromthepublicandprovidescurrentaccountsandabasicrangeofpaymentservices.
AB Microfinance Bank NigeriaIkeja(HeadOffice)0,ObaAkranAvenue,Ikeja,LagosNigeriaTel:[email protected]://www.ab-mfbnigeria.com/
Overview
Products
AccessHolding|AnnualReport2011
28
Capital AbujaInhabitants 152.2mArea 923,768km2
GDP per capita (US$) 1,222Key industries Extractiveindustries (oilandnaturalgas)
Lagos(8)
Abuja
Shareholders
12,5%12,5%
15,0%
50,1%
10,0%
Key data 2011
Totalassets(EUR) 13.5mGrossloanportfolio(EUR) 4.2mNo.ofloansoutstanding 7,078Portfolio-at-Risk 30daysin% 5.15%Totalcustomerdeposits(EUR) 5.2mNo.ofdepositaccounts 67,418No.ofstaff 290No.ofbranches 5
Monrovia Head Office20thStreet,Sinkor,TubmanBoulevard,Monrovia,LiberiaTel:+231(0)77852135+231(0)76358499www.accessbank.com.lr
AccessBank Liberia
31
Businessdevelopment
Contact
AccessBankLiberia-theMicrofinanceBank(ABL)startedoperationsinJanuary2009withitsheadquartersinthecapitalMonrovia,whichaccountsforaboutathirdofLiberia’stotalpopulationof3.5million.ABLisalicensedandregulatedfully-fledgedcommercialbank,whilstbeingthefirstLiberiabanktofocusspecificallyonthemicroandsmallbusinessclientele.Accesstobankingserviceswasuntilrecently(withthemarketentryofABL)limitedtoasmallnumberofmostlyhigh-value,well-connectedcustomers.AccessBankLiberia,TheMicrofinanceBankwasfoundedbyfourrepu-tableinternationalshareholdersinajointefforttosupporttheLiberianbankingsectoringeneralandthecountry’smicrofinanceindustryinparticular.
ABL’smissionistobecomethebankofchoiceforthelowandmiddleincomestrataoftheLiberianpopulation,andthecountry’sleadingprovideroffinancialservicestomicro,smallandmediumenterprises.Withinjustoverthreeyearsofopera-tions,theBankhassignedupmorethan80,000clients,demonstratingthatitsproductofferingofloansanddepositserviceshashittherightspotinthisstillunderservedmarket.
ABLprovidesmicroandSMEloanstoeligiblebusinessowners.Regardingbankingservicescurrentandsavingsaccountaswellasatermdepositoptionareoffered.AllaccountscanbeheldinLiberianDollarandUSDollar.
Overview
Products
Capital MonroviaInhabitants 3.5mArea 111,369km2
GDP per capita (US$) 247Key industries Agriculture
Shareholders
Monrovia(5)
AccessHolding|AnnualReport2011
13,3%17,7%
13,3%
55,7%
Key data 2011
Totalassets(EUR) 15.4mGrossloanportfolio(EUR) 9.6mNo.ofloansoutstanding 4,798Portfolio-at-Risk 30daysin% 1.32%Totalcustomerdeposits(EUR) 450,639No.ofdepositaccounts 402No.ofstaff 237No.ofbranches 4
AccessBank Tajikistan
Businessdevelopment
Contact
Tajikistan’sfinancialsectorisnotyethighlydevelopedbutsincetheendoftheCivilWarin1997,politicalstabilityandforeignaidhaveallowedthecountry‘seconomytogrow.Never-theless,Tajikistan’spercapitaGDPisbyfarthelowestintheCISregion.AccessBankTajikistanisajointventureofAccessHoldingandthreeofitspartnerswithlong-standingexperienceinthesector:theEuropeanBankforReconstructionandDe-velopment(EBRD),theInternationalFinanceCorporation(IFC)andKfWEntwicklungsbank.Thebankwasinauguratedon29March2010andhasitsheadofficeaswellasfourbranchesinthecapitalDushanbe.
AccessBankTajikistan’svisionistobecometheleadingmicrofinancebankinTajikistanandtosetnewstandardsfortheTajikbankingindustryintermsofprofessionalism,transpa-rencyandefficiency.Bydeliveringappropriatefinancialservicestoitstargetgroup,thebankseekstocontributetoprivatesectorgrowthandinvestment,thushelpingtocreatenewbusinessandemploymentopportunitiesfortheTajikpopulation.Inordertofacilitateaccesstofinancealsoinotherpartsofthecountry,AccessBankTajikis-tanaimstodevelopastrongregionalpresenceinthecomingyears.
Operatingunderafullbankinglicense,Access-Bankoffersabroadrangeoffinancialservicestomicro,smallandmedium-sizedenterprises(MSMEs)inTajikistanaswellasthegenerallowerandmiddleincomestrataoftheTajikpopulation.DespiteitscurrentfocusonMSMElending,thebankwillsuccessivelyintroducearangeofotherfinancialproductsincludingagricultural,housingandconsumerloans,aswellasforeignexchangeandotherbankingservicesinthecomingyears.
AccessBank Tajikistan61/1Firdavsistr.Dushanbe,734061RepublicofTajikistanPhone:+992372319824
Overview
Products
AccessHolding|AnnualReport2011
32
Capital DushanbeInhabitants 7.6mArea 143,100km2
GDP per capita (US$) 820Key industries Productionofaluminum growingofcotton
Dushanbe(4)
Shareholders
12,0 %
52,0 %
18,0%18,0%
Key data 2011
Totalassets(EUR) 3.9mGrossloanportfolio(EUR) 380,123No.ofloansoutstanding 407Portfolio-at-Risk 30daysin% N/ATotalcustomerdeposits(EUR) 83,821No.ofdepositaccounts 1,433No.ofstaff 84No.ofbranches 1
Stand No. 7393, Ground Floor, ChaindaplaceoffCairoRoad,Lusaka.Monday-Friday08:00-16:00Tel:(+260)211220835/36/38/40Email:[email protected]
AB Bank Zambia
Businessdevelopment
Contact
ABBankZambia(ABZ)openeditsdoorsinOctober2011andistheseventhandcurrentlyyoungestmemberoftheAccessBanknetwork.ItwasfoundedbyAccessHoldingincollabora-tionwithfourofitslongstandingpartners:KfWEntwicklungsbank,theInternationalFinanceCorporation,theDutchdevelopmentfinancein-stitutionFMO,andtheBelgium-basedImpulseMicrofinanceFund.
ABZaimstoevolveintooneoftheleadingpro-vidersoffinancialservicestothistargetgroupinZambiaandtosetindustrystandardsintermsofthespeed,easeandqualityofMSMEbanking.ABZ’sbranchnetworkiscurrentlylimitedtoLusakabutthebankplanstoexpandtootherregionsinthecomingyears.Ithashadagoodstartofoperations.
ABZoffersarangeofloananddepositproductsfocusingonthecoreclienteleofmicro,smallandmedium-sizedenterprisesaswellasthegenerallower-/middleincomegroupsofthecountry.Bankingservicesincludetermdeposit,savingandcurrentaccountsaswellasasavingplanandpaymentservicessuchasasalaryproject,mobilepaymentandmoneytransfersystems.
Overview
Products
Capital LusakaInhabitants 13.5mArea 752,618km2
GDP per capita (US$) 1,253Key industries Agricultureand copperindustry
Lusaka
Shareholders
35
AccessHolding|AnnualReport2011
12,5%12,5%
12,5%
51,0%
12,5%
Corporate Social Responsibility in the Holding
Asaninternationallyoperatingbanknetwork,wefeelthatourresponsibilityismanifold.Asaconsequencewehaveovertheyearselaboratedanindividualandcomprehensiveprofileofthisresponsibility.ThisprofilecomprisesallactivitiesandguidelinesinareasinwhichAccessHoldingisdeterminedtotakeonarolethatgoesbeyondcompliancewithlegalobligationsandbasicethicalstandards.
AccessHoldingattributeshighimportancetoconsideringandactingintheinterestofourdifferentstakeholders(suchasclients,commu-nities,shareholders,theenvironment)inordertodobusinessinasustainableandresponsibleway.Weareawarethatweoperateincountrieswhereitcanseemespeciallyimportantthattheprivatesectortakesonitsresponsibilitytocontributetosustainabledevelopment.Ournetworkbanksthereforenotonlyconsidertheirprofitabilityandgrowthbutarecommittedtotheinterestsofthesocietiesandenvironmentstheyareoperatingin.Assuch,ourbanksnotonlystandoutbecauseoftheirmicrofinance-bankingexpertisebutalsobecausetheirbusi-ness modelisbackedbyacorporateculturethathasastrongethicalandmoralbasis.
OperatinginthemicrofinancesectormakesitespeciallyimportantforAccessHoldingtograntthesustainableincorporationofresponsiblepracticesintobusiness.Wearedoingbusinessindevelopingcountriesandtargetsocialgroupsusuallyexcludedfromthetraditionalbankingsystem.Thereforeourengagementisfocusedon:
Our internal guidelinesThecommercializationofmicrofinanceisincreas-inglyaccompaniedbytheriskthatsomeplayersinthemarketareseekingshort-termprofitondispenseofthecustomer.Thelatterismoreandmorethreatenedbyover-indebtednessandotherimmoral/unethicalpractices.ThereforeAccessHoldingisstressingitsdedicationtoresponsiblefinance.
ItisatthecoreofAccessHolding’sCSRphilosophytomakeacontributiontowardsasustainabledevelopmentofthemicrofinance
industryworldwide.Consequentlyprotectingtheclientbylendinginaresponsiblefashionisoneofourkeyprinciples.
Inaddition,itisanintegralpartofAccessHolding’sCSRphilosophytomakeacontributiontowardsasustainabledevelopmentofthemicrofinanceindustryworldwide.Consequentlyprotectingtheclientbylendinginaresponsiblefashionisoneofourkeyprinciples.
Thefollowingguidelineshavebeenformulatedonthisbehalfandareofforemostimportancenotonlyontheholdinglevelbutforeachindividualbank.Inordertoavoidover-indeb-tednessandprotectourclientsweare:
buildinglong-termrelationshipswithour clients;
conductingathoroughandintegral analysisofpaymentcapacitywhichalso includesforexampletherespectoffamily relatedpaymentobligations;
makingsureinstallmentsrepresentonlya limitedcomponentoftheborrower’s monthly‘freecashflow’,
guaranteeingthatreceivingloansisnot conditionalontheclientdepositingmoney inthebank
Responsiblecollectionofoverdue installments
Endorsing the SMART CampaignAccessHoldingisstrivingevernewwaystoemphasizetheimportanceofavoidingover-indebtedness.Assuch,weareaconvincedfollowerandendorseroftheSMARTcampaignwhichissupportedbyallbanksinthenetwork.TheSmartCampaignisaglobalefforttounitemicrofinanceleadersaroundacommongoal:tokeepclientsasthedrivingforceoftheindustry.Acertificationprogramisinprogress.
SmartMicrofinanceencompassesthefollowingcoreClientProtectionPrinciplestohelpmicro-financeinstitutionspracticegoodethicsandsmartbusiness:
Appropriateproductdesignanddelivery Preventionofover-indebtedness Transparency Responsiblepricing
36
Our Philosophy
Responsible Lending/Client Protection
AccessHolding|AnnualReport2011
“All clients of AccessBank should bebetter off using the bank’s products than not.”
Fairandrespectfultreatmentofclients Privacyofclientdata Mechanismsforcomplaintresolution
Inordertodemonstratethe(long-term)impor-tanceattributedtoresponsiblelendingandclientprotection,AccessBankinAzerbaijanhasalreadybeenauditedbytheSMARTcommitteewiththereassuringresultofbeingextraordinarilygoodatavoidingover-indebtednesscomparedtoindustrystandards.
AccessHoldingisconvincedthatthekeytoanysuccessfulorganizationismotivatedandsatisfiedemployeesthatstriveforexcellence.Thereforeandtosetstandardsinourcountriesofoperationswithofteninsufficientlegalsafetyfortheemployee,weapplythefollowingHRpoliciesacrossthenetworktosafeguardthewellbeingandsatisfactionofourstaff:
Clearjobdescriptionsandopencommuni- cationchannels
Employee-friendlyworkingconditionsand avarietyofmotivationalschemessuch additionalinsurancepackages,team buildingdays,sportsevents,andothers. Employmentopportunitiesforrecent graduates–givingyoung,inexperienced talentstheopportunitytohaveafull- scalejobentryanddeveloptheirpotential
Highlytransparent,meritandperformance basedinternalpromotionpolicies,with manyverticalandlateraldevelopment opportunitiesinalldepartments,anda relativelyfasttransferofresponsibilities.
Employmentoflong-termstaffwith tailoredcareerdevelopmentthrough classroomtraining,trainingonthejob, andsupportfromcolleagues
Performance-orientedpaypackages Promotionofequalopportunities
LivinguptosocialandenvironmentalstandardsisofhighmoralimportancetoAH.WehavedevelopedourownSocialandEnvironmentalManagementSystem(SEMS)toensuresocialandenvironmentalresponsibilitythroughoutthenetwork.TheSMESisbasedonacoresocialandenvironmentalpolicyandprovidesindividualAccessBankswithasetofcoreproceduresandguidelines.TheseSocialandEnvironmentalPerformanceStandards(SEPS)thatAccessHoldingseekstoimplementinallAccessBanksfollowtheInternationalFinanceCorporation(IFC)’sMicrofinanceExclusionListthatforbidsinvestmentsinpotentiallyhazar-dousprojects.Inaddition,AHfollowstheCDCInvestmentCodethatsetsoutgeneralguidelinesforethicalinvestmentpractices.Itrequiresre-sponsiblebusinessmanagementofenvironmen-tal,socialandgovernance(“ESG”)mattersandalsofeaturesanExclusionList,whichspecifiesbusinessesandactivitiesinwhichCDC(andtherebyAH)willnotinvest.
Indaytodaybusinessoperations,AHiscom-mittedtoaresponsibleuseofofficesuppliesandotherscarceresourcessuchaswaterandenergy.
37
Human Resources
Corporate Social Responsibility in the Holding
EachAccessBankhasitsindividualwayoftranslatingthecorporateprinciples.Allofournetworkbanksstrivetobegoodcorporateciti-zensbygivingbacktothecommunitiestheyareoperatingin.Besidesworkinghardontheirprofitability,thefollowingtwoexamplesfrompracticeshowAB’scommitmenttobeingagoodcorporatecitizen.
ABA: Building inclusive communitiesAccessBankinAzerbaijanplaysanimportantrolenotonlyintheeconomicdevelopmentoflocalcommunitiesacrossthecountry.Italsosupports,sponsorsandencouragesstafftobecomeinvolvedincharitableandcommunityprojectsthatbothbenefitandpromotetheevo-lutionofinclusivelocalcommunities.Examplesofsuchprojectsin2010included:sponsoringtheGirlsLeadingOurWorld(GLOW)summercampforschoolgirlsfromtheregionsofAzer-baijan,withparticipationofanAccessBankfemalemanager;distributionoffoodtoneedyfamiliesfortheholidaysbyBankstaff;regularvisitsbystafftovarioushomesfororphans,disabled,pensionersandveteranstodistributegoods,andprovideentertainmentandcompany;sponsorshipandjudgingoftheAzerbaijaniportionofthe‘WritingOlympics’,aninternatio-nalEnglishlanguagewritingcompetition;sponsorshipofthe‘SeeinginColor’artexhibi-tionandworkshopforyoungAzeriartistsorganizedbytheBritishCouncil;financingandprintingofahandbookfordoctors,caregiversandrelativesofpeoplewithDown’ssyndrome;aswellasmanymore.Besidesfromhavingastrongfocusoncommunitydevelopment,ABAisalsotheonlybankinAzerbaijantosubscribetotheUnitedNationsGlobalCompact.
ABT: Children dental care campaignAccessBankTanzaniasponsoredthelaunchofacampaignfocusingonChildrendentalcare.ItwasheldincapitalDaresSalaamonthegroundsofalocalschool.TheeventwhichwassponsoredbyABTwasattendedbyfiveschools.Itreachedasignificantaudienceof500studentsandtheirteachers.Thecampaignfocusedonconvincingchildrentobrushtheirteethonaregularbasistoavoidallkindsofdentaldiseases.InherspeechMissJaneth,managerforMarketingandPublicRelationsat
ABT,advisedthechildrentotakegoodcareoftheirteethiftheywanttopursueasuccessfulcareerinmarketingorteaching.Mr.Kalabu,thechairmanoftheforumthankedtheABTforitssponsorship.ThecampaignistobecontinuedandABTwillsponsormoresimilarcampaignsacrossdifferentschoolsinTanzania.
ABM: Towards a cleaner environmentAccèsBanqueisveryconsciousaboutitssocialresponsibilityandhasdefinedacorefocusareaforitsengagement.ABMwantstomakeacontributiontoprovidingahealthyandcleanenvironmenttothepopulationoftheislandandthereforeparticipatesinthecleanupoftheareastheyareactivein.AssuchABMhasrecentlydonatedcleansingkitstoapproxi-mately40fokontany(traditionalMalagasyvillages).Eachkitcontainedacombinationofboots,wheelbarrows,bladesandgrates.InthefirstphaseofthisenvironmentaloffenseonlyfokontanyssituatedclosetoanAccèsBanquebranchhavereceivedcleansingkitswhereasanestimatedpopulationof80,000peoplecouldbenefitfromtheproject.From2012on,ABMisgoingtoenlargeitsfocusandwillreachouttoevenmorevillages.Inadditiontothisenviron-mentalinitiativeABMalsoinvestsintheareaofeducation.Assuch,atthebeginningofthelastschoolyear,alargenumberofschoolkitscontainingexercisebookshavebeendistribu-tedtoover40publicprimaryschools.30,000pupilswerereachedbythisinitiative.
38
Communitydevelopment/ CSR on site
AccessHolding|AnnualReport2011
ABL: Empowering children in the communityThroughanumberofmeasuresABLstrivestoemphasizethespecialimportanceofchildrentotheircommunities.Onthisbehalf,ABLor-ganizesandsponsorsanumberofeventsthattargetchildrendirectlysuchasthefollowing:
Adrawingcompetitionwasorganizedand carriedoutbyABLstaffatHeadoffice. 15schoolkidscamefrom12different schoolstodrawwhattheythinkabouta bankandexplaintheirdrawings.The winnersgotprizesandwerefeaturedin ABL’S2011Calendar.Allthekidswere givenatouroftheABLfacilitybyourstaff, showingthemhowbankingworks.This wasdonetoeducateLiberiankidsabout theimportanceofbanking.
AFootballTournamentwashostedfor around200schoolkidswhoseschoolsare bankingwithABL.Theeventwascoordi- natedby10ABLstaffthatplayedtheroles ofreferee,linesmenandmatchcommission- ers.Winnersweregivenprizesandwere encouragedtotaketheireducation seriously.ABLaimstodiscouragekidsin thecommunityfromearlyschooldropout.
MotherWleh‘sOrphanageconsistsof46 childrendesperatelyinneedofhelp;it wasvisitedbyABLstaffonChristmas.Kids weregivenChristmaspresentsliketoys andclothes.Theorphanagewasgiven detergentsanddisinfectants,beddings andfoodforthechildren.
39
AccessBank‘s Clients
toaskcustomerstopayinadvancebeforedeliveringthefullorder.Thisinturnlimitedthenumberofpotentialclients.
ThroughafirstloanofUSD800fromAccessBankLiberia,Mr.Wellingtonwasabletopre-financehispurchaseswhichhelpedhimtoincreasehissales.DuetohisincreasingincomeafterthefirstloanandanexcellentrepaymentbehaviorhereceivedarepeatloanofUSD1,400foralongermaturity.Thisenabledhimtobuymoreshovelsandwheelbarrowsforhisworkforcewhichincreasedfrom10to35.HerecentlyopenedathirdproductionpointinSinkor,Mon-rovia,andisabletopurchasehigherquantitiesofcementatalowerprice.Mr.Wellingtonhasalsostartedtoproduceblocksofdifferentdesignstomeettheincreasingcompetitionbyawiderchoiceofproductsandbetterquality.AccessBankLiberia,saysMr.Wellington,hashelpedmetogrowmybusinessandgavemetheconfidencetothinkbigger.
40
1. LiberiaHenry Wellington, Producer of Cement Blocks
AccessHolding|AnnualReport2011
AccessHoldinganditsnetworkbanksaregui-dedbyresponsibleandsustainablebusinesspractices.Bybuildingandmaintainingacloserelationtotheirclientele,AccessBanksareinthepositiontotailortheirproductsandservicestotheneedsofthetargetgroup.Thefollowingselectedclientstoriesprovideagoodimpressionofthepositiveimpactsofourbusinessapproachonthosemicroandsmallentrepreneursthatweserve.
HenryWellington,34yearsold,startedtheproductionofcement12yearsagoafterhisgrandfatherhadpassedontohimtheexperi-enceandpassionforthisprofession.TheincomegeneratedfromthebusinessallowedhimtofinancehisstudiesinAccountingattheUniversityofLiberia.However,Mr.Wellingtoncouldhardlymeetthedemandofhisgrowingcustomersontimebecauseofhisfinancialcon-straintsthatlimitedthepurchaseofrequiredcement.Asaconsequencehewasoftenforced
AgnesJacobMollelisahard-workingbusinesswomangrowingmushroomsandraisingpigsinherpremisesinMbesibeach,aresidentialareawithemergingsmallbusinessactivityaround15kmoutsideDaresSalaam.A56-yearoldwidowofMasaioriginwithtwochildrenlivingabroad,AgneshasjustreceivedhersecondloanfromAccessBank’sKijtonyamabranch,whichhasexcellenttransportlinkstothenort-hernperipheryofDaresSalaam.BothloansamountedtoTZS1.6million(around900€)each;thefirstwasusedtoconstructmoresha-desforherpigs,whereasthesecondservestopurchasealargernumberofpigsandaddmoreshelvesforhermushrooms,whichAgnessellstosupermarketsandanumberofindividualcustomers.
IntheNorthernAzerbaijantownofShabran,IlhalmaAlyevaworkswithsevenotherwomenfromhercommunitytomakecarpetsinthetra-ditional“Shirvan”style.Ittakesthreetofourwomentwomonthstoproducethehighqualitycarpet.Whilethishighleveloflaborensuresanexcellentquality,italsomeansthatanexpen-siveproductisbeingmade.Findingbuyerscantakesometime,leavingMs.Aliyevawithlittleincomesheneedstopurchasethematerialsforhernextcarpet.WithloansofAccessBank,Ms.Aliyevahasbeenabletopurchasetheneededmaterialsandalsorepairherloom.Thishasledtoanincreaseinsalaryforthewomenworkingforher,thesepositionsbeingsomeoftheonlypositionsavailabletowomeninhertown.
41
2. Tanzania Agnes Jacob Mollel, Pig Farmer
3. AzerbaijanIlhalma Aliyeva,Carpet Maker
43
Design:MarthaWilleyPhoto archive:StephanieZickertEditorial content:LauraSymma
TheManagementBoardofAccessMicrofinanceHoldingAGisresponsibleforthecontentspresentedinthisdocument.
AccessHolding Management Report 2011
AccessMicrofinanceHoldingAG(AccessHolding),aJointStockCompanyinaccordancewiththeGermanJointStockCompanyAct,basedinBerlin,Germany,isacommercialmicrofinanceholdingcompany.Itsobjectiveistobuildupanetworkofmicrofinance-orientedbanksandtodevelopthesethroughacombinationofequityfinance,holdingservices,andmanagementassistancerenderedbyoneofitsshareholdersandtechnicalpartnerLFSFinancialSystemsGmbH(LFS),Berlin,Germany.AccessHoldingholdsacontrollingstakeinfivefinancialinstitutions,AccessBankTanzania(ABT),AccessBankLiberia(ABL),ABMicrofinanceBankNigeria(ABN),AccessBankTajikistan(ABTJ)andABBankZambia(ABZ).TogetherwithAccessHolding,theseentitiesformagroup,forwhichconsolidatedfinancialstatementsareprepared.TheinvesteecompanyABTisconsolidatedasof31.October2011,whichisthedateonwhichAccessHolding’sownershipstakeinthecompanyincreasedtoabove50percent.
Inaddition,AccessHoldingholdsminoritystakesintwobanks–AccessBankAzerbaijan(ABA)andAccèsBanqueMadagascar(ABM).Theseinstitutionsareclassifiedasassociates,i.e.entitiesoverwhichAccessHoldinghassignificantinfluencebutnocontrol.Accordinglytheseentitiesarenotfullyconsolidatedinthefinancialstatementsbutvaluedatequity(section5ofthisreport).ItisexpectedthatAccessHoldingwillacquireamajoritystakeinAzerbaijanandMadagascarduring2012.Allnetworkbanks,regardlessoftheirstatusassubsidiariesorassociates,areincludedinthegeneralbusinessreportingasprovidedinsections2-4,6and7ofthisManagementReport.ThispartofthereportingdoesnotincludetheassetsandliabilitiesofAccessHoldingitself,nordoesitmakead-justmentsforothershareholdersoftherespectivenetworkbanks.ThesesectionsarethereforenottobereadasconsolidatedfinancialstatementsbutastheaggregatedassetsandliabilitiesoftheAccessHoldingnetworkbanks.
Asinpreviousyears,significantprogresswasmadeinthedevelopmentofthenetworkduring2011.ABZopeneditsdoorstothepublicinOctober,becomingtheseventhAccessBank.By31December2011,totalassetsoftheAccessBanknetworkgrewtoaboutEUR480million(2010:EUR408million);theloanportfolioincreasedtoEUR352million(2010:EUR289million)anddepositstoEUR188million(2010:EUR146million).Creditqualityremainedexcellent,withanetwork-widePortfolio-at-Riskgreater30days(PAR 30)of1%andtotalwrite-offsbelow1%ofthenetwork’syear-endgrossloanportfolio.
Threeofthesevenbanks(ABA,ABN,andABM)closedtheyearwithaprofit.Fuelledmainlybyconti-nuedexcellentperformancesofABAandABN,theaverageweightedreturnonequityforthenetworkbankswas17.9%(2010:33.1%).AccessHoldingposteditsfourthprofitableyearinarow.
Groupintegrationwasstrengthenedthroughstaffexchangeprogrammesbetweennetworkbanksandintensiveknowledgeexchangebetweennetworkbankmanagers(mainlyviacentralworkshopsinareassuchasCredit,Retail,Accounting,InternalAudit,ITorHumanResources).Thebuild-upofheadquarterfunctionscontinuedincooperationwithAccessHolding’stechnicalpartner,LFSFinancialSystems.BothLFSandAccessHoldingmovedintonew,significantlylargerofficepremises,thuscreatingsufficientphysicalcapacityforfurthergrowth.
Morethanthreeyearshavepassedsincetheonsetofthe2008financialcrisisandhopeswerehighthat2011wouldbringaneconomicupswing.However,2011wascharacterizedbytheEurozonedebtcrisis,increasingfoodandoilpricesanddevastatingnaturaldisasterssuchastheTsunamithathitJapan.
However,forAccessHoldinganditsnetworkbanksthesituationoftheworldeconomyhadonlylimitedimplication,asmostoperatingcountriesarelessintegratedintotheglobalfinancialmarkets.Secondaryeffectsfromglobalcrises(e.g.viareducedfundingsupplyfrominternationalfinancialinstitutions)cannotberuledout,butofgreaterimportanceisthespecificeconomicandpoliticalsituationinthecountriesofoperation,whichwillbedescribedbelow.
44
1 Introduction and summary
2 Political andeconomic environ-ment
AccessHolding|AnnualReport2011
Whilemicrofinancemarketsinsomecountriesorsub-regions(e.g.inIndia)havereachedorapproachedsaturationafteryearsofstronggrowth,globalmarketcoveragelevelsremainstilllowgiventhenumberofcountrieswhichareyetlackinganadequatesupplyofsimpleandaffordableaccesstofinancialproducts.
Comparedtoconventionalcommercialbanks,thebusinessofAccessHolding’snetworkbanksisconsideredtobelessvulnerabletoexogenousshocks.Thispremiseisbasedonthewidelyacceptednotionthatmicrofinancelendersarecomparativelyresilienttomacroeconomiceffects,duetotheirhighlyatomisedloanportfoliosandthemicroenterpriseclientele’spredominantfocusonsellingbasicneedsitemsonthedomesticmarket.1AccessHolding’snetworkbanksareusingarigorouson-siteduediligencemethodologytoassesseachborrowerindividually,andtailortheirloansizesandmaturitiesbasedonthisassessment.Inthisway,theyhavebeenabletosustainexcellentassetquality.Moreover,continuedsupportisensuredthroughverystrongshareholdersofAccessHoldingandthenetwork,whocontributetoaconductiveenvironmentforgrowthandanoverallfavourabledevelopment.
Nevertheless,nationaleconomicorpoliticaleventsintherespectivecountriesdohaveacertainimpactonournetworkbanks,especiallythosewithalargershareofSME(SmallandMedium-sizedEnterprises)clients,whichtendtohaveahigherexposuretoexternalshocks.Economicrecessionorpoliticaluncertaintymaydampenloandemand,reducethesupplyof(and/orincreasethecostof )refinancingfunds,andincreasecompetitionasupmarketbanksaremovingdownmarkettoseeknewbusiness.Theextentofsuchimpactsvariesobviouslyfromcountrytocountry,andcanthushardlybegeneralisedwithoutover-simplification.Wewillthusdescribetheminmoredetailintheindividualcountrysectionsbelow.
Theexistingpoliticalorderremainedstablethrough2011,withnonationalelectionsorchallenges.Thesameisanticipatedfor2012andbeyond,withthenextpresidentialelectionsetfor2013whichPresidentIlhamAliyevisgenerallyexpectedtocontestandwin.InDecember,TurkeyandAzerbaijansignedanagreementforconstructionofa2,000kmgaspipelinetotransportAzerbaijan’snaturalgastoEuropeanmarkets.Thefirstdeliveryofgasisnotexpecteduntil2017,butthisagreementsupportsthegeopoliticalimportanceandeconomicstabilityofAzerbaijanforatleastthenextdecadewhileoilproductionbeginstotaperoff.Thiscontractionwasalreadyfeltin2011,withan11%declineinoilproduction,dampeningGDPgrowthto0.1%for2011accordingtotheStateStatisticsCommittee,comparedto5%in2010.Non-oilGDPpostedahealthygrowthof9.4%in2011,with5.8%growthpostedintheagriculturalsectorthankstogoodharvestsin2011,followingweakharvestsin2010–thisimpactedpositivelyonmostruralbusinesses.However,nominalGDPgrewbyamuchstronger20.4%,increasingtoAZN50.1billion(USD63.7billion)fromAZN41.6billion(USD52.9billion)in2010,boostedbyrisingglobaloilprices,thatmorethancompensatedforthereductioninoilproduction.Thishelpedresultinanincreaseinstatebudgetrevenuesof37.7%toAZN15.7billion(USD20.0billion),comparedtoAZN11.4billion(USD14.5billion)in2010,and30.8%inexpenditurestoAZN15.4billion(USD19.6billion)in2011,comparedtoAZN11.8billion(USD15.0billion)in2010.InflationedgedupslightlywithCPIofficiallyreportedat7.9%,comparedwith5.7%in2010and1.5%in2009.
ThehigheroilpricesfedthroughtoanincreaseinthetradesurplustoUSD16.8billion(USD14.8billionin2010)onexportsofUSD26.6billionandimportsofUSD9.8billion.ThissupportedthestabilityofthecurrencyandtheAZNremainedvirtuallyunchangedagainstthelocalreferencecurrency,theUSD,atAZN0.7865versusAZN0.7979at2010-end.Energyexportsshouldensurecontinuedeconomicstabilityinthemedium-term,buttheinherentvolatilityofenergypricesandslowingoilproductionbothreinforcetheneedforeconomicdiversification.Otherconcernsremaincontrolofinflationarypressures,improvingbusinessenvironmentandspreadingthebenefitsofoilincome.
Azerbaijan
45
1Seeexplanationsinchapter8(Risk).ForempiricalunderpinningseeGonzales(2007),‘ResilienceofMicrofinanceInstitutionstoNationalMacroeco-nomicEvents:AnEconometricAnalysisofMFIassetquality’,MixDiscussionPaperNo.1,availableviawww.themix.org
AccessHolding Management Report 2011
Thedevelopmentofthebankingsectorreflectedthatoftheeconomy,withsomebanksfaringbetterthanothers.Totalbankingassetsincreasedby7.3%(toAZN14.3billionfromAZN13.3billion)in2011–whilethetotalloanportfolioincreasedby5%(toAZN9.0billionfromAZN8.6billion)–laggingbehindthe2010growthfigureof14%.Depositsincreasedbyafasterrateof29%toAZN6.7billion.AsaproportionofGDP,totalbankingassetsdecreasedto28%(32%in2010),thetotalloanportfolioto18%(21%in2010),anddepositsincreasedto13%(12%in2010),representingrelativelylowlevelsofbankingpenetration.Themajoritystate-ownedInternationalBankofAzerbaijan,continuestodominate,butsawa9.3%decreaseinitstotalassetsanda15%dropinitscreditport-folioin2011,reducingitsmarket-shareoftotalBankingAssetsto35%andofLoanPortfolioto35%(42%and43%respectivelyat2010-end)
In2011thebankingsectorcontinuedtobenefitfromthethree-yeartaxexemptiononcapitalisedprofit,introducedfrom1January2009tohelpstrengthenthesector.WhiletheCentralBankhasbeenadvo-catingconsolidationinthebankingsectorformanyyears,littleconsolidationhasoccurredandthenumberofbanksat2011-endstoodat44(comparedwith45at2010-end).
AccessBankcontinuedtooutperformthesector,butlesssoin2011thaninyearspastastheeconomicslowdownimpactedonthelowerrungsoftheeconomy.Intermsoftotalbankingassets,AccessBank’smarketsharedecreasedto2.7%from2.8%at2010-endwhiledroppingtoeighthpositionfromseventhoutof44banksinthemarket.Atthesametime,theBank’smarketshareintermsoftotalloanportfolioincreasedfrom3.0%to3.3%whiledroppingtoseventhpositionfromsixth.InagriculturallendingAccessBankremainedthemarketleaderwith30,000clientsand7%shareofthetotalagriculturalport-folioofAzerbaijan’sbankingsector.Apartfromthebanks,approximately27non-bankcreditorganiza-tionsareengagedinmicrofinance.TheAzerbaijanMicrofinanceAssociation(AMFA)collectsdatafor30institutionsinvolvedinmicrofinance(consistingof18ofthesenon-bankfinancialinstitutionsand12banks,includingAccessBank).ThemicroloanportfoliooftheseinstitutionsstoodatUSD646millionat2011-end,givingAccessBank28%marketshare(36%at2010-end),makingAccessBankbyfartheleadingmicrofinanceinstitutioninAzerbaijan,especiallywithsmallfarmerhouseholds.
Somechangesinpoliticalcircumstancescanbereported.Attheendof2011,anewprimeministerwaschosenaspartoftheroadmaptowardspoliticalstabilization.ThisroadmapalsoforeseesthereturnoftheformerPresidentMarcRavalomanana.AnattempttoreturnfromhisexileinSouthAfricawasre-centlystoppedinthelastminutebytheauthorities.InthisrespecttheSADC(SouthernArfricanDeve-lopmentCommunity)isnowdemandingtherevisionofamnestyrights.Ravalomanawassentencedtoprisonandforcedlabourinabsence.Signsofrisingdissatisfactionofthepopulationwiththepoliticalandeconomicsituationmanifestthemselvesindemonstrations,strikesofcourtsandstudents,andariseincriminality.
OfficialnumberssuggestanincreaseofMadagascar’sGDPby0.6%in2011.Theincreaseismainlydrivenbytheminingsectorwhilekeyindustriessuchastextileandagriculturestagnateordeteriorate.Theperceptionbythepopulationisthattheeconomycontractedin2011.Officialinflationin2011waspublishedat7%,whileactualinflationisestimatedcloserto10%.Theriskofafurtherriseininflationisdrivenbyenergyandfoodprices.Energypricesforindustrialclientswillrisein2012,whilethedis-cussiononthestate-subsidyoffuelpricescontinues.Therealpriceisestimated10%abovethepricelimitset,andtheenergysectorcomplainsofnon-ordelayedpaymentsofagreedsubsidies.
Despitethedifficultpoliticalandeconomicsituation,Madagascarisimprovingitsbusinessenvironment.The2012IndexofeconomicfreedomscoresMadagascarasthe75thfreestcountryinthe2012Indexemphasisingimprovementsinbusinessfreedomandthemanagementofgovernmentspending.Madagas-carisranked6thoutof46countriesintheSub-SaharanAfricaregion,anditsoverallscoreisabovetheworldaverage.2
46
Azerbaijan (con’t.)
Madagascar
AccessHolding|AnnualReport2011
2http://www.heritage.org/index/country/madagascar
Thebankingsector’stotalportfoliooutstandingincreasedbyonly3.3%(Jan-Nov2011)toMGA2.0trillion(EUR687million),whiledelinquenciesincreasedfrom12.7%to13.6%inthesameperiod.Theoveralldepositandliquiditypositionofthebankingsectorincreased,causingtreasuryshort-termsratestodecrease,whilelong-termratesremainstableorincreaseslightly.Totalassetsofthemicrofi-nancesectorhaveincreasedbyMGA52.9billion(EUR18.0million),anincreaseof28.8%throughouttheyeartostandatMGA236.2billion(EUR80.2million)attheendofSeptember2011.ThegrossloanportfolioincreasedtoMGA146.4billion(EUR48.7million)inSeptember,a31.3%increaseascompa-redto2010.Portfolioqualityhasslightlyrecoveredduetointenserecoverymeasures.3
Inthefourthquarterof2011,theBankofTanzania(BoT)projecteda6%GDPgrowthfor2011.InthemostrecentMonetaryPolicyStatement(June2011)oftheBoT,theforecastfor2012hasbeenraisedto7.2%.AnalystshoweverpredictthatmonetarypolicytighteningalongwithweakexternaldemandwillslowdowntherealgrowthoftheeconomywithaforecastedrealGDPgrowthdownto2-3%YoYbytheendof20124.
Inflationhasreachedunusuallyhighlevelsin2011,afterseveralyearsofrelativepricestability.Thecontinuousincreasesincethebeginningoftheyearendedupat19.8%inDecembermainlyduetosignificantincreasesinfoodpricesandenergy.AnalystsexpectTanzania‘sinflationratetostabilizeorincreaseslightlyfollowinganelectricitytariffincreaseinthefirstquarterof2012beforeitstartsgoingdown.
Followingtheinflationtrend,theTanzanianShilling(TZS)depreciatedagainsttheUSDollar(USD)andagainsttheEuro(EUR)untilmid-November.TheTZS/USDrate,whichwas1,643asattheendofSep-tember,exceeded1,850inOctoberbeforereturningtoalevelof1,550-1,600.TheTZS/EURrate,whichwas2,215asattheendofSeptember,camecloseto2,500inOctoberbeforereturningtopreviouslevels(around2,000-2,050)attheendoftheyear.
Thebankingsectorcontinuedtogrowduringtheyear2011.Thetotalnumberofbanksincreasedto45from42in2011,whilethenumberofbranchesincreasedto498from464.Threenewbanks,namelyAdvansBank(T)Ltd,EFCTanzaniaM.F.CLtdandFirstNationalBank(T)Ltd,startedoperations.EquityBank(T)Ltd,CovenantBankforwomenandAmanaBankLtdweregrantedprovisionalbankinglicenses.GeneralcompetitionespeciallywithintheSMEsectorisgettingstiffer,althoughonlyoneofthemarketentrants(Advans)hasabusinessmodelthatisbroadlycomparabletoAccessBank’s.
AccordingtotheTanzaniaBankingSurvey2011,AccessBankwaslisted12thintermsofmarketshare(1.9%).
TheaforementionedBoTinterventioninmid-OctobertostopthedepreciationoftheShillingandreduceliquidityinthemarketprovokedadramaticincreaseininter-bankovernightinterestratesfrom8%on30Septemberupto36%inthemiddleofDecember 5.Thefinaldaysoftheyearhaveseenaslightcoolingdownoftheinterbankmoneymarket,withratesfallingto33%,atrendwhichcontinuedinearly2012.Attheendoftheyear,devastatingfloodshitthepopulationofDaresSalaam.AccordingtoTMA(Tanza-niaMeteorologicalAgency),theseweretheheaviestrainsTanzaniahasexperiencedsinceindependencein1961.Hundredsofpeoplelivinginthecity‘svalleyshavebeenlefthomeless.ThishasalsoadverselyeffectedloandisbursementsandlendingarrearsinDecember(seeparagraphonbusinessdevelopmentbelow).
ThepoliticalsituationwithinTanzaniaremainsratherstable.Despitesomesignsofpublicdissatisfactionoverthedisputedoutcomeofthe2010elections,therehavebeennosignificantprotests(letalonegene-ralstrikes)thatwouldhaveunderminedthere-electedgovernment.
FreedomhouseratesTanzaniaaspartlyfreein2011whereasthedemocracyindexonlyplacesit90thoutof163countries,classifyingitasahybridregime.
Tanzania
47
3Allinformationoneconomicdevelopment,bankingandmicrofinancesectortakenfromCentralBank4EconomicinformationusedinthissectionistakenfromBankofTanzania(BoT)5Seedailymoneymarketratesatwww.bot-tz.org
AccessHolding Management Report 2011
Nigeriahaswitnessedatumultuousyear2011.Thepresidentialelectionfinallytookplaceon16April,2011havingbeenpostponedfrom9April.TheelectionfollowedacontroversyastowhetheraMuslimorChristiancandidateshouldbeallowedtobecomepresidentgiventhetraditioninNigeriatorotatethetopofficebetweenthetworeligions.GoodluckJonathan(aChristian)wasdeclarednewpresidenton19April.FollowingtheelectionwidespreadviolencetookplaceintheNorthern,Muslim-dominatedpartofthecountry.
Inthecourseoftheyear,Nigeriawasshakenbyterroristmotivatedviolence.AmongothersasuicidebombingattackonUNheadquartersinAbujakilled23people.RadicalIslamistgroupBokoHaramclaimedresponsibility.Followingthebombing,atleast63peoplearekilledinbombandgunattacksinthenorth-easterntownofDamaturu.Nearly70peoplearekilledindaysoffightingbetweensecurityforcesandBokoHarammilitantsinnorth-easternstatesofYobeandBorno.ViolencereacheditspeakonChristmasDaywhenabombattackkilledabout40people.PresidentJonathanhadtodeclarethestateofemergencytocontainviolencebyBokoHaram.
Nigeria’sNationalBureauofStatistics(NBS)6hasannouncedthatinflationhasdeclinedto10.3%y/yinDecember,from10.5%y/yinNovember-October.Thistranslatesintoanannualinflationrateof10.9%y/yin2011,havingdeclinedfrom13.8%y/yin2010.OnanaggregatebasistheeconomywhenmeasuredbytheRealGrossDomesticProduct(GDP),grewby7.68percentinthefourthquarterof2011asagainst8.60percentinthecorrespondingquarterof2010.Ontheexchangeratemarket,theNairaappreciatedagainsttheEuro,afterapeakattheendofOctoberof223NGN/EUR.Itclosedatarateof206.5NGN/EURattheendofDecember.TheexchangeratetowardstheUSDwasoscillatingaround157.5butdepreciatedinDecemberandwasquotedat159.7NGN/EURattheendofthemonth.Attheendofthefourthquarter2011theNIBORratesstoodataround17%andwerethereby30%higherthanattheendofthethirdquarter2011.ItwasthehighestNIBOR(NigeriaInterbankOfferedRate)ratesintheyears2010and2011.Asforthegeneralbusinessclimate,thingsarerelativelystable.WorldBankranksNigeria133thcountryoutof183foreaseofdoingbusiness,samerankasin2010.7
InJune2011theCentralBankofNigeria(CBN)officiallyreleaseditsnewMicrofinancePolicybutnewguidelineswithdetailsarenotyetavailable.Underthenewframework,microfinancebankswouldnowoperateinthreecategories,whichincludeunit,stateandnationalmicrofinancebanks.Aunitmicrofinancebankisauthorizedtooperateinonelocationwithoutbranches/cashcentreandisrequiredtohaveaminimumpaidupcapitalofNGN20m(EUR90,000).ThestatemicrofinancebankisauthorizedtooperateinonestateortheFederalCapitalTerritory(FCT).ItisrequiredtohaveaminimumpaidupcapitalofNGN100m(EUR450,000)andisallowedtoopenbrancheswithinthesamestateortheFCT,subjecttopriorwrittenapprovalbytheCBNforeachnewbranch.Thenationalmicro-financebankisauthorizedtooperateinmorethanonestate,includingtheFCT.ItisrequiredtohaveaminimumpaidupcapitalofNGN2bn(EUR9m)andisallowedtoopenbranchesinallstatesofthefederationandtheFCT,subjecttopriorwrittenapprovalbytheCBN.CurrentlynoMFIisoperatingonanationallevel.
TheoverallbusinessenvironmentinLiberiadevelopedrelativelystableduringtheyear2011.Assuch,allmacro-economicindicatorshaveremainedrathercontinuous.RealGDPgrowthwasestimatedat6.9%in2011comparedto5.1%in20108.Theinflationratehasremainedinsingledigit,averaging8.5percentatendDecember,2011,comparedwith7.5atend-December,2010buthascontinueditsrise(9%attheendofSeptemberagainst7.9%inJune2011).TheUSDappreciatedslightlyto73/76LD/USD(73averageinthelastquarter).
Thecountry’seconomyisstillenormouslydependantonforeignaid:TheAfricanDevelopmentBankap-provedagrantofUSD48millionin2011tofinanceeconomicgovernanceandcompetitivenesssupport.Rebuildinginfrastructureandraisingincomeswilldependongenerousfinancialandtechnicalassistancefromdonorcountriesandforeigninvestmentinkeysectors,suchasinfrastructureandpowergeneration.
48
Nigeria
Liberia
AccessHolding|AnnualReport2011
6AllinformationusedinthissectionistakenfromNBS(NationalBureauofStatistics)7http://www.doingbusiness.org/data/exploreeconomies/nigeria/8AlldatausedinthissectionistakenfromCentralBankLiberia(CBL)’sAnnualReport2011
AccordingtoCentralBankinformation,thebankingsectorrecordedrobustgrowthin2011,continuingthepositivetrendfrom2010.Totalassetsroseby31.3percentin2011,comparedwith2010.Theliquiditypositionisalsostrong,standingat44.0percentatend-December2011,29.0percentagepointsabovetheminimumrequirementof15.0percent.
Sectorsoftheeconomythatrequirelonggestationperiodsandcarryhigherinvestmentrisks,suchasagriculture,havenotbeenadequatelyservedbycommercialbanks.In2011,only3.3percentoftotalbankcreditwenttoagriculture,whichaccountedfor41.3percentofGDP.
Thenumberofmajormicrofinanceinstitutions(MFIs)operatinginLiberiaincreasedto8,from7in2010,withaloanportfolioofUSD9.9millionandaclientbaseof51,683atend-September2011.Duringthesameperiodin2010thenumberofclientsstoodat53,556.Thisrepresentsa3.5percentdeclineandcanbeexplainedbywrite-offsassociatedwithnonperformingclients.Accordingtothelatestnumbersavailable,allgrowthinthemicrofinancesectorcomesfromtheportfoliogrowthofABL.Thebankhasbeengainingmarketshare(52.6%intermsofamount)andhasrecapturedthegroundlostinQ42010andQ12011.
Ingeneral,allactivityinthecountrywasstronglyimpactedbythepresidentialelectionsinthefinalquarterof2011.Therun-offelectionswereheldatthebeginningofNovember.TheinaugurationceremoniestookplaceinJanuaryandthenewgovernmentisnominatedprogressively.TheNEC(LiberiaNationalElectionsCommission)declaredincumbentPresidentEllenJohnsonSirleafthewinneroftherun-offon15November2011with90.7%ofthevote.
AlthoughtheoverallpoliticalenvironmentinLiberiahasbeenrelativelystableduring2011,theyearwasmarkedbyconcernsoverpotentialspillovereffectsfromtherecentcivilwarandongoingpoliticalcrisisinneighbouringIvoryCoast.Reportsduring2011indicatedthatrefugeecampsinLiberiasufferedshortagesoffoodandmedicalsuppliesduringtheyearaslargenumbersofrefugeesfromIvoryCoastcrossedtheborder.AresurgeofconflictorviolenceintheneighbouringcountrymighttriggernewrefugeeinflowswithpotentiallydestabilisingeffectsonLiberia.9
Forthefirstninemonthsof2011,theinflationratestoodat9.0%whichisanincreaseofmorethan2.3%comparedtothesameperiodinthepreviousyear.ThevolumeoftheGDPfortheninemonthsofthecurrentyearwasTJS20bn(USD4.2bn);itsrealgrowthhasreached7.5%.GDPpercapitaincreasedconsequentlyandreachedUSD758attheendofSeptember2011.10
FromJanuarythroughSeptember2011,theexchangerateoftheTajikSomonihadtendedtodecrease.AgainsttheUSDthenationalcurrencydevaluatedby6.7%,againsttheEURby9.4%andagainsttheRUBby1.8%.Reasonforthecontinuingdevaluationistheincreaseddemandforforeigncurrencyinthemarket(doubledinthethirdquarter)incombinationwithrisingpricesintheworldcommoditymarkets.Inordertostabilizethenationalcurrency,NBT(NationalBankTajikistan)hasmademarketinterventionsworthUSD48.3mduringthefirstninemonthsoftheyear.DuringthelastquartertheNBTrefinancingratehaschangedtwice–on14October2011itincreasedfrom9%to10%andon14December2011itdecreasedfrom10%to9.8%.
TotalassetsoftheTajikbankingsystemamountedtoTJS9.1billion(~EUR1.5billion)whichisanincreaseofTJS2.3billion(~EUR373million),ariseof33.7%comparedtotheendof2010.
ThebalanceofthecreditportfolioofthebankingsystemforthisperiodtotaledTJS3.9billion(~EUR633million)whichincomparisontotheendofpreviousyearincreasedbyTJS0.6billion(~EUR97million)or18.2%.
Tajikistan
49
9InformationtakenfromcountryinformationprovidedbyUNHCR10AllinformationinthissectionistakenfromNationalBankTajikistan(NBT)
AccessHolding Management Report 2011
Asof1October2011therewere15banksinTajikistan:onestatebank,ninejoint-stockcommercialbanksandfiveforeignbanks(plusone)–comprisingatotalof272bankbranches(plus18),2non-bankcreditinstitutionsand122micro-financinginstitutions(minusone)workinginthecountry.InearlyDecemberTojiksodirotbankpurchased100%ofthesharesofTajikistanDevelopmentBank(BonkiRushdiTojikiston)andconverteditintoanaffiliate.TheBankofPakistaniscurrentlypreparingthelaunchofadaughtercompanyinTajikistan.On26January2012anewchairmanandvicechairmanoftheNBTwereappointed.
On26DecembertheredactionoftheLawonBankswassignedoffbythepresidentandwasofficiallypublishedon4January2012.ThemainchangeaffectingAccessBankTajikistanistheabolishmentofallpreviousrequirementsfornewbanksforobtainingadepositlicense,i.e.thebankcannowapplyforadepositlicenseforphysicalpersonsandstartattractingdeposits.
ThemicrofinancesectorinTajikistancontinuestogrow.DuringthethirdquarterABTJhadovertakenthreeMFIs(Khumo,OxusandFinca)asperoutstandingloanportfolioandcameveryclosetothesecondlargestMFIArvand.ABTJ’sshareintheDushanbedisbursementshasincreasedfrom3%byendofJuneto3.4%byendofSeptember2011.ABTJ’smaincompetitorintheMicrosegment,IMONInt’l,undertakesseriouseffortstoconvertintoafullyfledgedbank.InearlySeptemberonenewbank(KontBankInvestment)wasestablishedthroughtransformationofanexistingnon-bankFIandisexpectedtostartoperations,soon.Mainfocusofthenewbankwillbefinancingofinvestmentprojects,sonooverlapwithABTJ’stargetgroupshouldarise.
Despitedecreasingcopperprices(whichisamajorsourceofrevenue)andsomeuncertaintyaftertheelectionswhichwereheldinSeptember,therealeconomicgrowthrateisstillmaintainedataround7%for2011.Inflationratesstabilizedbetween8.5%and9%attheendof2011andareinlinewitheffortstoholdthoseinsingledigits.
Pressureremainshighforfinancialinstitutionstoreduceinterestrates.Inthisrespect,statutoryreser-verequirementsandcorporatetaxrateswerereducedtosupportthis.
YieldsonT-Billsfor91and182daysweresetat6.4%and9.4%respectivelybytheendofDecember,adecreaseof150basispointscomparedtothepreviousquarter.ThelocalcurrencyKwacha(ZMK)wasratherstableagainsttheEuroandsawfluctuationsbetween6.590and6.950(4.850and5.100againsttheUSD)duringthefourthquarterof2011.
ThenewGovernoroftheBankofZambiatookofficeattheendoftheyearafterthepredecessorhadtoleaveofficerightaftertheelectionsinSeptember.
TheWorldBankpredictsthatZambia‘seconomywillbeamongthefastestgrowingeconomiesinSub-SaharanAfrica(SSA)inthe2011-2013periodduetothesplendidperformanceinmining,agricultureandservicesectors.Zambia’soverallDoingBusiness2011(DB2011)rankingis76,recordingan8-pointincreasefromlastyear.DB2011reportedthatZambiaeasedbusinessstart-upbyeliminatingtheminimumcapitalrequirement.
Theagriculturalsectorgrewbyapproximately11%in201111.
PresidentialelectionswereheldinSeptember2011.MichaelSata(PatrioticFront)wasdeclarednewpresident,defeatingincumbentRupiahBanda(MovementforMulti-PartyDemocracy)whosepartyhadbeentherulingpowerfor20years.Satawasswornintoofficethesameday.
50
Tajikistan (con’t.)
Zambia
AccessHolding|AnnualReport2011
11AccordingtoZNFU(ZambianNationalFramersUnion)information
Thepost-electionperiodwasmarkedbyreview/reversalof(politicallymotivated)decisionstakenbytheformergovernmentduringthecourseofthepastyear(possessionofFinanceBankZambiaandresale,privatizationofZamteltoaLibyaninvestmentcompany)andchangesofsometoppositions/boardsofavarietyofinstitutions(e.g.BankofZambia,ZambiaRevenueAuthority).
ThetwographsbelowshowthedevelopmentofthemostimportantbalancesheetitemsoftheaggregateAccessBanknetworkbetween31December2010and31December2011,fortheassetandliabilitysiderespectively.12
Ascanbeseenfromthefirstchart,totalassetsmanagedbytheAccessBanksincreasedrobustly(by17.6%)duringtheyear,fromEUR407.9milliontoEUR479.8million.Thegrowthwasledbytheloanportfolio,whichgrewby21.0%fromEUR289.4milliontoEUR351.6million.Otherassets(includingliquidassets,fixedassets,intangibleandmiscellaneousassets)increasedbyalesserrate,fromEUR118.5milliontoEUR128.2million(+8.1%).
Thebankingnetwork’slendingbookcontinuestobedominatedbythetwocorelendingproducts,i.e.microandSMEloans.In2011,microloansincreasedby21%fromEUR156.2milliontoEUR182.8millionandremainthemostsignificantbalancesheetitem(52%ofthegrossloanportfolio).SMEloansgrewfromEUR111.8milliontoEUR137.6million(+23%)andarenowaccountingfor39%oftotalloanex-posures.Thecategoryof‘otherloans’(whichcontainsretail,consumerandstaffloans)registeredthestrongestrelativegrowth(+45%)butremainssignificantlysmallerthanthebusinessloanproducts,atEUR31.2million(9%ofgrossloansand7%oftotalassets).
Ontheliabilityside(seechartonthenextpage),customerdepositsgrewby28%fromEUR145.9milliontoEUR187.8million,inducingaslightincreaseofthedeposits/loansratiofrom50%to53%.Thisaggregaterateconcealssignificantdeviationsbetweenthedeposit/loancoveragesoftheindividualnetworkbanks,whichvaryfrom5-12%inTajikistan,NigeriaandZambiato120-122%inMadagascar,TanzaniaandLiberia.ThenetworkbankinAzerbaijanconstitutesthemiddlebetweentheextremes,withadeposits-to-loansratioof49%.
3 BusinessDevelopment
51
12DeviationsfromthegeneralgrowthpathduringtheyeararepredominatelyexplainedbyfluctuationsoftheAzeriManatagainsttheEuro,which closelyfollowmovementsbetweentheEuroandtheUSdollar.
Development of Network Bank Assets (Mill. EUR)
Dec10Jan11Feb11Mar11Apr11May11 Jun11Jul11Aug11Sep11 Oct11 Nov11 Dec11
450
400
350
300
250
200
150
100
50
0
OtherLoans
SMELoans
MicroLoans
OtherAssets
AccessHolding Management Report 2011
Externalborrowingsfrominternationalfinancialinstitutionsandmicrofinanceinvestmentfundsincre-asedslightlyfromEUR159.2milliontoEUR167.4million.Unsurprisinglyinviewoftheabovedepositcollectionresults,thebanksrequiringthelargestexternaldebtintakeareAzerbaijan,NigeriaandTajikistan(asZambiaisstillfeedingitsloangrowthfromequity).
TheconsolidatednetprofitofallnetworkbanksamountedtoEUR16.7million(2010:EUR24.0million).Thiscorrespondstoaweightedreturnonaverageequityof17.9%(33%).Thereductionofaggregateprofitabilityisaresultofdecliningnetportfolioyields(from23.1%in2010to21.3%in2011)againstincreasingoperatingexpenseratios(from15.7%to17.4%).ThistrendisdrivenmainlybyAccessBankAzerbaijan(ABA),whichduetoitsizehasbeendominatingtheaggregateresult.
Theanalysisofotherbanks(asdetailedbelow)showssignificantdifferencesinearningstrends:net-workbanksinMadagascarandNigeriaswungfromnegativetopositiveprofitability,Tajikistan(whichwasinitssecondyearofoperations)reduceditslosswhilstTanzaniafellbackfromasmallprofitin2010intoalossin2011,thelatterbeingtriggerednotbystructuralbusinessdevelopmentbutbyachangeoffinancingstructurecomparedtopreviousyears.
Inthefollowing,webrieflysummarisethebusinessdevelopmentofeachnetworkbank:2011wasanothersuccessfulyearforAccessBankAzerbaijandespitemoredifficulteconomiccondi-tionsandfiercercompetitioninAzerbaijan’smicrofinancesector.Thebankfurtherstrengtheneditspositionastheleadingbankforsmallbusinessfinanceandoperatesamongtheleadingbanksofthecountry.TheBankerMagazinenamedAccessBankasthe‘BankoftheYearinAzerbaijan’initsannualawardswhileFitchRatingshasagainaffirmeditsratingsforAccessBankwithoutanychanges.AccessBank’slong-termforeigncurrencyIssuerDefaultRating(IDR)wasconfirmedat‚BB+‘with‘Out-lookStable’–thehighestamongAzerbaijan’sfinancialinstitutions.
Excellentportfolioquality(PAR30:0.76%)wasmaintainedandreliableserviceledtocustomerconfi-denceandinternationalrecognition.
52
3 BusinessDevelopment (con’t.)
AccessBankAzerbaijan
AccessHolding|AnnualReport2011
600
500
400
300
200
100
Development of Network Bank Equity + Liabilities (Mill. EUR)
Dec10Jan11Feb11Mar11Apr11May11Jun11Jul11Aug11Sep11Oct11 Nov11 Dec11
Equity
OtherLiabilities
ExternalBorrowings
CustomerDeposits
2011endedwithatotalpost-taxprofitofUSD22m(USD33min2010).ROEstoodat25.0%(51.6%in2010)andROAat4.8%(7.8%in2010).CapitalAdequacyreached28.4%(28.0%at2010-end).Whilethenetprofitandprofitabilityindicatorswerelowerthanin2010,duetothereductionininterestincomeasratescontractedandcontinuinggeneralincreaseinstaffandoperationalcosts,thesetrendswereanticipatedandtheresultswerestillfaraboveplan.
Incredit,recorddisbursalsinDecemberofUSD48m,combinedwithstrongdisbursalsintherestofthequarter,pushedtotaldisbursalsin2011reachedUSD469m,an8%increaseon2010(USD436m),withthetotalportfolioincreasingbyUSD37m /11%during2011tofinishtheyearatUSD378m.TheSMEportfoliomadethelargestcontributiontothegrowth–,increasingbyUSD20m(14.9%)in2011,followedbytheRetailportfolio–increasingbyUSD10m(48%).DepositsendedtheyearatUSD179m(18%upcomparedto2010-end).
AtaxlawinAzerbaijanprovidedapartialprofittaxexemptionforbanks,aswellasinsuranceandreinsurancecompanieswhichincreasedtheirchartercapitalbeginning1January2009.ABAcapitalizedprofitsof2009,2010and2011.AlthoughthecapitalizationwasnotintendedtohaveaneffectonAccessHolding,atotalamountofEUR0.8millionwaspaidtotaxauthoritiesbyABAonbehalfofAccessHolding.In2011theConstitutionalCourtofAzerbaijanruledoutthatcapitalizedprofitcanonlybetaxedatrealizationofcapital.Forfuturedividendpaymentswhicharesubjecttowithholdingtax,AccessHoldingcanusetheseamountstooffsetthesetaxes.
AccèsBanqueMadagascar’s(ABM)assetsgrewbyEUR7.4millionfromEUR17.5milliontoEUR24.9million.Theloanportfolioasat31December2011comprised20,883loanstotallingEUR14.3million(2010:14,436loans,EUR11million).CustomerdepositsincreasedfromEUR13.6milliontoEUR17.8million.Attheendoftheyear,ABMemployedatotalof561staffin14branches(2010:435/11).PortfolioqualitydeterioratedwithPAR30risingto4.4%(2010:1.8%),theincreaseemanatingmainlyfromtheSMElen-dingdivision.Ingeneral,theSMElendingbusinesshasnotdevelopedsatisfactorilyin2011,whichwaspartlydrivenbyinternaldifficultiesandpartlybythecontinuousuncertaintiessurroundingthecountry’spoliticalsituation(asdescribedabove).Thepoliticalstalemateandhighperceptionofriskhasbeendam-peninginvestmentappetiteespeciallyamongSMEcustomersandhencereducedloandemand.
ABMreportedaprofitofEUR107,366,whichwashoweverbelowbudgetexpectationsasaresultofhigherloanlossprovisionsandslowerlendinggrowth.TotalequityamountedtoEUR3millionattheendof2011.ThenewlylaunchedAgriculturalBusinessdevelopedverywellinthelastquarterof2011,exceedingexpectations.Theportfolioincreasedby57.3%duringthefourthquarterandnowstandsatMGA519.9m(TEUR178)representing1.26%ofthebank’sentireportfolio.
2011wasthefourthfullbusinessyearforAccessBankTanzania(ABT),whichopenedinNovember2007.Thebankincreaseditsportfolioto12,305loans(2010:5,592)amountingtoEUR15million(2010:7.9million)andcollectedcustomerdepositsofEUR18.2million(2010:EUR8.8million).Asof31December2011,ABToperatedfromsixbranchesandemployed342staff(2009:5/213).ThebankrecordedalossofEUR331,824,whichwashigherthanexpectedinthebudget.PortfolioqualitywasverygoodwithPAR30at1.2%(2010:2.9%),whereaswrite-offsamountedtoapprox.1%oftheyear-endgrossloanportfolio.AcapitalincreaseofTZS2bn(TEUR975)wascarriedouton31October2011tosupportnewbranchopenings.Threeshareholders(AccessHolding,IFCandKfW)participatedintherightsissuewhilsttwoothers(AfDBandBIO)abstained.Asaresultoftheover-proportionalparticipationofAccessHolding,itssharehasrisento50.7%,meaningthatABTbecameapropersubsidiaryandwillthusbeconsolidatedinthefinancialstatements.In2011,thefirstmobilephonepaymentsystemshavebeenintroducedasanagencyservice(butarenotdirectlylinkedtothebank’sowncustomerdepositaccounts).
AccèsBanqueMadagascar
AccessBankTanzania
53
AccessHolding Management Report 2011
OpenedinNovember2008,2011wasthethirdfullbusinessyearforABMicrofinanceBankNigeria(ABN).AfterpostingalossofTEUR553in2010,thebankwasabletoreportaprofitofEUR865,324atyear-end2011.Thegrossloanportfolioincreasedfrom9,255loanswithEUR7.6million(attheendof2010)to16,930loanstotallingEUR17millionbytheendof2011.CustomerdepositsgrewfromEUR1.0milliontoEUR2.2million,butremainbelowexpectations.HowevertheBankdisposesofamultitudeofexternalrefinancinglinesfrominternationallenders,althoughthecostofborrowingremainshighatbetween16and20%p.a.
Throughout2011therehasbeenanimportantincreaseinstaff.Atyearend,ABNemployed467staffin8branches(2010:275/6).PARhasincreasedduringtheyear(howevercomingfromverylowlevels),standingat1.57%(PAR1)and0.95%(PAR30)attheendoftheyear.Thisisstillanexcellentvalueandindicatesthestrengthofthelendingtechnology.
AccessBankLiberia(ABL)ended2011withtotalassetsamountingtoEUR13.5million(2010:EUR10.6million).Initsthirdyearofoperationitsoutstandingloanportfoliostoodat7,078withEUR4.2million(2010:5,536/EUR3.3million).Generallyspeaking,thegrowthofthebank’sloanportfolioremainedbelowexpectations,astheMicrolendingbusinesswassloweddownbyportfolioqualityproblems(withPAR 30deterioratingfrom1.62%in2010to5.15%attheendof2011)whereastheimplementa-tionoftheSMElendingproductwashaltedbyadelayedapprovaloftheCentralBankofLiberia(CBL).Onapositivenote,theMicrolendingperformanceimprovedmoderatelytowardstheendoftheyear,andCBLapprovalfortheSMEproductwasfinallygrantedjustbeforetheendoftheyear,sothatSMElendingcancommenceinQ1/2012.However,substantialchallengesremain–deepeningmanagementcapacityandimprovingportfolioqualityarekeyinternalissues.
CustomerdepositstotalledEUR5.2millionattheendof2011(2010:2.5million),exceedingbudgetexpectations.Nofurtherbrancheswereopenedin2011butstaffincreasedfrom210in2010to290on31December2011.ABLregisteredalossofEUR366,569asinterestincomeremainedbelowplanwhereasoperatingexpenseswereincreasedbystaffexpansionandotherfactors.
AccessBankTajikistan(ABTJ)openedforbusinessinApril2010.In2011itsbranchnetworkgrewby2newbranchesto4branches.Inaddition,totalstaffreached237atyear-end2011(2010:162)meaningthatemploymenthasbeenincreasedby48%.Untiltheendof2011,thebankachievedanoutstandingportfolioof4,798loans(2010:1,369)withEUR9.5millioninvolume(2010:EUR2.9million).Loanportfolioqualitystoodat1.32%(PAR30).SinceABTJ’slicensedidnotallowthebanktotakedepositsfromphysicalpersonsuntiltheendof2011,thebankoffersaccountsonlytolegalpersonsandwasabletoattractTEUR451,anincreaseof113%ascomparedto2010.ABTJregisteredalossofTEUR644(2010:TEUR537)
On4April2011ABTJwentlivewithitsnewbankingsoftwareT24+LMBafterthesuccessfulmigrationfromthelegacysystemLFSMicrobankSystem.
20monthsaftertheopeningoftheBank,ABTJhasbecomeoneofthefivelargestmembersofAMFOT(AssociationofMicrofinanceOrganizationsofTajikistan).AccessBankTajikistanhasbeensuccessfullyinspectedbyNationalBankofTajikistanandhasreceivedthehighestmarkamongbanksinTajikistan.Inthefinalquarterof2011thenewmoneytransfersystem“Leader”wasintroduced.
ABBankZambiajoinedtheAccessNetworkasitsyoungestmemberinOctober2011.Thebanktookasuccessfulstart.Inthefirstquarterofoperations(18October-31December2012)407loanswithEUR380,123weredisbursedand1.410depositaccountswereopened.Thedevelopmentsinthebankingser-vicesdepartmentsexceededexpectationsbyabout30%whereasincredittheoutcomewasabout10%belowtheexpectedresults.Sofar,ABBankZambiaconsistsofonebranchwhileemploying84staff.
54
AB Microfinance Bank Nigeria
AccessBank Liberia
AccessBankTajikistan
AB Bank Zambia
AccessHolding|AnnualReport2011
Shortlyafteritslaunch,ABBankZambiawasgivenanawardinrecognitionofthelaunchoftailormademicrofinanceproductssuitebyacommercialbankataBanker’sBallwhichwashostedbytheBankersAssociation.
Note on internal System for Controlling/Monitoring of Investee Companies on the basis of Quantitative Performance BenchmarksGenerallyspeaking,AccessHoldingmonitorsandcontrolsthefinancialandoperationalperformanceofitsnetworkbanksthroughastringentbi-directionalfeedbackloopbasedonquantitativeperformancebenchmarks,budgetdeviationanalysisandtrendanalysis.Thisfeedbackloopinvolvesthemonthlysubmissionofstandardisedperformancereportsbyeachinvesteecompanytotheholding,wherethecollecteddataisprocessedandfedintoanevolvingdatasetcomparingnetworkbankperformancesovertime(longitudinalanalysis),i.e.enrichingtheglobalhistoricaldatabasefromwhichbenchmarksarederived.Additionallyfraudincidentsarereportedonaregularbasis.
Overtime,asetofgeneralisedperformanceexpectationshasemerged(andcontinuestoemerge)withrespecttokeyindicatorssuchasloanofficerproductivity,lendingqualityordepositcollectionresultstobereachedatacertainpointintimeofanetworkbank’sexistence(i.e.afterXmonths/yearsofoperations).However,theanalysisofeachbank’sactualperformanceagainstthesegeneralisedbench-marksneedstotakecountry-orinstitution-specificfactorsintoaccount,i.e.cannotignoredifferencesinmarketsize,industrystructureortheincomeleveloftherespectivetargetgroup.Inmanycountries,bankperformancesarealsosignificantlyinfluencedbylocallaws,regulationsorotherexternalfactors.
Eachinvesteecompanyisassignedtoaprojectco-ordinatoratholdinglevelwhosupportstheinvestee’smanagementinaddressingperformancegapsorstructuralbudgetunderfulfilment.Onaquarterlybasis,theperformancesofallnetworkbanks(andotherissuesrelevanttotheirdevelop-ment)arediscussedindepthinastructuredsessionincludingAccessHolding’sManagementBoard,theheadoftheInvestmentUnitandtherespectiveprojectco-ordinators.SeniorManagersofthenetworkbanksareattendingoneormore(dependingonposition)holding-levelworkshopsperyearinwhichbankperformancesareanalysed,cross-cuttingissuesdiscussedandbudgetprojectionsmadefortheforthcomingyear.
Note on Accuracy/Effectiveness of Internal Planning/Forecasting SystemLikethecontrolling/monitoringsystem,theinternalforecastingprocessalsofollowsabi-directionalapproachinwhichinvesteecompanyareproducingtheirownannualbudgets(or3-to5-yearbusinessplans)whichfeedintotheholding’sbusinessprojections.Whereastheholdingfeedsintothebudgeting/forecastingprocessofitsinvesteecompaniesbycheckingtheplausibilityoftheirforecastsagainstempiricalevidence(averagegrowthratesandperformancebenchmarksobservedatothernetworkbanksatasimilarmaturitylevel)andrecommendsimprovementspriortofinalisation.ThefinalapprovalsofinvesteebudgetsarepreformedbytherespectiveinvesteeBoards.
Theaccuracyofannualforecastshastobemeasuredandinterpretedinlightofthe‘age’oftheinves-teecompanies.‘Young’banksmaydoubleortripletheirearningassetsinasingleyear(aswasthecaseinABT,ABNorABTJin2011).Insuchsituations,evenslightdeviationsoftheexpectedgrowthpath–whichcanbeeasilytriggeredbyeventssuchasthedelayedopeningofanewbranch–cancausemajorunder-oroverfulfilmentofthebudgetedannualprofits.Additionallytherearemanyexternalfactorsinfluencingtheactualresultsthatcannotbeverywellpredicted,suchasmacroeconomiceffects(especiallyexchangeratefluctuations)orchangeoflawsandregulations.
Thisnotionisconfirmedwhenanalysingtheaccuracyofbudgetedresultsatinvesteelevelin2011,astherewerestrongover-fulfilments(ABA’sprofitsbeing36%aboveplaninEuroterms,andABN’seven156%abovetarget)aswellassignificantunderfulfilmentsatsomeoftheotherbanks(withABLandABTJmakinglossesagainstabudgetedsmallprofit).Thetotalafter-taxprofitofallnetworkbankscombined
55
AccessHolding Management Report 2011
washowevernottoofarofftarget,atEUR16.5million(againstacombinedbudgettargetofEUR13.1million).Totalinvesteecompanyassets(EUR479million)werealsoveryclosetothecombinedbudgetfigure(EUR484million).
Overtime,theincreasingbaseofempiricalnetworkbankdataavailableforextrapolationshouldenableustoimprovetheaccuracyofinvesteeandholdingprojectionstoacertaindegree.Howeverduetotheabovefactors,significanttargetdeviationsinindividualbankscannotberuledoutandourabilitytopredictexternaleffectswillremainlimited.
Note on Research & Development (R&D) Activities during the yearThemainR&DactivityofrelevancetoAccessHolding’sbusinessmodelistheexplorationofnewin-vestmentopportunitiesinGreenfieldprojectsorexistingfinancialinstitutions.13Thescreeningprocessfornewinvestmentsisanongoingprocessinwhichtheorganisation’sknowledgeofpotentialnewmarkets(forastart-upoperation)oracquisitionobjectsiscontinuallyexpandedorupdatedbywayofdeskresearch,fieldmissionsorleveragingofindustrycontacts.
During2011,themostrelevantactivitiesinthiscontextweretheupdatingoffeasibilitystudiesfortheplannedGreenfieldinvestmentsinBrazilandRwanda.InBrazil,thebusinessplanprojectionsfortheplannedstart-upwererevisedbasedonnewcommercialparametersderivedfromthemarketstudyupdate.Otherscreeningactivitiesandpreliminaryduediligenceofpotentialacquisitiontargetswereundertakenduringtheyearbutdidnotresultinconcretepreparationsfornewtransactions.
Note on Option AgreementsAccessHoldingandtheBelgianInvestmentCompanyforDevelopingCountriesSA(“B.I.O.”)havecon-cludedaconditional‘Put/CallOptionAgreement’forthesharesheldbyB.I.O.inAccessBankTanzaniaLtd.Asof31December2011,thepreconditionsforAccessHoldingtoexerciseitscalloptionwerenotyetfulfilledbutthepreconditionforB.I.Otoexerciseitsputoption(atbookvalue)weremet.Sincethepotentialgainsandlossesofthisagreementarecurrentlybalanced,liabilitiesresultingoutofthe‘Put/CallOptionAgreement’arenotrecognised.
AccessHoldingandtheDutchcompanyStichtingTriodosDoen(“Triodos”)haveconcludedanoptional‘Put/CallOptionAgreement’forthesharesheldbyTriodosinAccèsBanqueMadagascarS.A.in2009.Sincethepotentialgainsandlossesofthisagreementarecurrentlybalanced,potentialliabilitiesresultingoutofthe‘Put/CallOptionAgreement’arenotmeasurableandarenotrecognised.
AccessHolding,EBRD,IFCandKfWhaveconcludedanoptional‘PutOptionAgreement’forthesharesheldbyEBRD,IFCandKfWinAccessBankTajikistan.ThisoptionenableseachofshareholderstoselltheirsharestoAccessHoldingforagivenmultiple.Sincethepotentialgainsandlossesofthisagreementarecurrentlybalanced,potentialliabilitiesresultingoutofthe‘PutOptionAgreement’arenotmeasurableandarenotrecognised.
Institutionaldevelopmentatthelevelofeachnetworkbankandtheholdingasawholecontinuedthroughout2011.Attheheadquarterlevel,theLFScompetencycentrewasfurtherstrengthenedwiththeintakeofadditionalstaff.Thisenlargementwasundertakeninpreparationofthemediumtermplantocreateamatrixstructurewithproductmanagersacrossthegroup.Apartfrompermanentonlineandfrequenton-sitesupport,specialtrainingeventswereheldforallgroupCEOs,creditmanagers,retailmanagers,HRmanagers,ITmanagers,internalauditstaffandaccountants.Exchangeofstaffamongnetworkbankswasfurtherintensifiedwithshortandlong-termtrainingmissionsandsecond-mentswithinSub-SaharanAfricaandCentralAsiaaswellasacrossbothclusters.
56
4 InstitutionalDevelopment
AccessHolding|AnnualReport2011
13OtherR&Dactivities,suchasthedevelopmentofnewbankingproductsandservicesorthedesignoftechnologicaldeliveryplatformsorotherdistri- butionchannels,areundertakenbyAccessHolding’stechnicalpartnerLFSFinancialSystemsGmbHoninvesteeand/orheadofficelevel.Hence,these activitiesarenotpartoftheservicesrenderedundertheManagementServicesContract,i.e.donotfallunderthescopeofthisAnnualReport.
StaffingoftheLFSITdepartmenthasalsobeenexpandedsuccessively,boththroughpermanentstaffandfreelancers,tocopewiththeadditionalworkloadtriggeredbytheongoingmigrationprojectofthenetworkbankscorebankingsystemsfromLFS-MBS(aproprietarysolutiondevelopedbythetechnicalpartnerLFS)toT24,amarketsolutiondevelopedbyTemenosandcustomizedfortheAccessHoldingnetworkbyLFS.Migrationwasstartedin2011withAccessBankTajikistanadoptingthenewsystemandAccessBankinAzerbaijancommencingthescoping/preparation.Furtherstepsareexpectedfor2012.
TheextensionoftheoriginalManagementServicesContract(“MSC”)betweenAccessHoldingandLFS(whichexpiredon30.09.2011)wasnegotiatedandmateriallyapprovedbytheShareholderson9September2011.Duetodelaysinthefinalauthorisationprocess,theactualsigningofthenegotiatednewcontract(“MSC-2”)tookplaceonlyinJanuary2012(butwaseffectiveretroactively).LFSprovidedmanagementservicestoAccessHoldingalsoduringtheinterimperiod.
Asintheoriginalcontract,theremunerationsystemundertheMSC-2isdividedintoafixedandavariablepart.Thevariableportionisaperformancefeewhosemagnitudedependsonthedegreeoftargetfulfilment(withtargetsbeingderivedfromthebusinessplandevelopedfortheperiodof2012-2016).
Comparedwith2010thetotalassetsofthegroupdoubledin2011duetothegrowthofthegroupcompaniesandthenewlyconsolidatedABT.Assetsaredominatedbyinvestmentsinassociates,loansandadvancestocustomersandcashandcashequivalentsandtotaltoEUR98.1million.LiabilitiesincreasedtooverEUR49millionbutarestilllowcomparedtoequity(EUR34.2million)andshareofMinorityShareholders(EUR14.6million)duetotheyoungageofthenetworkbanks.Thereforethedebtratioincreasedfrom21.0%to50.3%.AsaresultfromthenewlyconsolidatedABTandthegrowthoftheotherbanks,loansandadvancestocustomersincreasedfromEUR13.2milliontoEUR45.7millionandcustomeraccountsincreasedfromEUR3.5milliontoEUR23.3million.ExternalfinancingbybankincreasedfromEUR4.7milliontoEUR19.0million.
In2011theprofitandlossaccountweredominatedbynetinterestincomeandoperationalcosts.NetinterestincomeincreasedfromEUR5.1milliontoEUR10.2million.Incontrasttothisstronggrowth,operatingexpensesincreasedmoderatelyfromEUR7.7milliontoEUR13.3million.TheprofitaftertaxofthegroupdecreasedslightlyfromTEUR1,814toTEUR1,592butwashighlyinfluencedbytaxeffectsandtheconsolidationofABTwhichgeneratedalossofTEUR507mainlybecauseofcurrencyeffectsatthetimeofconsolidation.
Returnonaverageequity(withoutothercomprehensiveincome)is5.0%for2011whichisslightlylowercomparedwith2010(7.8%).
Theliquidityriskisshownanddescribedinthenotes.Becauseofthetwoadditionalconsolidatedcom-paniesandthegrowthofthegroupcompaniestheamountofcashandcashequivalentsissignificantlyhigherthanin2010.
Thefollowingmaterialeventshaveoccurredbetweentheclosureofthefinancialyearandtheproduc-tionofthisreport,whichareconsideredtobeofrelevancefortheCompany:
PreparationsforacapitalincreaseofAccessHolding(inviewoftheupcomingacquisitionofa majoritystakeinABA,seechapter9)haveprogressedtothepointthatallbutoneshareholders hadsecuredtheirfinalorpre-finalapprovalsfortheirrespectivecapitalcontributionsatthetime ofwriting.Thecapitalincreaseisforeseentotakeplaceinthesecondquarterof2012.
TheBankofZambia(BoZ)announcedthattheminimumcapitalrequirementforforeigncommercial bankswillbeliftedtotheequivalentofaboutEUR75millionandforlocallyownedbankstothe equivalentofaboutEUR15millionbytheendof2012.Astheseamountsarefarabovetheforeseen
5 Financial Results of the Consolidated Group
6 Subsequent Events
57
AccessHolding Management Report 2011
andjustifiedcapitalisationlevelforABZ,inparticulartherequiredcapitalforforeignbanks,ABZ shareholders(ledbyAccessHolding)havestarteddiscussionswithBoZrespectofthismatter.
Thenumberofstaffmembersofallnetworkbankstogetherincreasedfrom2,502to3,318(+32.6%),whichwasdrivenbynetstaffincreasesineverynetworkbankplustheopeningofanewbankinZam-bia(seeabove).
Allnetworkbanksfocusonrecruitment,trainingandintegrationofnewstaff.Professionallytrainedandhighlymotivatedteamsarethefoundationsforthesuccessofallnetworkbanks.Allnetworkbankshaveatransparentandequal-opportunitystaffselectionandpromotionprocessinplace.Recruitmentprimarilyfocusesonuniversitygraduates,valuingintegrityandmotivationoverpreviousbankingexperience.Professionalandbankingskillsaretaughttonewstaffthroughextensivetraining,mostofwhichisconductedthroughin-houseseminarsandonthejob.Therapidgrowthofthebankoffersdynamiccareeropportunities.MostManagementpositionsthatwereinitiallyheldbyforeignmanagersareusuallyfilledbylocalcandidatesfromwithintheinstitutionafterthreetofiveyears(thedurationdependingusuallyonthequalityoftheeducationsystemoftherespectivecountry).AccessHolding,sharingtheGlobalCompact’scommitmenttolabourprotection,iscommittedtofairandequalopportunityrecruitment,treatment,andpromotionofourstaff,irrespectiveofgender,race,nationalityorreligion.ThisissetoutwithinourstaffandgenderpoliciesandwithintheGlobalCompactandincludesacodeofconductprovidingguidancetostaffonprofessionalbehaviour.Ournetworkbanksleadthesectorwiththeprovisionofstafftrainingandprovideadditionalprivatehealthinsuranceaswellashighlycompetitiveremuneration.
Inriskmanagement,itisnecessarytodifferentiatebetweentheoperationsoftheholdingandthoseofthenetworkbanks.Whilethemainrisksfortheholdingarecountryandcurrencyrisks,itiscurrentlynotexposedtoanycreditandtoonlyverylimitedoperationalrisks.Thenetworkbanksontheotherhandareexposedtothefullrangeofriskscommontothebankingindustry,aggravatedbyfactthattheyworkinmarketswithsometimesseveredeficienciesintheareasofpoliticalandeconomicstabili-tyandruleoflaw.
Level of AccessHolding Higher than expected capital requirements
Nature of risk:FasterthanexpectedassetgrowthofMFIs,insufficientaccesstoexternalfinancing and/orregulatorychange,canforceAccessHoldingtoaccelerateorincreasetheprovisionofcapital toitsnetworkbanks.UndertheHolding’scurrentcapitaldevelopmentprojectionsandinvestment planthiscanleadtotemporaryliquiditysqueezes.Thesameeffectscanalsooccurasaresultof fluctuationsofdividendincomesfromAccessHolding’sparticipations.
Mitigating factors:AccessHoldingimplementscarefulliquidityplanningandinitscapitalallocation alwayskeepsacushionforunexpectedfollow-upinvestments.Itsshareholdersaresufficiently solventtoprovidemorecapitalifneeded.
Delayed implementation of investment pipeline Nature of risk:Newinvestmentsinnetworkbanksneedtobecarefullyselectedandcoordinatedwith like-mindedco-investors,whosedecisionmechanismsmayrequiremoretimethanenvisioned. Licensingprocessescanbelongandcumbersome.Therefore,delaysintheimplementationofthe investmentpipelinecouldaffectthebuild-upoftheinvestmentportfolioand,ultimately, AccessHolding’soverallprofitability.
Mitigating factors:AccessHoldinghasdevelopedandismaintainingastronginvestmentpipeline, screeningandanalysingpossibletargetcountrieswellinadvance.
58
6 Subsequent Events(con’t.)
7 Human Resources and Training
8 Risk Management
AccessHolding|AnnualReport2011
External shocks in MFI host countries Nature of risk:Thecountriesofoperationaresubjectedtoanumberofrisks,suchasmacroeconomic shocks,naturaldisasters,orpoliticalupheaval.Suchrisks,wheretheymaterialise,canhavesub- stantialimpactontheMFIsandtheirclientele,intheformofe.g.adepressedbusinessenvironment, suddendelinquencywaves,tightenedmoneysupply,orextraordinaryforeignexchangelosses. ThesecandestabilisetheinvesteeMFIandcauselossesfortheinvestors.
Mitigating factors:MFIsarecomparativelyshock-resilient,foravarietyoffactors:Firstly,smallbusiness activityindevelopingcountriesisoftenpreciselyaresultofpooreconomicconditionsandinsufficient employmentopportunities,sothatdemandformicroenterpriseloanscanevenincreaseintheevent ofacrisis.Moreover,mostMFIclientsaretradersofbasicgoodssoldinsmallbatches,thedemand forwhichisaffectedbyeconomicshockstoalesserextentthanoveralldemandintheeconomy. Also,mostMFIloansareshort-term,sothattheycanquicklyrespondtointerestratechangesinduced bysuddenalterationsinmoneysupply.Forinvestors,theseadvantagestranslateintoarelativelylow systematicrisk(beta)ofMFIinvestmentsandlowcorrelationtotheperformanceofmostother investments.
AnadditionalmitigatingfactorinthespecificcaseofAccessHoldingisthatthepoliticalleverageof theIFIs(Internationalfinancialinstitutions)amongitsfoundingshareholdersandasinvestorsin networkbanksshouldhelptoreducethecountryriskofitsinvestments.
Foreign exchange risk Nature of risk:AccessHoldingmostlyundertakesequityinvestments,whicharedenominatedinlocal currencyandarethussubjecttoexchangeratefluctuations.Whilethenetworkbanksneedtomanage currencyrisksinrelationtotheirrespectivestatutorycurrency,theholdingisultimatelyinterested intheEurovalueofitsinvestments.Moreover,theinternationalreferencecurrencyinsomecountries ofoperationistheUSDollar,whichintroducesadditionalvolatilitytotheinvestments’value.
Mitigating factors:Duetothelong-termstrategyandnatureofinvestmentsasequity,hedgingis usuallynotpossible.Thecurrencyriskthereforehastobemanagedby(i)aimingtomaintain sufficientprofitabilityinnetworkbankstocompensateforcurrencydevaluationand(ii)diversification ofinvestmentsacrosscountriesandregions.
Level of network banksNetworkbanksareexposedtoallrisksinherentinthebankingindustry.Thisincludescreditrisk,maturity(liquidity)risk,interestraterisk,andcurrencyriskaswellasoperationalrisks,marketrisks,andcoun-tryrisk.Theoverridingriskmanagementstrategyisthecommonmanagementapproach,implementedthroughthetechnicalpartnerLFS,andtheprovisionofactiveinvolvementandcontrolbytheheadquar-ters.Theprovenandwelltestedapproachensuresthroughpermanentandinstitutionalisedexchangeofstaffandinformationaswellasthroughcontrolandauditthatbestpractiseisfollowed,synergiesarerealisedandtheduplicationoferrorsisavoided.Thisapproachisaconclusionfromtheobservationthatmanagementcapacity(asopposedtocompetition,marketlimitationorfunding)isoftenthesinglemostimportantbottleneckforthedevelopmentandsuccessofmicrofinanceinstitutions.ThelinkagebetweentheprovisionofcapitalandmanagementservicesisattheheartofAccessHolding’sbusinessconcept.
Importantprinciplesofthisapproachinclude
Standardisationandconcentrationoncoreproducts:AccessBanksdonotaimtooffereverypossible bankingproductbutconcentrateonprovidingexcellentserviceintheircoreareasofcompetence, i.e.microandsmallbusinessfinance.Thisensuresthatsparsemanagementcapacityisconcentrated andspeculativeorerraticstrategiesareavoided.Moreover,experienceshowsthatawell-managed portfolioofmicroandsmallbusinessloansismuchmoreresilienttoeconomicshocksthancorporate, consumeroraggressivehousingfinance.
59
AccessHolding Management Report 2011
Lending technology:TheLFStechnologyformicroandsmallbusinesslending–comprisingall aspectsoflendingfromcreditanalysistocreditcycleprocedurestoorganisationalandcompensation matters–hasbeensuccessfullyprovenandtestedinavarietyofcountriesandsituations. Highportfolioqualityandbalancedbutdynamicgrowthcanbeachievedinmostenvironments.
Focus on training: Traininglocalandinternationalstaffonalllevelsfromclericaltotopmanagement isacorefocusoftheactivityofeachnetworkbankandthegroupasawhole.Mostcareersare madein-house,andhighstaffretentionratesandloyaltyareachieved.Thisisespeciallyimportant inabusinesswithsuchspecificrequirementsasmicrofinance.
Simplicity and transparency:Greatattentionisgiventoensuringtransparencyandsimplicityof thenetworkbanks’products,proceduresandappearance.Creatinganddemonstratinga corruption-freeenvironmentisachallengeinmanycountriesofoperations,butalsoacore competitiveadvantageandthebasisforsustainedsuccess.
Prudence and financial risk management:Higheststandardsareappliedintheclassicalareasof bankriskmanagement–standardsofloanlossprovisioning,observationofprudentregulations, interestrate,maturityandcurrencyriskexposure.Inmostcases,internallyappliedregulations aremuchstricterthancentralbanklimits.Thisismadepossibleontheonehandbythenature ofourbanks’businesswhichusuallyexcludesconcentrationofexposures,highmaturityrisksand thelike.Ontheotherhand,thelong-termstrategyofAccessHoldinganditsco-investorsensures thatmanagementisnotpushedtogotothelimitofleverageorotherindicators,andisorientedat growthandsustainabilityratherthanshort-termprofitmaximisation.
Operational risk management:Operationalrisksofvarioustypesfromfraudtodifficultiesin electricitysuppliesareacorethreattothenetworkbanks’profitability.Thedevelopmentand managementofriskmatrixesisthereforebecomingstandardacrossAccessBanksandcentralised servicessuchasinITandproductmanagementaregainingimportanceinreducingoperational risksandensuringthesharingofbestpractiseamongnetworkbanks.
Control and audit:Thebuild-upofefficientandcapablecontrolandauditfunctionsisacore elementofriskmanagement.ThisincludesahighlycapableMISonbankandgrouplevelsaswell asthecentraltrainingof,andcontroloverinternalauditdepartmentsofthenetworkbanks. MeasurestakeninthisareacomprisecarryingoutinternalauditsbytheHQauditteamaswellas providingauditpolicies,proceduresandplanstonetworkbanks,traininginternalauditorsatthe banklevel,andexchangeofauditteamsacrossthenetwork.
2012isexpectedtobeanotherprofitableandsuccessfulyearfortheAccessHoldingnetwork.LedbyABA,thegroupwillcontinuetoconsolidateitspositionasoneofthemajorinternationalplayersinmicrofinance.ABM,ABNandABTwillreachorstabilisetheirprofitability,whileABLandABTJareexpectedtoreachtheoperationalbreak-evenpointtowardstheendoftheyear.ABMandABLshouldalsoseesignificantreductionsoftheirlendingoverduelevels.
AccordingtotheapprovedbusinessplanforAccessHolding,allcurrentinvesteecompanieswillbeundermajorityownershipbytheendof2012(withABMandABAtobeacquiredinthecourseofthesecondquarter),andtwonewnetworkbankswillbeaddedtotheinvestmentportfolio.TotalassetsofallnetworkbankscombinedareprojectedtoreachEUR577million,withatotalloanportfolioofEUR416millionandatotalafter-taxprofitofEUR12million.AccessHolding’sownprofit(afterdeductionoftheprofitattributabletominorityshareholders,andotherholding-leveleffectsincludingforeignexchangeadjustments)isexpectedtoreachEUR2.7million.
60
9 Outlook
AccessHolding|AnnualReport2011
Inviewofuncertaintiesandtherelativelyhighriskofexternalshocksinthecountriesweoperatein,thereisalwaysariskofunforeseeabledevelopmentsineachcountry.Buttherearealsochancesofabetterthanexpecteddevelopmentduetogoodmarketopportunitiesandhigheconomicgrowthrateswhichalsocanacceleratethegrowthofourbanks.
Thethreemainchallengesfor2012,asidefromthecontinuationofsoundbusinessdevelopment,are(i)thesuccessfulcompletionoftheacquisitionofthemajorityownershipstakeinAccessBankAzerbai-jan;(ii)thedevelopmentoftheinvestmentpipelinewithaviewtoestablishingoracquiringnewbanks(oratleastreachagreementthereon)inthecourseof2012,and(iii)thecontinuationofthebankingsoftwaremigrationproject.
Withrespecttoitem(i),theacquisitionofABAiscurrentlyforeseentobeclosedinMid-2012butremainssubjecttocertainfactorswhicharenotentirelywithinManagement’scontrol,especiallytheapprovalofthetransactionbythelocalcentralbank.Assuchdelaysareconceivable,althoughtheriskofcompletefailureisconsideredlow.Theacquisitionwillbefinancedbyacombinationofequity(toberaisedinacapitalincreaseofamagnitudeofaboutEUR30million)anddebt(withaforeseenborrowingintakeofEUR10millionfromtwodifferentlenders).ThedebtintakewillobviouslyentailachangeofthefinancialriskprofileofAccessHoldingastheCompanywillencounterregulardebtserviceobligationsthatwillneedtobemetfromdividendinflows.Howeverthefinancingagreementshavebeenstructuredinamannerthatallowsforsignificantflexibility(withoutcausingcreditdefaultevents)incaseofunforeseenreductionsordeferralsofdividendincome.
Progressunderitem(ii)isalsopartlydependentonthecorporateapprovalsofco-investors(whosepresenceisconsideredindispensableforriskandcostsharingaswellaspoliticalsupport),regulatoryapprovalsoftherespectivelocalcentralbanksandpotentialadverseeventsinthecountriesofopera-tions(e.g.raisingofminimumcapitalrequirementsforcommercialbanks,majoreconomicdownturns,orcivilwar).Atthecurrentstageofplanning,theGreenfieldinvestmentinBrazilhasthehighestprobabilityoffruitionin2012,whereasinvestmentopportunitiesinRwandahavetobedescribedasuncertain.Forthisreasonitisassumedthatonlytwonewinvesteecompanies(Brazilplusoneother)willbecreatedin2012.Otheropportunitiesarebeingscreenedcontinuouslybuttheaveragesourcingperiodformicrofinancejointventuresofthisnatureisapprox.2-3years.
Item(iii),themigrationofthebankingsoftware,willreceiveparticularattentionin2012astheimple-mentationinthelargestnetworkbank(ABA)startedin2011andwillcontinuethroughout2012and2013.BesideABA,preparationsforthemigrationofatleastoneothernetworkbankareinprocess.Generallythenewsoftwareofferssubstantiallong-termadvantagesforthenetworkbanks,butmayresultinadditionalcostsandabsorbsignificantmanagementattentionintheshortrun.
Lookingbeyond2012,theforecastfor2013foreseesafurtherexpansionofthebankingnetworkfrom9to10networkbanks,withtotalassetsofEUR729million,totalloansofEUR534millionandacombinedafter-taxprofitofEUR17.6millionatyear-end.Giventhatthemajorityofthenetworkbankswillbestillyoungandcomparativelysmallforthetimebeing,theaccuracyofthepredictedgrowthratewillhingelargelyontheresultsofAccessBankAzerbaijan,andtoalesserextentontheolderAfricannetworkbanks(ABM,ABN,andABT).
Berlin,June252012AccessMicrofinanceHoldingAGManagementBoard
61
Auditors’ Report
WehaveauditedtheconsolidatedfinancialstatementspreparedbyAccessMicrofinanceHoldingAG,Berlin,comprisingthestatementoffinancialposition,theincomestatementandstatementofcompre-hensiveincome,statementofchangesinequity,cashflowstatementandthenotestotheconsolidatedfinancialstatements,togetherwiththegroupmanagementreportforthebusinessyearfromJanuary1toDecember31,2011.ThepreparationoftheconsolidatedfinancialstatementsandthegroupmanagementreportinaccordancewiththeIFRSs,asadoptedbytheEU,andtheadditionalrequire-mentsofGermancommerciallawpursuantto§(Article)315a(1)HGB(„Handelsgesetzbuch“:GermanCommercialCode)aretheresponsibilityoftheParentCompany‘sManagementBoard.Ourresponsi-bilityistoexpressanopinionontheconsolidatedfinancialstate-mentsandthegroupmanagementreportbasedonouraudit.
Weconductedourauditoftheconsolidatedfinancialstatementsinaccordancewith§317HGBandGermangenerallyacceptedstandardsfortheauditoffinancialstatementspromulgatedbytheInstitutderWirtschaftsprüfer(InstituteofPublicAuditorsinGermany)(IDW).Thosestandardsrequirethatweplanandperformtheauditsuchthatmisstatementsmateriallyaffectingthepresenta-tionofthenetassets,financialpositionandresultsofoperationsintheconsolidatedfinancialstatementsinaccordancewiththeapplicablefinancialreportingframeworkandinthegroupmanagementreportaredetectedwithreasonableassurance.KnowledgeofthebusinessactivitiesandtheeconomicandlegalenvironmentoftheGroupandexpectationsastopossiblemisstatementsaretakenintoaccountinthedeterminationofauditprocedures.Theeffectivenessoftheaccounting-relatedinternalcontrolsystemandtheevidencesupportingthedisclosuresintheconsolidatedfinancialstatementsandthegroupmanagementreportareexaminedprimarilyonatestbasiswithintheframeworkoftheaudit.Theauditincludesassessingtheannualfinancialstatementsofthoseentitiesincludedinconsolidation,thede-terminationoftheentitiestobeincludedinconsolidation,theaccountingandconsolidationprinciplesusedandsignificantestimatesmadebytheCompany‘sManagementBoard,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatementsandthegroupmanagementreport.Webelievethatourauditprovidesareasonablebasisforouropinion.
Ouraudithasnotledtoanyreservations.
InouropinionbasedonthefindingsofouraudittheconsolidatedfinancialstatementscomplywiththeIFRSsasadoptedbytheEUandtheadditionalrequirementsofGermancommerciallawpursuantto§315a(1)HGBandgiveatrueandfairviewofthenetassets,financialpositionandresultsofoperationsoftheGroupinaccordancewiththeseprovisions.ThegroupmanagementreportisconsistentwiththeconsolidatedfinancialstatementsandasawholeprovidesasuitableviewoftheGroup‘spositionandsuitablypresentstheopportunitiesandrisksoffuturedevelopment.
FrankfurtamMain,June25,2012
PricewaterhouseCoopersAktiengesellschaftWirtschaftsprüfungsgesellschaft
sgd.PeterKleinschmidt sgd.ppa.StefanWißenbachWirtschaftsprüfer Wirtschaftsprüfer(GermanPublicAuditor) (GermanPublicAuditor)
62
AccessHolding|AnnualReport2011
Note 2011 2010 EUR EURInterestincome 11 12.871.974 5.295.709Interestexpense 12 (1.987.728) (83.191)Net interest income before provision for impairment losses on interest bearing assets 10.884.246 5.212.518Impairmentchargeforloanlosses 13 (530.326) (332.221)Net interest income 10.353.920 4.880.297Feeandcommissionincome 14 609.708 877.108Feeandcommissionexpense (17.766) (14.449)Netfeeandcommissionincome 591.942 67Netprofit(loss)fromforeignexchangeoperations 15 161.163 1.065Netprofit(loss)fromsaleofinvestmentsavailable-for-sale 16 – 36.768Netprofit(loss)fromAssociates 17 2.328.585 4.100.934Otherincome 98.938 1.139Net non-interest income 3.180.628 5.002.566Net operating income 13.534.548 9.882.862Personellexpenses (5.394.835) (2.639.267)Depreciationandamortization (1.049.326) (512.311)Otheradministrativeexpenses 18 (6.733.832) (4.611.455)Operating expenses (13.287.993) (7.763.033)Profit (Loss) for the period 356.555 2.119.830CurrentIncometaxexpense 19 (44.089) (449.003)DeferredTaxIncome(Expense) 20 1.016.160 (336.588)Income tax expense 972.071 (785.591)Profit (loss) after tax 1.328.627 1.334.239Profit(loss)attributabletonon-controllinginterests 21 (262.794) (479.700)
Profit (loss) attributable to shareholders 1.591.421 1.813.939
63
Access Microfinance Holding AGStatement of financial positionAs at 31 December 2011Euro
Consolidated Financial Statements for the Year Ended 31 December 2011
Consolidated Financial Statements for the Year Ended 31 December 2011
64
AccessHolding|AnnualReport2011
note 2011 2010 EUR EUR Profit for the year 1.328.627 1.334.239Exchangedifferencesontranslationofforeignoperations 633.301 771.841Shareofothercomprehensiveincome/(expense)ofassociates,netoftax - (2.696)Other comprehensive income of the year, net of tax 633.301 769.145Total comprehensive income of the year 22 1.961.927 2.103.384 Totalcomprehensiveincomeattributableto: Equityholdersoftheparententity(total) 2.216.280 2.624.068Non-controllinginterests(total) (254.353) (520.684)
Total comprehensive income of the year 1.961.927 2.103.384
Access Microfinance Holding AG Consolidated Statement of Comprehensive Income For the year ended 31 December 2011Euro
Note 31December2011 31December2010 EUR EURASSETS Cashandcashequivalents 23 15.778.067 6.512.898Loansandadvancestobanks 2.891.644 3.533.758Investmentsavailableforsale 1.732.275 59.048InvestmentsinAssociates 24 15.614.416 15.362.513Loansandadvancestocustomers 25 45.665.451 13.162.693Intangibleassets 26 2.466.706 638.330Property,plantandequipment 27 5.666.414 3.616.558Currentincometaxasset 28 588 1.208Deferredincometaxasset 29 1.771.657 506.947Otherfinancialassets 29 2.065.021 2.500.000Othernon-financialassets 29 4.416.663 3.945.180Total assets 98.068.902 49.839.134 LIABILITIES Loansfrombanksandotherfinancialinstitutions 30 18.965.980 4.718.940Customeraccounts 31 23.264.997 3.526.836Tradeandotherpayables 32 4.595.561 868.374Currentincometaxliability 18.136-Deferredincometaxliability 33 194.398 765.325Othernon-financialliabilities 34 2.275.397 572.903Total liabilities 49.314.470 10.452.379EQUITY Sharecapital 35 5.839.017 5.513.250Capitalreserve 36 21.979.026 20.858.388Revaluationreserve - 26Currencytranslationdifferences 37 1.033.152 422.000Retainedearnings 38 5.250.009 3.520.935Otherreserves 39 95.325 (19.570)Shareholder equity 34.196.529 30.295.029 Share of Minority Shareholders Equityattributabletonon-controllinginterests 40 14.557.904 9.091.726 Total group equity 48.754.434 39.386.755 Total liabilities and equity 98.068.902 49.839.134
65
Access Microfinance Holding AGStatement of financial positionAs at 31 December 2011 Euro
(Un)paid Item Subscribed contributions Payments Revaluation Currency Other Retained Total Non- Total equity Capital toSubscribed intocapital Surplus Translation Reserves Earnings controlling Capital reserve Differences interests EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR
Carry Forward as at 01 January 2011 5.513.250 - 20.858.388 26 422.000 (19.570) 3.520.935 30.295.029 9.091.72 39.386.755
Profit(loss)fortheyear 1.591.421 1.591.421 (262.794) 1.328.627
Othercomprehensiveincome - - - - - - - 611.151 22.149 633.301
Exchange differences on translation - - - - 611.151 - - 611.151 22.149 633.301
Total comprehensive income 2.202.572 (240.645) 1.961.927
IncreaseinSubscribedCapital 325.767 - - - - - - 325.767 - 325.767
PaidContributionstoCapitalReserve - - 1.120.638 - - - - 1.120.638 - 1.120.638
Currency Translation Effect - - - (4) - - - (4) - (4)
Changeinnon-controllinginterests - - - - - - 137.653 137.653 5.706.823 5.844.476
Other - - - - - 114.874 - 114.874 - -
Balance as at 31 December 2011 5.839.017 - 21.979.026 22 1.033.151 95.304 5.250.009 34.196.529 14.557.904 48.754.434
Consolidated Financial Statements for the Year Ended 31 December 2011
66
AccessHolding|AnnualReport2011
Access Microfinance Holding AG, Berlinstatement of changes in equity for the period from 1 January 2011 to 31 December 2011
67
Access Microfinance Holding AG - Consolidated Cash Flow Statement For the year ended 31 December 2011
2011 2010 EUR EURProfit Profit 1.328.627 1.334.239 Incometax 972.071 785.591 Profitbeforetax 2.300.698 2.119.830Adjustments for non cash items: Shareofprofit(loss)fromAssociates (2.328.585) (4.100.934) Provision/(recoveryofprovision)forimpairmentlossesoninterestbearingassets 530.326 332.630 Translation(gain)/lossonforeignexchangeoperations 165.196 157.996 Depreciationandamortisationexpense 1.049.326 481.172 Interestreceived (12.871.974) (5.295.709) Interestpaid 1.987.728 83.191 Dividendsreceived,netoftax (461.064) (351.367)Cash flows from operating activities before changes in operating assets and liabilities (9.628.350) (6.573.190)Changes in operating assets and liabilities (Increase)/decrease in operating assets: Loansandadvancestobanks 642.114 (3.533.758) Loanstocustomers (32.502.758) (9.286.273) Otherassets (1.301.215) (2.988.359) Interestreceived 12.871.974 5.295.709Increase/(decrease) in operating liabilities Loansandadvancesfrombanks 14.247.040 4.306.435 Customeraccounts 19.738.161 2.183.866 Otherliabilities 4.858.754 736.436 Interestpaid (1.987.728) (83.191)Cash inflow/(outflow) from operating activities before taxation 6.937.993 (9.942.326) Incometaxpaid (516.840) (404.625)Net cash inflow/(outflow) from operating activities 6.421.152 (10.346.951) Cash flow from investment actitivies Purchaseofproperty,plantandequipment (2.828.905) (2.756.144) InvestmentsinAssociatesandassetsavailable-for-sale (1.673.227) (1.371.980) Divdendsreceived 933.949 755.992 SaleofAssociatesandavailable-for-saleassets Net cash inflow/(outflow) from investing activities (3.568.183) (3.372.132)Cash flow from financing actitivies Minorityinteresttosubscribedcapitalofsubsidiaries 5.728.972 5.012.783 ContributiontoSubscribedCapital 325.767 684.750 Proceedsfromissuanceof[ordinary]shares PaymentsintoCapitalReserve 1.120.638 10.498.207Net cash inflow/(outflow) from financing activities 7.175.378 16.195.740 Equityattributabletoothershareholders Effectofchangesinforeignexchangerateoncashandcashequivalents (763.178) 199.991Total Cash flow (763.178) 7.689.431Cash and cash equivalents, beginning of year/period 6.512.898 3.836.250 Cashflowfromoperatingactivities 6.421.152 (10.346.951) Cashflowfrominvestingactivities (3.568.183) (3.372.132) Cashflowfromfinancingactivities 7.175.378 16.195.740 Effectsofexchangeratechanges (763.178) 199.991Cash flow 9.265.169 2.676.648Cash and cash equivalents, end of year/period 15.778.067 6.512.898
Notes to the Consolidated Financial Statements 2011
AccessMicrofinanceHoldingAG(AccessHolding,Company),aJointStockCompanyinaccordancewiththeGermanJointStockCompanyAct,basedinBerlin,Germany,wasfoundedon25August2006andhasitsregisteredofficeatSchönhauserAllee10-11,D-10119Berlin,Germany.ThebusinesspurposeofAccessHolding,asacommercialmicrofinanceholdingcompany,istoinvestinmicrofinanceinstitutions(MFIs)andtodeveloptheseinvestmentsthroughacombinationofequityfinance,holdingservices,andmanagementassistancerenderedbyoneofitsshareholdersandtechnicalpartnerLFSFinancialSystemsGmbH(LFS),Berlin,Germany.
TheconsolidatedfinancialstatementsofAccessHoldingfortheyearended31December2011comprisetheCompanyanditssubsidiaries(togetherreferredtoasthe“Group”andindividuallyas“Groupentities”)andtheGroup’sinterestinassociates.
Theprincipalaccountingpoliciesappliedinthepreparationofthesefinancialstatementsaresetoutbelow.
TheseconsolidatedfinancialstatementsarepresentedinEuro(EUR),whichistheCompany’sfunctionalcurrency.
(1) Compliance with International Financial Reporting StandardsTheconsolidatedfinancialstatementsarepreparedaccordingtoInternationalFinancialReportingStandards(IFRS)andIFRICInterpretationsasendorsedbytheEuropeanUnion(EU),followingsections315apara3inconjunctionwithsection315apara1HGB(GermanCommercialCode).
EU-endorsedIFRSmaydifferfromtheIFRSaspublishedbytheInternationalAccountingStandardsBoard(IASB)iftheEUdoesnotadoptcertainneworamendedIFRS.
Accordingly,theGroup’sconsolidatedfinancialstatementsfortheyear2011havebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)andIFRICinterpretationsadoptedbytheEU.
Recently Adopted Accounting PronouncementsThefollowingneworamendedstandardsandinterpretationshavebecomeeffectiveforfinancialyearsbeginningafter1January2011.ManagementassessesthosestandardsandinterpretationsasrelevantfortheCompany’soperationsasfollows:
ImprovementstoIFRS(2010):InMay2010,amendmentstoIFRSwereissuedbytheIASBwhich resultedinchangesofseveralIFRSandeffectiveforannualperiodsbeginningonorafter1January 2011.
IAS24RelatedPartyDisclosures(2009):Therevisedstandardchangesthedefinitionofarelated partyandalsodisclosurerequirementsforgovernment-relatedentitieswerechanged.
IFRIC19ExtinguishingFinancialLiabilitieswithEquityInstruments(2009)
Thesechangesdon’thaveasignificanteffectontheconsolidatedfinancialstatementsofAccessHoldingfor2011.
Otherstandardsorinterpretationsoramendmentstoexistingstandardsandinterpretationswhichbecameeffectivein2011hadnosignificantimpactontheGroup’sfinancialstatements.
New Accounting PronouncementsAccessHoldinghasnotearlyadopted:
IFRS9Financialinstruments:ClassificationandMeasurement-On12November2009,theIASB issuedIFRS9“Financialinstruments”asthefirststepinitsprojecttoreplaceIAS39“Recognition andMeasurement”.IFRS9replacespartsofIAS39relatingtotheclassificationandmeasurement
68
General information
AccessHolding|AnnualReport2011
offinancialassets.IFRS9introducesnewrequirementsforclassifyingandmeasuringfinancialassets. Thoserequirementsmustbeappliedstarting1January2015(originaleffectivedatewaschanged from1January2013to1January2015),withearlieradoptionpermittedincludingfor2009.The IASBintendstoexpandIFRS9toaddnewrequirementsforclassifyingandmeasuringfinancial liabilities,derecognizingoffinancialinstruments,impairment,andhedgeaccounting.IFRS9is optionalinearlieryears.AtthemomenttheGroupisevaluatingthepotentialimpactontheresults oftheGroup’soperations.
On28October2010theIASBalsoissuedtherequirementsunderIFRS9forfinancialliabilityaccounting. GiventhecurrentstructureofthefinancialstatementsoftheGroupthisstandardwillhaveno materialimpactonthefinancialliabilities.
On7October2010theIASBissuedtherevisedIFRS7.Therevisedstandardenhancesdisclosures abouttransfersoffinancialassets.Giventhecurrentstructureofthefinancialstatementsofthe Grouptheseamendmentswillhavenomaterialimpactonthefinancialliabilities.
InMay2011theIASBissuedIFRS10“ConsolidatedFinancialStatements”,IFRS11“JointArrange- ments”,IFRS12“DisclosureofInterestinOtherEntities”andIFRS13“FairValueMeasurement” whichallhaveaneffectivedateof1January2013.AdditionallytheIASBissuedIAS27“Separate FinancialStatements(2011)”whichsupersedesIAS27(2008)andIAS28“InvestmentsinAssociates andJointVentures(2011)”whichsupersedesIAS28(2008)alsowithaneffectivedateof1January 2013.ThesestandardshaveyettobeendorsedbytheEU.AtthemomenttheGroupisevaluating thepotentialimpactontheresultsoftheGroup’soperations.
On16June2011,theIASBissuedamendmentstoIAS1“PresentationofFinancialStatements”.The presentationofothercomprehensiveincomewaschangedwitheffectivedateof1June2011.Given thecurrentstructureofthefinancialstatementsoftheGrouptheseamendmentswillhavenomaterial impactonthefinancialliabilities.
On20December2010,theIASBissuedamendmentstoIAS12“IncomeTaxes”regardingthedeferred taxesandtherecoveringofUnderlyingAssetswitheffectivedateof1January2012.Giventhecurrent structureofthefinancialstatementsoftheGrouptheseamendmentswillhavenomaterialimpacton thefinancialliabilities.
On16December2011,theIASBissuedamendmentsIAS32“FinancialInstruments:Presentation”. ThechangesaddressOffsettingFinancialAssetsandFinancialLiabilitieswitheffectivedate1January 2014.GiventhecurrentstructureofthefinancialstatementsoftheGrouptheseamendmentswill havenomaterialimpactonthefinancialliabilities.
AllotherStandardsandInterpretationswhichwillbeeffectiveafter2011arenotapplicabletotheGroup’soperations.ManagementbelievetheadoptionoftheseStandardsandInterpretationswillnothaveasignificantimpactontheresultsoftheGroup’soperations.
Amendmentstoexistingstandardsandinterpretationsthatarenotyeteffectivehavenotbeenthesub-jectofearlyadoptionatAccessHolding.Entitiesshallapplythenewstandards,amendmentstoexistingstandardsandinterpretationsforannualperiodsbeginningonoraftertheeffectivedate.
Inprinciple,thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,unlessIFRSrequirerecognitionatfairvalue.ReportingandvaluationareundertakenontheassumptionthattheCompanywillcontinuetooperate.AllestimatesandassumptionsrequiredforreportingandvaluationinconformitywithIFRSarebestestimatesundertakeninaccordancewiththeapplicablestandards.
69
Notes to the Consolidated Financial Statements 2011
Thepreparationofthefinancialstatementsandthevaluationofassetsandliabilitiesaretoacertainextentbasedonassumptionsandestimatesofthemanagement,whichmaydifferfromactualvalue.
(2) Compliance with German lawAccessMicrofinanceHoldingAGisaparentcompanyofsubsidiarieswhicharebanksorfinancialinstitutions.Therefore,AccessHoldingqualifiesasabankforaccountingpurposesaccordingtosection340ipara.3HGB(GermanCommercialCode)andhastopresenttheGroup’sconsolidatedfinancialstatements.
However,forsupervisorypurposesAccessHoldingdoesnotqualifyasabankaccordingtotheGermanBankingAct(KWG)andisthereforenotsupervisedbytheFederalFinancialSupervisoryAuthority(BaFin).InconformitywiththeregulationssetforthbytheFederalFinancialsupervisoryauthority(BaFin),noloansareissuedbyAccessHoldingtocounterpartiesthatdonotqualifyassubsidiariesaccordingtosection1para.7oftheGermanBankingAct(KWG).
AccessGroup’sconsolidatedfinancialstatementshavebeenpreparedinaccordancewithIFRSpursuanttosections315apara.3inconjunctionwithsection315apara.1oftheHGB.Accordingtosection315HGBamanagementreportwasprepared.
AccessMicrofinanceHoldingAGisnotacapitalmarket-orientedparentcompany.Accordinglypresen-tationoftheconsolidatedfinancialstatementsasof31December2011inconformitywithIFRShasbeenundertakenonavoluntarybasis.
TheconsolidatedfinancialstatementsoftheGroupforthefinancialyear2011willbeapprovedforissuebythegeneralassemblyofshareholderson23July2012.Neithertheentity‘sownersnorothershavethepowertoamendthefinancialstatementsafterissue.”
(3) ConsolidationSubsidiariesTheconsolidatedfinancialstatementscomprisethefinancialstatementsofAccessHoldinganditssubsi-diariesasof31December2011.SubsidiariesareallcompanieswhicharecontrolledbyAccessHolding,i.e.forwhichAccessHoldingcandeterminethefinancialandoperatingpoliciesandisabletoexercisecontrolovertheminordertobenefitfromtheiractivities.ThisisthecaseforcompaniesinwhichAccess-Holdingholdsmorethan50%ofthevotingshares.NewsubsidiariesarefullyconsolidatedfromthedatewhencontrolistransferredtotheGroup.Theyaredeconsolidatedfromthedatethatcontrolceases.
Inter-companytransactions,balancesandintragroupgainsontransactionsbetweengroupcompaniesareeliminated.Intragrouplossesarealsoeliminatedunlessthetransactionprovidesevidenceofimpairmentoftheassettransferred.
Theintegrationofthesubsidiariesintotheconsolidatedfinancialstatementsisbasedonconsistentaccountingandvaluationmethodsforsimilartransactionsandotheroccurrencesundersimilarcircum-stances.
AssociatesAssociatesareentitiesoverwhichAccessHoldinghassignificantinfluencebutnotcontrol.
Investmentsinassociatesareaccountedforbytheequitymethodandareinitiallyrecognisedatcost.TheGroup’sinvestmentinassociatesincludesgoodwill(netofanyaccumulatedimpairmentloss)identifiedonacquisition.
70
AccessHolding|AnnualReport2011
TheGroup’sshareofitsassociates’post-acquisitionprofitsorlossesisrecognisedintheconsolidatedincomestatement;itsshareofpost-acquisitionmovementsisrecognisedinreserves.Thecumulativepost-acquisitionmovementsareadjustedagainstthecarryingamountoftheinvestment.WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganyotherunsecuredreceivables,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.
IntragroupgainsontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextentoftheGroup’sinterestintheassociates.Intragrouplossesarealsoeliminatedunlessthetransactionpro-videsevidenceofanimpairmentoftheassettransferred.Forpreparationofconsolidatedfinancialstate-ments,equalaccountingpolicesforsimilartransactionsandothereventsinsimilarcircumstancesareused.
Dilutiongainsandlossesinassociatesarerecognisedinequity.
TheclassificationofentitiesasAssociatesisdescribedinnote23.
Transactions and non-controlling interestsTheGroupappliesapolicyoftreatingtransactionswithnon-controllinginterestsastransactionswithequityownersoftheGroup.Forpurchasesfromnon-controllinginterests,thedifferencebetweenanyconsiderationpaidandtherelevantshareacquiredofthecarryingvalueofnetassetsofthesubsidiaryisrecordedinequity.Gainsorlossesondisposalstonon-controllinginterestsarealsorecordedinequity.
Interestsintheequityofsubsidiariesnotattributabletotheparentarereportedinconsolidatedequityasnon-controllinginterest.Profitsorlossesattributabletonon-controllinginterestsarereportedintheconsolidatedcomprehensiveincomeasprofitorlossattributabletonon-controllinginterests.
Business combinationsAccessHoldingusestheacquisitionmethodtoaccountforbusinesscombinations.Theconsiderationtransferredfortheacquisitionofasubsidiaryisthefairvaluesoftheassetstransferred,theliabilitiesincurredtotheformerownersoftheacquireeandtheequityinterestsissuedbythegroup.Theconside-rationtransferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.Thegrouprecognisesanynon-controllinginterestintheacquireeonanacquisition-by-acquisitionbasis,atthenon-controllinginterest’sproportionateshareoftherecognisedamountsofacquiree’sidentifiablenetassets.
Ifthebusinesscombinationisachievedinstages,theacquisitiondatefairvalueoftheacquirer’spre-viouslyheldequityinterestintheacquireeisre-measuredtofairvalueattheacquisitiondatethroughprofitorloss.
Goodwillisinitiallymeasuredastheexcessoftheaggregateoftheconsiderationtransferredandthefairvalueofnon-controllinginterestoverthenetidentifiableassetsacquiredandliabilitiesassumed.Ifthisconsiderationislowerthanthefairvalueofthenetassetsofthesubsidiaryacquired,thediffe-renceisrecognisedinprofitorloss.
(4) Accounting PoliciesRevenue recognition and Interest Income and ExpenseInterestincomeandexpenseforallinterest-bearingfinancialinstruments,exceptforthoseclassifiedasheldfortradingordesignatedasatfairvaluethroughprofitorloss,arerecognisedwithin‘interestincome’and‘interestexpense’intheincomestatementusingtheeffectiveinterestmethod.
71
Notes to the Consolidated Financial Statements 2011
Onceafinancialassetoragroupofsimilarfinancialassetshasbeenwrittendownasaresultofanim-pairmentloss,interestincomeisrecognisedusingtherateofinterestusedtodiscountthefuturecashflowsforthepurposeofmeasuringtheimpairmentloss.Forloanswherethereisobjectiveevidencethatanimpairmentlosshasbeenincurred,theaccrualofinterestincomeisterminatednotlaterthan90daysafterthelastpayment.Paymentsreceivedinrespectofwritten-offloansarerecordedintheconsolidatedstatementsofincomeasacomponentoftheprovisionforcreditlosses.
Loan related feesFeesandcommissionsarerecognisedonanaccrualbasiswhentheservicehasbeenprovided.Loancommitmentfeesforloansthatarelikelytobedrawndownaredeferred(togetherwithrelateddirectcosts)andrecognisedasanadjustmenttotheeffectiveinterestrateontheloan.
Commissionandfeesarisingfromnegotiating,orparticipatinginthenegotiationof,atransactionforathirdparty–suchasthearrangementoftheacquisitionofsharesorothersecuritiesorthepurchaseorsaleofbusinesses–arerecognisedoncompletionoftheunderlyingtransaction.
Disclosure of financial assetsTheGroupallocatesfinancialassetstothefollowingIAS39categories:loansandreceivablesandavailable-for-salefinancialassets.Managementdeterminesthecategorizationofitsfinancialinstru-mentsatinitialrecognition.
Financialassetsareclassifiedascashandcashequivalents,loansandadvancestocustomers,invest-mentsavailableforsaleandotherfinancialassets.
Thefairvalueofeachclassoffinancialinstrumentcorrespondstoitsbookvalue.Seealsonote43.
Cash and cash equivalentsCashandcashequivalentscomprisecashathandandbalanceswithlessthanthreemonths’originalmaturity.Cashandcashequivalentsaredesignatedasavailableforsalefinancialassetsandmeasuredatfairvalue.
Loans and advances to customersLoansandadvancestocustomersarenon-derivativefinancialassetswithfixedordeterminablepay-mentsthatarenotquotedinanactivemarket.TheyarisewhentheGroupprovidesmoneydirectlytoadebtorwithnointentionoftradingthereceivable.
Loansandreceivablesareinitiallyrecognisedatfairvalueplustransactionscosts;subsequentlytheyaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Ateachbalancesheetdateandwheneverthereisevidenceofpotentialimpairment,theGroupassessesthevalueofitsloansandreceivables.Theircarryingamountmaybereducedasaconsequencethroughtheuseofanallowanceaccount.Iftheamountoftheimpairmentlossdecreases,theimpairmentallowanceisreducedaccord-ingly,andtheamountofthereductionisrecognisedintheincomestatement.Theupperlimitonthereductionoftheimpairmentisequaltotheamortisedcostswhichwouldhavebeenincurredasofthevaluationdateiftherehadnotbeenanyimpairment.
Afinancialassetisimpairedifobjectiveevidenceindicatesthatalosseventhasoccurredaftertheinitialrecognitionoftheasset,andthatthelosseventhadanegativeeffectontheestimatedfuturecashflowsofthatassetthatcanbeestimatedreliably.
Objectiveevidencethatfinancialassetsareimpairedcanincludedefaultordelinquencybyadebtor,restructuringofanamountduetotheGroupontermsthattheGroupwouldnotconsiderotherwise,
72
AccessHolding|AnnualReport2011
indicationsthatadebtororissuerwillenterbankruptcy,adversechangesinthepaymentstatusofbor-rowersintheGroupandeconomicconditionsthatcorrelatewithdefaults.Loansarerecognisedwhentheprincipalisadvancedtotheborrowers.LoansandreceivablesarederecognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredorwheretheGrouphastransferredsubstantiallyallrisksandrewardsofownership.
Allloansandadvancestocustomersareclassifiedasloansandreceivables(LaR).Investments available for sale Availableforsalefinancialassetsarethosenonderivativefinancialassetsthataredesignatedasavailableforsaleorarenotclassifiedas(i)loansandreceivables,(ii)held-to-maturityinvestmentsor(iii)financialassetsatfairvaluethroughprofitorloss.Thosefinancialassetsaregenerallymeasuredatfairvaluewhichequalsacquisitioncostsattheacquisitiondate.Fairvaluesaredeterminedusingavaluationtechnique.Valuationtechniqueusedisbasedonobservablecurrentmarkettransactions.Changingoneormoreofthoseassumptionstoreasonablypossiblealternativeassumptionswouldnotchangefairvaluesignificantly.
Changesinthefairvalueofavailableforsalefinancialassetsarerecognisedinequity/othercompre-hensiveincomeuntilthefinancialassetsareeithersoldorbecomeimpaired.
DuemissingrelevanceforthefinancialstatementsofAccessHoldingdisclosuresregardingavailableforsaleassetswillonlybemadeinrespectofrelevancetotheGroup.
Held-to-maturity financial assetsHeld-to-maturityinvestmentsarenon-derivativefinancialassetswithfixedordeterminablepaymentsandfixedmaturitiesthattheGroup’smanagementhasthepositiveintentionandabilitytoholdtomaturity,otherthan:(a) thosethattheGroupuponinitialrecognitiondesignatesasatfairvaluethroughprofitorloss;(b) thosethattheGroupdesignatesasavailableforsale;and(c) thosethatmeetthedefinitionofloansandreceivables.
Theseareinitiallyrecognisedatfairvalueincludingdirectandincrementaltransactioncostsandmea-suredsubsequentlyatamortisedcost,usingtheeffectiveinterestmethod.
Interestonheld-to-maturityinvestmentsisincludedintheconsolidatedincomestatementandreportedasinterestfromheldtomaturityfinancialassets.Inthecaseofanimpairment,theimpairmentlossisbeenreportedasadeductionfromthecarryingvalueoftheinvestmentandrecognisedintheconsoli-datedincomestatementas‘Netgains/(losses)oninvestmentsecurities’.
Property, plant and equipment (PPE)Allproperty,plantandequipmentisstatedathistoricalcostlessdepreciationandimpairmentlosses.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.
Intangible Assets:Acquiredcomputersoftwarelicencesarecapitalisedonthebasisofthecostsincurredtoacquireandbringtousethespecificsoftware.Thesecostsareamortisedonthebasisoftheexpectedusefullives.
GoodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueoftheGroup’sshareofthenetidentifiableassetsofacquiredsubsidiariesandassociatesatthedateofacquisition.Goodwillonacquisitionsofsubsidiariesisincludedinintangibleassets.Goodwillonacquisitionsofassociatesisincludedininvestmentsinassociates.
73
Notes to the Consolidated Financial Statements 2011
DepreciationDepreciationonproperty,plantandequipmentandintangibleassets(excludinggoodwill)iscalculatedusingthestraight-linemethodtoallocatetheircosttotheirresidualvaluesovertheirestimatedusefullives,asfollows:
Buildings15–40years Leaseholdimprovementsshorterofleasetermorusefullife Computers2–5years Furniture5–10years Motorvehicles3–5years Otherfixedassets2–7years Landisnotdepreciated.
Theassets’residualcarryingvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachbalancesheetdate.Bothassetsthataresubjecttodepreciationandlandarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecovera-ble.Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountexceedsitsestimatedrecoverableamount.Therecoverableamountisthehigheroftheasset’sfairvaluelesscoststosellandvalueinuse.Gainsandlossesondisposalsaredeterminedbycomparingproceedswithcarryingamount.Theseareincludedintheincomestatement.
Current and deferred income taxTheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingtheworldwideprovisionforincometaxes.Therearemanytransactionsandcalculationsforwhichtheultimatetaxdeterminationisuncertain.TheGrouprecognisesliabilitiesforanticipatedtaxauditissuesbasedonestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpactthecurrentanddeferredincometaxassetsandliabilitiesintheperiodinwhichsuchdeterminationismade.
Thetaxexpensefortheperiodcomprisescurrentanddeferredtax.Taxisrecognisedintheincomestatement,excepttotheextentthatitrelatestoitemsrecogniseddirectlyinequity.Inthiscase,thetaxisalsorecognisedinequity.ThecurrentincometaxchargeiscalculatedonthebasisofthetaxlawsenactedorsubstantivelyenactedatthebalancesheetdateinthecountrieswheretheCompany’ssubsidiariesandassociatesoperateandgeneratetaxableincome.Managementperiodicallyevaluatespositionstakenintaxreturnswithrespecttosituationsinwhichapplicabletaxregulationissubjecttointerpretation.Itestablishesprovisionswhereappropriateonthebasisofamountsexpectedtobepaidtothetaxauthorities.
Deferredincometaxisrecognised,usingtheliabilitymethod,ontemporarydifferencesarisingbet-weenthetaxbasesofassetsandliabilitiesandtheircarryingamountsintheconsolidatedfinancialstatements.However,thedeferredincometaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransac-tionaffectsneitheraccountingnortaxableprofitnorloss.Deferredincometaxisdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstantiallyenactedbythebalancesheetdateandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.
Deferredincometaxassetsincludingcarry-forwardtax-lossesarerecognisedonlytotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthetemporarydifferences,taxcreditsorunusedtaxlossescanbeutilised.Deferredincometaxisprovidedontemporarydifferencesarisingoninvestmentsinsubsidiariesandassociates,exceptwherethetimingofthereversalofthetemporarydifferenceiscontrolledbytheGroupanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.
74
AccessHolding|AnnualReport2011
Loans from banks and other financial institutions and Customer accountsLiabilitiesfrombanksandotherfinancialinstitutionsandCustomeraccountsarerecognisedinitiallyatfairvaluenetoftransactioncostsincurred.Borrowingsaresubsequentlystatedatamortisedcost;anydifferencebetweenproceedsnetoftransactioncostsandtheredemptionvalueisrecognisedintheincomestatementovertheperiodoftheborrowingsusingtheeffectiveinterestrate.
Allfinancialliabilitiesarederecognisedwhentheyareextinguished–thatis,whentheobligationisdischarged,cancelledorexpires.
LoansfrombanksandotherfinancialinstitutionsandCustomeraccountsaredesignatedasfinancialliabilitiesatamortisedcost.
Trade and other payables and Other LiabilitiesGenerally,TradeandotherpayablesandOtherLiabilitiesarerecognisedinitiallyatfairvaluenetoftransactioncostsandsubsequentlymeasuredatamortisedcost.
FinancialliabilitiesclassifiedastradeandotherpayablesorOtherLiabilitiesaregenerallydesignatedasfinancialliabilitiesatamortisedcost.
LeasesLeasesinwhichasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleases(netofanyincentivesrecei-vedfromthelessor)arechargedtotheincomestatementonastraight-linebasisovertheperiodofthelease.TheGroupleasesofficepremises.
Agreementswhichtransfertothelesseesubstantiallyalltherisksandrewardsincidentaltotheowner-shipofassets,butnotnecessarilyalegaltitle,areclassifiedasfinanceleases.AccessHoldingdoesnotleaseassetsinfinanceleases.
Government Grants:AccessHoldingappliestheincomeapproachunderwhichagrantisrecognisedinprofitorlossoveroneormoreperiods.InmostcasestheperiodsoverwhichAccessHoldingrecognisesthecostsorexpensesrelatedtogovernmentgrantsarereadilyascertainable.Thusgrantsinrecognitionofspecificexpensesarerecognisedinprofitorlossinthesameperiodastherelevantexpenses.Thereforegovernmentgrantsareneithershowninthestatementoffinancialpositions(balancesheet)norintheincomestatement(profit/loss).InlinewithIAS20.39informationregardinggrantsaredisclosedinthesenotes.
Share based paymentsAspartofthemanagementservicecontract,aperformancefeeispayabletoLFS.Asalternativetocashpayment,themanagementservicecontractprovidesforthepossibilitytoissueyoungsharetosettletheperformancefee.ThemanagementassumesthatthefeewillbesettledincashaccordingtoIFRS2.41pp.
(5) Critical Estimates and JudgementsEstimatesandjudgementsarecontinuallyevaluatedandarebasedonexperienceandotherfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:
75
Notes to the Consolidated Financial Statements 2011
Associates:Associatesaresubjecttoimpairmentreview.TheGrouprecordsimpairmentlossesonassetsinthiscategorywhentheGroupbelievesthatthecarryingvaluemaynotberecoverable.Thedeterminationoftherecoverableamountintheimpairmentassessmentrequiresestimatesonmarketprice,pricesofcomparablebusinessesorothervaluationtechniques.
Loans and advances to customers:Eachbankregularlyreviewsitsloanportfoliostoassessimpairment.Indeterminingwhetheranimpairmentlossshouldberecordedinprofitorlossfortheyear,theGroupmakesjudgementsastowhetherthereisanyobservabledataindicatingthatthereisameasurabledecreaseintheestimatedfuturecashflowsfromaportfolioofloansbeforethedecreasecanbeidentifiedwithanindividualloaninthatportfolio.Thisevidencemayincludeobservabledataindicatingthattherehasbeenanadversechangeinthepaymentstatusofborrowersinagroup,ornationalorlocaleconomicconditionsthatcorrelatewithdefaultsonassetsinthegroup.TheGroupusesestimatesbasedonhistoricallossexperienceforassetswithcreditriskcharacteristicsandobjectiveevidenceofimpairmentsimilartothoseintheportfoliowhenschedulingitsfuturecashflows.Themethodologyandassumptionsusedforestimatingboththeamountandtimingoffuturecashflowsarereviewedregularlytoreduceanydifferencesbetweenlossestimatesandactuallossexperience.
Property, Plant and Equipment:TheGrouptestsannuallywhetherproperty,plantandequipmentsufferedanyimpairment,inaccordancewiththeaccountingpolicystatedabove.Therecoverableamountsofcashgeneratingunitshavebeendeterminedbasedonvalue-in-usecalculations.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.
Animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamount.Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortization,ifnoimpairmentlosshadbeenrecognised.
Noproperty,plantandequipmentwereimpairedasat31December2011(2010:nil).
Intangible Assets:Ateachdateoftheconsolidatedstatementoffinancialposition,intangibleassetsincludinggoodwillarereviewedforindicationsofimpairmentorchangesinestimatedfutureeconomicbenefits.Ifsuchindicationsexist,theintangibleassetsareanalysedtoassesswhethertheircarryingamountisfullyrecoverable.Animpairmentlossisrecognisedifthecarryingamountexceedstherecoverableamount.Animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodeterminetherecoverableamount.Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortization,ifnoimpairmentlosshadbeenrecognised.
Nointangibleassetswereimpairedasat31December2011(2010:nil).
Income Taxes:Forunusedtaxlossestheestimationoffutureprofitscanbeacriticalaccountingestimate.
(6) Foreign Currency TranslationFunctionalandpresentationcurrencyItemsincludedinthefinancialstatementsaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).
76
AccessHolding|AnnualReport2011
ThefinancialstatementsarepresentedinEUR,whichisAccessHolding’sfunctionalandpresentationcurrency.
Transactions and balancesForeigncurrencytransactionsrelatedtosharedealsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactionsorarebasedonactualmonthlyaverageforeignexchangeratesfordaytodaybusiness.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatyear-endexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheincomestatement.
CurrencytranslationdifferencesonInvestmentinAssociatesarerecogniseddirectlyintheequitypositionandinothercomprehensiveincome.
SubsidiariesTheresultsandfinancialpositionsofthesubsidiarieswhosefunctionalcurrencyisnottheEURaretranslatedintothepresentationcurrencyasfollows:
Balancesheetitemsexcludingequitycomponentsaretranslatedattheclosingrateatthedateof thatbalancesheet;equitycomponentsaretranslatedatthehistoricalexchangerateofthefirst-time recognitioninGroupEquity.
ItemsoftheIncomeStatementandexpensesforeachincomestatementaretranslatedatthe averageexchangerateoftheyear(ortheoperatingperiod,ifnotafullyear).
Onconsolidation,exchangedifferencesarisingfromthetranslationofthenetinvestmentinforeignentitiesarerecognisedinshareholders’equityas“translationreserve”.Thereportingexchangeratesandaverageratesfortheperiodusedintheconsolidatedbalancesheetandtheconsolidatedincomestatementarelistedbelow.
NoneofthegroupcompaniesislocatedinahyperinflationeconomyasdefinedbyIAS29.
Thefollowingexchangerateswereappliedinthesefinancialstatements.
1 Euro equals Abbreviation 31/12/2010 Average 2011 31/12/2011
AzerbaijanNewManat AZN 1.06 n/a 1.02LiberianDollar LRD 95.42 93.23 93.23MalagasyAriari MGA 2,881.60 n/a 2,843.451000NigerianNaira NGN 0.20 0.21 0.21TajikSomoni TJS 5.84 6.42 6.16TanzanianShilling TZS 1,997.23 2,176.20 2,015.74ZambianKwacha ZMK 6,301.35 6,678.97 6,514.27UnitedStatesDollar USD 1.33 n/a 1.29
Thefollowingtableshowtheimpactofcurrencychangesby+/-10%oncurrencytranslationdifferencesandcashandcashequivalents.Currency Impact on currency translation differences -10% 0% +10%NGN 742,458 1,033,152 1,414,618LRD 638,401 1,033,152 1,515,624TJS 720,530 1,033,152 1,415,245ZMK 842,258 1,033,152 1,266,466TSH 829,828 1,033,152 1,281,659Impact on Cash and cash equivalents -10% 0% +10%USD 739,111 7,391,108 (739,111)
77
Notes to the Consolidated Financial Statements 2011
(7) Group companiesTheseconsolidatedfinancialstatementscontainthefullfinancialstatementsofAccessHolding,AccessBankLiberia(ABL),ABMicrofinanceBankNigeria(ABN),CJSCAccessBankTajikistan(ABTJ),AccessBankTanzaniaLtd(ABT),andABBankZambia(ABZ).
ABLwasincorporatedon1August2008underthelawsofLiberiaandopenedforbusinesson22January2009.ThesharecapitalwasUSD11,285,000asofDecember2011.Asof31December2011,AccessHoldingowned55.7%ofthesharesofABL(53.5%in2010).ThetotalinvestmentofAccessHoldingwasEUR4,444,990.11andEUR4,033,103.13andasof31December2011and31December2010,respectively.
ABNwasincorporatedon16May2008and,afterreceivingalicenseasaUnitlevelmicrofinancebankunderthelawsofNigeria,startedoperationson10November2008.Capitalisationwascompletedwithseveralinvestmentsofminorityshareholdersduring2010.AccessHoldingowned50.1%ofABN’ssharesasof31December2011(58.4%in2010).ThetotalinvestmentofAccessHoldingwasEUR3,935,857.52asof31December2011(EUR3,647,348.61asin2010).
ABTJwasincorporatedinMarch2010andstartedoperationson12April2010afterreceivingafullban-kinglicenseunderthelawofTajikistan.AccessHoldingowns52%ofABTJ’ssharesasof31December2011.ThetotalinvestmentofAccessHoldingwasEUR4,213,340.31asof31December2011(EUR4,213,340.31in2010).
ABTwasincorporatedinAugust2007andopeneditsdoorson21November2007.ThroughacapitalincreaseinOctober2011,AccessHoldingincreaseditsshareholdingfrom46.98%to50.73%.Conse-quently,thestatusforABTchangedin2011,fromanassociatetoasubsidiarycompany.Attheendof2011,thetotalinvestmentofAccessHoldinginABTstoodatEUR3.3million.
Thestep-acquisitionaccordingtoIFRS3wasproceededlikethis:CarryingamountofpreviouslyheldinterestunderIAS28 2,040,158.18Fairvalueofpre-existingstakes 1,533,502.33Loss of de-recognition -506,655.85CashConsiderationtransferred 583,122.11Considerationtransferredtotal 2,116,624.44ThelossofEUR506.656wasrecognizedasNetprofit(loss)fromAssociates.
Goodwillwasrecognizedasfollows:Considerationtransferredtotal 2,116,624.44Non-controllinginterest 2,019,684.24Sub-total 4,136,308.68Fairvalueofnetassets 4,096,722.59Goodwill 39,586.09TheGoodwillofEUR39,586isshownaspartoftheintangibleassets.
ABZwasincorporatedin2011andoperationsstartedon18October2011afterreceivingafullbankinglicenseundertheZambianlaw.In2011,AccessHoldinginvestedintotalEUR2,318,307.75,representing51.0%ofthetotalsharecapital.
Apartfromtheequityinvestmentsandthetreatmentofequityandprofit(loss)ofminorityinvestors,therearenoothertransactionswithintheGroup,whicharenotshownintheConsolidatedFinancialStatements.
78
AccessHolding|AnnualReport2011
In2011theaveragenumberofstaffforallconsolidatedcompanieswas1,231(2010:564).Thefollowingtableshowsthenumberofbusinessloanofficersandbankingserviceofficers(allaverage).
Number of staff AverageNumber 1,231 #BusinessLoanOfficers 494 #BankingServicesOfficers 201
(8) Portfolio reporting on statement of consolidated income
Earningspershare,calculatedinaccordancewithIAS33,arebasedontheconsolidatedsurplusattribu-tabletoAccessHoldingshareholders.Sofar,noconversionandoptionrightswereoutstandingduringthecurrentfinancialyear.Thefigurefordilutedearningspersharewasthereforeidenticaltotheundilutedfigure.Thedenominatorfortheearningpershareisthenumberofoutstandingsharesbytheendoftheperiod.
Increasesinthenetinterestincome,thefeecommissionincomeandtheoperatingexpensesareduetothegrowthoftheconsolidatedbanksandthenewlyconsolidatedbanks.PleasenotthatABTwasconsoli-datedstartingfrom1November2011.
EUR Note 2011 2011 2010 Holding ABL ABN ABTJ ABZ ABT Total Total
Interestincome 10 73,422 2,295,159 7,122,908 2,558,596 63,839 758,049 12,871,974 5,295,709
Interestexpense 11 (85,214) 1,379,171) (388,200) (4,948) (130,196) (1,987,728) (83,191)Net interest income beforeprovision for impairment losseson interest bearing assets 73,422 2,209,945 5,743,738 2,170,396 58,891 627,853 10,884,246 5,212,518
Impairmentchargeforloanlosses 12 (138,687) (51,882) (309,656) (7,695) (22,405) (530,326) (332,221)
Net interest income 73,422 2,071,258 5,691,856 1,860,741 51,196 605,448 10,353,920 4,880,297
Feeandcommissionincome 13 333,613 181,818 21,039 9,919 63,319 609,708 877,108
Feeandcommissionexpense - - - (17,766) - (17,766) (14,449)
Netfeeandcommissionincome - 333,613 181,818 3,273 9,919 63,319 591,942 67
Netprofit(loss)fromforeign
exchangeoperations 14 10,814 84,092 - 10,597 55,255 405 161,163 1,065
Netprofit(loss)fromsaleof
investmentsavailable-for-sale 15 - 36,768
Netprofit(loss)fromAssociates 16 2,328,585 2,328,585 4,100,934
Otherincome 664 779 96,501 994 98,938 1,139
Net non-interest income 2,340,063 417,705 967,899 14,649 161,675 64,719 3,966,709 5,002,566
Net operating income 2,413,485 2,488,963 5,873,674 1,875,390 212,871 670,166 13,534,548 9,882,862
Personnelexpenses (942,207)(2,551,371) (1,217,897) (339,120) (344,240) (5,394,835) (2,639,267)
Depreciationandamortization -
Otheradministrativeexpenses 17 (387,648) (284,074) (235,476) (80,679) (61,450) (1,049,326) (512,311)
Operatingexpenses (1,403,648) (1,596,353) (1,982,399)(1,039,771) (390,657) (321,003) (6,733,832) (4,611,455)
Profit(Loss)fortheperiod (1,403,648) (2,926,208) (4,817,844)(2,493,143) (920,457) (726,692)(13,287,993) (7,763,033)
CurrentIncometaxexpense 19 1,009,837 (437,246) 1,055,830 (617,753) (597,586) (56,526) 356,555 2,119,830
DeferredTaxIncome(Expense) 18 (17,440) (26,649) (44,089) (449,003)
Income tax expense 927,019 (143,739) 231,658 1,222 1,016,160 (336,588)
Profit (loss) after tax 1,936,856 (437,246) 894,651 (644,402) (365,928) (55,304) 1,328,627 1,334,239
Profit(loss)attributableto
non-controllinginterests 20 (193,700) 446,789(309,313) (179,305) (27,265) (262,794) (479,700)
Profit (loss) attributable to
shareholders 1,936,856 (243,546) 447,862 (335,089) (186,624) (28,039) 1,591,421 1,813,939
79
Notes to the Consolidated Financial Statements 2011
(9) Portfolio reporting on comprehensive income
EUR Note 2011 2011 2010 Holding ABL ABN ABTJ ABZ ABT Total Total
Profit for the year 1,936,856 (437,246) 894,651 (644,402) (365,928) (55,304) 1,328,627 1,334,239
Exchangedifferenceson
translationofforeign
operations 626,101 (81,448) 125,557 1,537 (12,033) (26,414) 633,301 771,841
Shareofothercomprehensive
income/(expense)of
associates,netoftax - - - - (2,696)
Other comprehensive
income of the year, net of tax 626,101 (81,448) 125,557 1,537 (12,033) 26,414) 633,301 769,145
Totalcomprehensiveincome
oftheyear 21 2,562,957 (518,693) 1,020,208 (642,865) (377,961) (81,718) 1,961,927 2,103,384
Totalcomprehensiveincome
attributableto:
Equityholdersoftheparent
entity(total) 2,562,957 (288,912) 510,716 (334,290) (192,760) (41,431) 2,216,280 2,624,068
Non-controllinginterests
(total) - (229,781) 509,492 (308,575) (185,201) (40,287) (254,353) (520,684)
80
AccessHolding|AnnualReport2011
(10) Portfolio reporting on statement of financial position
Thedifferencesbetween2010and2011inthestatementoffinancialpositioncanbeexplainedtoalargeextentbythegrowthoftheconsolidatedbanksandthenewlyconsolidatedABT.
EUR Note 2011 2011 2010 Holding ABL ABN ABTJ ABZ ABT Total Total
ASSETS
Cashandcashequivalents 22 600,762 5,905,811 803,647 954,684 684,302 6,828,861 15,778,067 6,512,898
Loansandadvancestobanks 2,891,644 2,891,644 3,533,758
Investmentsavailableforsale 125,911 1,606,364 1,732,275 59,048
InvestmentsinAssociates 23 15,614,416 15,614,416 15,362,513
Loansandadvancestocustomers 24 4,069,830 16,943,185 9,158,768 400,124 15,093,544 45,665,451 13,162,693
Intangibleassets 25 39,586 683,563 878,400 152,118 713,039 2,466,706 638,330
Property,plantandequipment 26 1,966,970 884,670 1,202,201 1,041,925 570,648 5,666,414 3,616,558
Currentincometaxasset 27 588 588 1,208
Deferredincometaxasset 28 969,902 205,259 237,515 358,982 1,771,657 506,947
ReceivablesfromSubsidiaries - -
Otherfinancialassets 2,065,021 2,065,021 2,500,000
Othernon-financialassets 29 29,271 677,642 1,357,127 302,538 153,838 1,896,248 4,416,663 3,945,180
Total assets 19,319,545 13,303,815 20,319,800 15,388,236 4,276,185 25,461,322 98,068,902 49,839,134
LIABILITIES
Loansfrombanksandother
financialinstitutions 30 8,119,916 8,119,522 2,726,542 18,965,980 4,718,940
Customeraccounts 31 5,094,305 2,172,687 237,941 85,246 15,674,819 23,264,997 3,526,836
Debtsecuritiesissued - -
Currentincometaxpayable 18,136 18,136 -
Tradeandotherpayables 32 691,656 3,150,851 73,626 679,428 4,595,561 469,868
Currentincometaxliability -
Deferredincometaxliability 33 194,398 194,398 765,325
Othernon-financialliabilities 34 413,722 417,613 1,444,061 2,275,397 971,410
Total liabilities 886,054 5,508,028 13,461,590 8,775,076 158,872 20,524,850 49,314,470 10,452,379
EQUITY
Sharecapital 35 5,839,017 5,839,017 5,513,250
Capitalreserve 36 21,979,026 21,979,026 20,858,388
Revaluationreserve - 26
Currencytranslationdifferences 37 955,635 (49,053) 144,260 1,838 (6,137) (13,392) 1,033,152 422,000.38
Retainedearnings 38 6,810,826 (395,690) (347,470) (614,154) (186,624) (16,879) 5,250,009 3,520,935
Otherreserves 39 (19,570) 22 114,874 95,325 (19,570)
Total equity 35,564,934 (444,743) (203,188) (612,316) (192,760) 84,603 34,196,529 30,295,029
Share of Minority Shareholders 40 44.30% 49.94% 48.00% 49.00% 49.30%
Equityattributableto
non-controllinginterests 40 3,453,534 3,424,990 3,174,3172,071,383 2,433,681 14,557,904 9,091,726
Total group equity 48,754,434 39,386,755
Total liabilities and equity 98,068,903 49,839,134
81
Notes to the Consolidated Financial Statements 2011
(11) Interest income Interestincomeisbrokendownasfollows:
(14) Fee and commission incomeFeeandcommissionincomeisbrokendownasfollows:
(12) Interest expense Interestexpenseisbrokendownasfollows:
(13) Impairment charges ImpairmentchargeswereestablishedforloanstocustomersinABL,ABN,ABTJ,ABTandABZ.
2011 2010 Interest From loans From bank Interest income Interest income Income to customers accounts available-for-sale held-to-maturity Total TotalAH 71,188 2,235 - 73,422 59,372ABL 2,295,159 2,295,159 1,761,030ABN 2,300,056 257,605 935 2,558,596 2,690,608ABTJ 7,117,311 5,598 - 7,122,908 784,698ABZ 26,341 37,497 63,839 -ABT 741,479 16,571 758,049 -Total 12,551,533 282,008 37,497 935 12,871,974 5,295,709
Fee and Loans and Other non- Other non- 2011 2010 commission advances Customer financial financial Income to customers accounts assets liabilities Total TotalABL - 333,543 - - 333,613 346,408ABN - 21,039 - - 21,039 437,644ABTJ - 181,818 - 181,818 93,056ABZ 9,035 884 - 9,919 -ABT 9,966 47,726 - 5,628 63,319 -Total 19,001 584,126 884 5,628 609,708 877,108
FeeandcommissionexpensesamountingtoEUR17,766wererealizedin2011(2010:EUR14,449).
Loans from banks 2011 2010 Interest Customer and other financial expenses accounts institutions Total TotalABL (85,214) - (85,214) (36,319)ABN (95,783) (1,283,388) (1,379,171) (37,928)ABTJ (28,051) (360,148) (388,200) (8,944)ABZ (4,948) - (4,948) -ABT (98,307) (31,890) (130,196) -Total (209,048) (1,643,536) (1,987,728) (83,191)
2011 2010Impairment chargefor loan losses (530,326) (332,221) Total (530,326) (332,221)
82
AccessHolding|AnnualReport2011
83
(15) Net profit (loss) from foreign exchange operationsThenetforeignexchangegainduetoforeigncurrencytransactionsisasfollows:Net profit from 2011 2010foreign exchange operationsAH 10,814 20,372ABL 84,092 (14,835)ABTJ 10,597 (4,472)ABZ 55,255 -ABT 405 -Total 161,163 1,065
(16) Net profit from investments available-for-saleNonetprofitfrominvestmentsavailable-for-saleaccruedin2011(2010:EUR36,768).
(17) Net profit (loss) from AssociatesAccessHoldingrecognisesitsshareintheprofitorlossofAssociates.Net profit (loss) 2011 2010from AssociatesABA 2,804,481 4,088,279ABM 30,761 2,944ABT (506,656) 9,711Total 2,328,585 4,100,934
AccessBank Azerbaijan:Seealsonote24forinformationontheAssociate.AccessBankAzerbaijan(ABA)reportedanetprofitofEUR16,966,005.11.Withashareholdingof16.53%,theprofitattributabletoAccessHoldingamountstoEUR2,804,480.64.
AccèsBanque Madagascar S.A.:Seealsonote24forinformationontheAssociate.AccèsBanqueMadagascarS.A.(ABM)reportedanetprofitofEUR69,910.42for2011.Withashareofnow44.00%,theportionoftheprofitattributabletoAccessHoldingamountstoEUR30,760.59.
In2011theaveragenumberofstaffinthetwoassociatedcompanieswas1,794(2010:1,703includingABT).
Accessbank Tanzania:DuetothefullconsolidationofABTalossofEUR506,656wasrecognizedduetothederecognitionofthepreviousheldshares(seenote7).
(18) Other administrative expensesThebreakdownofoperatingexpensesisasfollows:
Other administrative expenses 2011 2010OfficeRent (626,777) (502,706)Legal,auditandadvisoryexpenses(619,566)(592,605)Insurance (173,632)(66,098)CommunicationandITexpenses (444,598)(521,857)Advertisement (596,058)(374,077)TravelCosts (632,021) -Otheradministrativeexpenses (3,641,179)(2,554,111)Total (6,733,832) (4,611,455)
Notes to the Consolidated Financial Statements 2011
Thefollowingtableshowsabreakdownofoperatingexpensebyentity.Other administrative expenses 2011 2010AH (1,403,648) (984,098)ABL (1,596,353) (1,008,425)ABN (1,982,399) (2,004,175)ABTJ (1,039,771) (614,755)ABZ (390,657) -ABT (321,003) -Total (6,733,832) (4,611,454)
AtthelevelofAccessHolding,operatingexpensescanbebrokendownasfollows:Operating Expenses, AccessHolding 2011 2010ManagementServiceContract(BasicFee)(860,395) (460,133)PerformanceFee (172,079)(92,026)Legalandadvisoryexpenses (139,771)(105,530)AuditFee (107,105)(69,470)Insurance (25,333)(25,333)TravelCosts (83,514)(100,677)Otheradministrativeexpenses (15,452)(130,929)Total (1,403,648) (984,098)
AManagementServiceContract(MSC)wasexecutedbetweenAccessHoldingandLFSwherebythelattershallsecondtwoManagementBoardMembersandotherexecutiveandadministrativestaffasrequiredtofulfilitsmanagementmandate.LFSwillalsoenableAccessHoldingtodrawuponotherresourcesofLFSasrequiredtoperformitsholdingservicesandfunctions.
ThemanagementservicefeeconsistsofabasicfeeandaperformancefeerelatedtothecapitalofAccessHolding.
In2011,severalperformanceindicatorsweremet,resultinginaperformancefeeofEUR172,079gross.TheperformancefeehasbeenrecognisedasasharedbasedpaymentaccordingtoIFRS2.SettlementofthispaymentiscashaccordingtoIFRS2.41pp.
(19) Current income tax expenseThefollowingtableshowsthereconciliationbetweenexpectedandeffectiveincometaxexpense:Tax Reconciliation 2011 2010Resultfromordinarybusinessactivities 356,555 2,119,830Domestictaxrate 30.18% 30.18%Expectedtaxexpense 107,608 639,765Tax rate differences Tax effects of expenses that are not deductible fortaxpurposesaccordingto§8bcorporateincometaxlaw 42,320 61,692Taxeffectsfromdifferencesoutofrevenuetaxbase Gainsnotsubjecttotax -107,608 -639,765Valuation of deferred tax assets Increaseofvaluationofunusedtaxlosses -89,141 -123,062Effectsnotidentifiedwithaspecialperiod Deferredprovisionfortaxonoverseasdividends -525,428 397,958Notdeductible/creditablewithholdingtaxortaxacc. -399,822 449,003§8bcorporateincometaxorcapitalgaintaxTax income (expense) -972,071 785,591Averageeffectivetaxrate -272.6% 37.1%
DeferredandcurrenttaxincomeandexpensesamounttototalgainofEUR972,071.
84
AccessHolding|AnnualReport2011
85
Thedomesticincometaxrate,includingcorporatetax,solidaritysurcharge,andtradetax,usedforcalculatingdeferredtaxassetsandliabilitieswas30.18%fortheyearsendedDecember31,2011,2010,2009and2008.
(20) Deferred tax incomeDeferredtaxincomeamountstoEUR1,016,160.
Deferred tax income 2011 Originationandreversalsoftaxlosses 89,141Originationandreversalsofoutsidebasisdifferences 927,019Total 1,016,160
OriginationandreversalsofoutsidebasisdifferencesarerelatedtowithholdingtaxinAzerbaijanandchangesoftheinterpretationoftaxlaws.
(21)Loss attributable to non-controlling interestsThelossofsubsidiariesattributabletonon-controllinginterestsincludesthefollowingitems:Profit (loss) attributable 2011to non-controlling ABL ABN ABTJ ABZ ABT Total interestsTotalprofit(loss) (437,246) 894,651 (644,402) (365,928) (55,304) (608,229)Minorityinterest 44.30% 49.94% 48.00% 49.00% 49.30% -Profit(loss)attributableto (193,700) 446,789 (309,313) (179,305) (27,265) (262,794)non-controllinginterestsProfit (loss) attributable (243,546) 447,862 (335,089) (186,624) (28,039) (345,435)to AccessHolding
(22) Other comprehensive incomeTheothercomprehensiveincomemainlyconsistsofcurrencytranslationdifferences.DeferredincometaxesrelatedtocurrencyrevaluationamounttoEUR5,576.
Notes to the Statement of financial position(23) Cash and Cash EquivalentsCashandCashEquivalentswerecomprisedasfollows:Cash and cash equivalents 2011 2010AH 600,762 1,629,256ABL 5,905,811 4,107,099ABN 803,647 569,017ABTJ 954,684 207.525ABZ 684,302 -ABT 6,828,861 -Total 15,778,067 6,512,898
CashandcashequivalentsheldbysubsidiariesarenotavailableforusebytheGroup.
(24) Investments in AssociatesAccessHoldingcurrentlyholdsinvestmentsintwoAssociates:AccessBankAzerbaijan(ABA)andAccèsBanqueMadagascarS.A.(ABM).
Associate 31/12/2010 Derecognition Dividends Share in Profit Currency revaluation 31/12/2011ABA 11,739,777.02 0.00 -933,948.60 2,804,480.64 369,534.85 13,979,843.92ABM 1,582,577.98 0.00 0.00 30,760.59 21,233.13 1,634,571.70ABT 2,040,158.18 -2,040,158.18 0.00 0.00 0.00 0.00Total 15,362,513.18 -2,040,158.18 -933,948.60 2,835,241.23 390,767.99 15,614,415.62
RegardingthederecognitionofABTpleaserefertonote(7).
Notes to the Consolidated Financial Statements 2011
TheGroup’sshareoftheresultsofitsprincipalassociates,allofwhichareunlisted,anditsaggregatedassetsandliabilitiesareasfollows: Assets Liabilities Revenues Profit/Loss TEUR TEUR TEUR TEURABA 376,857 293,026 60,845 16,966ABM 25,407 22,308 10,948 70Total 402,264 315,334 71,793 17,036
AccessBank AzerbaijanClassification as AssociateAccessHoldingholdsastakeof16.53%inABA.Togetherwithitsownshareholders(IFC,KfWandLFS),AccessHoldingowns60%ofthesharesofABA.ThroughexercisingofitsvotingrightsintheShareholders’Assembly,itsrepresentativeontheboardofdirectors,andthroughthecommonmanagementcompany,AccessHoldingexertsasignificantinfluenceonABA.ABAismanagedbyLFS(whichalsoholdsadirectequitystake)underamanagementservicecontract.
Development of the Associate in 2011During2011,ABA’sassetsgrewby5%inlocalcurrency(9%inEUR)toEUR377million.Thebank’smainbusinessisprovidingloanstomicroandsmallbusinesses.Theloanportfolioamountedto119,501loansforEUR294million(2010:122,519loansforEUR259million).EquityamountedtoEUR83.8million(2010:EUR70.4million).In2011,netprofitinEURdecreasedby31%toEUR16,966million;returnonaverageequityamountedto24%(2010:59%).Asof31December2011,ABAoperated30(2010:28)branchesandemployed1,344(2010:1,207)staff.ThebankhasreceivedaBB+rating(Fitch).
ValuationThevalueofthesharesisassessedusingthe“atequity”method.ThestartingvaluewasEUR11,739,777.ThiswasaugmentedbyashareinprofitofEUR2,804,409,dividendsofEUR933,949andacurrencytranslationgainofEUR369,534(recordeddirectlyinequity).Accordingly,thevaluationasof31December2010isEUR13,979,844.
AccèsBanque Madagascar S.A.Classification as AssociateABMwasfoundedin2006withAccessHoldingasthelargestfoundingshareholder.ABMismanagedbyAccessHolding’smanagementcompany,LFSFinancialSystemsGmbH,underamanagementservicecontract.AccessHoldingcurrentlyholdsastakeof44.0%inABMandisthebank’slargestshareholder.ThroughexercisingofitsvotingrightsintheShareholders’Assembly,itsrepresentativeontheboardofdirectors,andthroughthecommonmanagementcompany,AccessHoldingexertsasignificantinflu-enceonABM.
DevelopmentoftheAssociatein20112011wasthefifthbusinessyearforABM.Duringtheyear,assetsgrewby46.8%toEUR25.4million.Theloanportfoliocomprised20,883loansforEUR14.3million(2010:14,436loans,EUR11.1million).CustomerdepositsincreasedfromEUR13.5milliontoEUR17.8million.TheprofitforthebusinessyearamountedtoEUR69,910.42.Asof31December2011,ABMemployed561staffin12branches(2010:435/11).
ValuationThevalueofthesharesisassessedusingthe“atequity”method.ThestartingvaluewasEUR1,582,578.AnexchangegainofEUR21,233equityisrecordeddirectlyinequity.TheshareofprofitforthebusinessyearamountedtoEUR30,760.Accordingly,thefinalevaluationisEUR1,634,571.
86
AccessHolding|AnnualReport2011
87
(25) Loans and advances to customersAsof31December2011netloanportfolioamountedtoEUR45,665,451. Loans and advances to customers 2011 2010Microfinanceloanstocustomers(gross) 36,098,323 12,744,693SMEloans 9,025,671 801,873Otherloanstocustomers(gross) 163,339 -Impairmentreserve (800,780)(429,628)Interestandfeesreceivable 1,178,898 45,755ExchangeGain - -Total 45,665,451 13,162,693
ThecarryingamountofloansandadvancestocustomersthatareneitherpastduenorimpairedisTEUR49,771.Thecarryingamountofloansandadvancesthatarepastdue(duemorethan30days)butnoimpairedisTEUR580.
(26) Intangible assetsIntangiblesassetsintheamountofEUR2,466,706includecomputersoftware(EUR2,427,119)andgoodwillofEUR39,586.09realisedin2011(seenote6).Additionallythefollowingtablesshowthecompositionanddevelopmentofcomputersoftwarein2011and2010:
Computer Software 2011 2010 ∆Net book value, 1 January 2011 638,330 512,872125,458Additions 1,997,247 147,7721,849,475Transfers -- -Disposals -- -Totalacquisitioncost 2,635,577 660,644 1,974,933Depreciation (227,662) (70,925)(156,737)Exchangedifference 19,204 48,612(29,408)Accumulateddepreciation (227,662) (70,925)(156,737)Net book value, 31 December2011 2,427,119 638,331 1,788,788
(27) Property, plant and equipmentThefollowingtablesshowthecompositionanddevelopmentofproperty,plantandequipment:Property, plant and equipment 2011 2010AH 600,762 1,629,256ABL 5,905,811 4,107,099ABN 803,647 569,017ABTJ 954,684 207.525ABZ 684,302 -ABT 6,828,861 -Total 15,778,067 6,512,898
Notes to the Consolidated Financial Statements 2011
Furniture, Assets OtherAccumulated Land and fixtures, under Motor Computer office Tenantdepreciation buildings equipment construction vehicles equipment equipment fixtures Total
Net book value, 1,544,185 1,396,846 - 128,555 377,146 - 169,825 3,616,558
1 January 2011
Additions 249,647 543,089 109,037 217,685 670,564 496,335 709,705 2,996,062
Disposals (1,283) (969) (1,090) (3,341)
Transfers 307,601 (364,406) 226,630 (169,825) -
Totalacquisitioncost 2,100,150 1,938,967 109,037 346,240 1,047,710 495,245 709,705 6,609,278
Depreciation (173,962) (209,045) - (96,349) (263,415) (102,063) (29,962) (874,796)
Impairment 5,298 730 - - - 552 - 6,580
Exchangedifference (54,594) (18,865) - 151 (1,175) - (165) (74,648)
Accumulated depreciation (168,664) (208,316) - (96,349) (263,415) (101,511) 29,962) (868,216)
Net book value, 1,876,892 1,711,786 109,037 250,043 783,121 393,734 679,743 5,666,41431 December 2011
Furniture, Property, plant Land and fixtures, Motor Computer Tenantand equipment buildings equipment vehicles equipment fixtures Total
Net book value,
1 January 2010 381,041 665,423 81,612 287,944 - 1,416,020
Additions 1,249,609 926,882 84,642 166,790 180,449 2,608,372
Disposals - - - - - -
Totalacquisitioncost 1,630,650 1,592,305 166,254 454,734 180,449 3,843,942
Depreciation (106,076.91) (238,938.88) (42,269) (93,457) (10,625) (491,367)
Exchangedifference 19,613 43,480 4,571 15,869 - 83,533
Accumulateddepreciation (106,077) (238,939) (42,269) (93,457) (10,625) (491,367)
Net book value, 1,544,185 1,396,846 128,555 377,146 169,825 3,616,558 31 December 2010
(28) Deferred tax assetsDeferred income tax asset 2011 2010AH 969,902 146,502ABN 205,259 360,445ABZ 237,515 -ABT 358,982 -Total 1,771,657 506,947
Deferredtaxassetsrefertotaxlossescarriedforward.ThelossesattheparentcompanyamountstoEUR3.1MioandareconsolidatedatGrouplevel.ThetotaldeferredtaxassetwouldbeTEUR932.Managementdecidedtorealisethedeferredtaxassetsduetouncertainfuturetaxableincomeonlyintheamountofthenationaldeferredtaxliabilities,amountingtoEUR194,398.Thecalculationofthedeferredtaxliabilitiesisbasedontheaveragetaxrateof30.18%andtheresultofoperationoftheGroup(seealsonote34).
AdditionallyAccessHoldingcancarryforwardwithholdingtaxpaidtoAzeritaxauthoritiesamountingtoEUR0.8million.
TaxassetsamountingtoEUR1.0millionareexpectedtoberecoveredwithin12months.
(29) Other financial assetsOnthelevelofAH,otherfinancialassetsincludealoantoLFS(EUR2.0million)tofinancethedevelop-mentofanewbankingsoftwareforthenetworkbanks(2010:2.5million).
88
AccessHolding|AnnualReport2011
89
(30) Other non-financial assets.Othernon-financialassetsaremainlyprepaymentsanddistributedasfollows:
Other non-financial assets 2011 2010AH 29,2713,921,580ABL 677,642780,526ABN 1,357,1271,460,147ABTJ 302,538282,927ABZ 153,838 -ABT 1,896,248 -Total 4,416,663 6,445,180
(31) Loans from banks and other financial institutions
Loans from banks andother financial institutions 2011 2010ABN 8,119,9164,625,374ABTJ 8,119,52293,566ABT 2,726,542 -Total 18,965,980 4,718,940TheLoansfrombanksandotherfinancialinstitutionsconsistslargelyofborrowingstoABNandABTJwithamaturityofmorethanoneyear.
(32) Customer accountsTotalcustomeraccountsintheamountofEUR23,264,997aredistributedasfollows:
Customer accounts 2011 2010Currentaccounts 3,227,035790,820Savingsaccounts 9,837,5181,774,977Termdeposits 10,200,445961,040Total 23,264,997 3,526,836
(33) Trade and other payablesTradeandotherpayablesaredistributedasfollows:
Trade and other payables 2011 2010AH 691,656469,868ABN 3,150,851398,506ABZ 73,626 -ABT 679,428 -Total 4,595,561 868,374 Allliabilitiesareduewithin12monthsandequaltheircarryingbalancesastheimpactofdiscountingisnotsignificant.PayablesamountingtoEUR2.2millionarerelatedtoABN’sfinancing.
(34) Deferred income tax liabilityDeferredtaxliabilitiesareallrelatedtooutsidebasisdifferencesofinvestmentsinassociatesandwerecalculatedaccordingtothefollowingtable:
Deferred incometax liabilities Difference TaxValue IFRS Difference Taxable 31/12/2011 Difference
ABA 146,502 2,787,197 13,979,844 11,192,647 5.0% 194,398 47,896
ABM - 1,750,505 1,634,572 (115,933) 5.0% - -
Total 146,502 194,39 47,896
ThenegativedifferenceofABMisnotrecognizedbecauseitcan’tbedeductedfromGermantaxincomeaccordingtoGermantaxlaws.
ThedecreaseofdeferredtaxintheamountofEUR570,927toEUR146,502isduetoadifferentinter-pretationofthetaxlawsinAzerbaijanregardingthecapitalizationofprofitsandwithholdingtaxes.Alldomestictaxliabilitiesarenotexpectedtoberecoveredwithin12months.
Notes to the Consolidated Financial Statements 2011
(35) Other non-financial liabilitiesTotalothernon-financialliabilitiesintheamountofEUR2,275,397aredistributedasfollows:
Share capital No. of Shares = Paid in Capital % of totalShareholder 2011 2010 2011 2010CDCGroupPLC(CDC) 824,500 778,500 14.12% 14.12%EuropeanInvestmentBank(EIB) 824,500 778,500 14.12% 14.12%InternationalFinanceCorporation(IFC) 824,500 778,500 14.12% 14.12%KfWDevelopmentBank(KfW) 824,500 778,500 14.12% 14.12%LFSFinancialSystemsGmbH(LFS) 941,000 888,500 16.12% 16.12%MicroAssetsGbR(MA) 190,106 179,500 3.26% 3.26%Omidyar-TuftsMicrofinanceFund(OTMF) 824,500 778,500 14.12% 14.12%NederlandseFinancierings-Maatschappij 585,411 552,750 10.03% 10.03%VoorOntwikkelingslandenN.V.(FMO) Total 5,839,017 5,513,250 100% 100%
Thesharesarenotgroupedintoclasses,andtherearenodifferentrights,preferencesandrestrictions,includingrestrictionsonthedistributionofdividendsandtherepaymentofcapital.Theshareshavenoparvalue.
(37) Capital reservesInadditiontothestatedsharecapital,eachshareholderhascommittedtopayinadditionalamountsintothecapitalreserves(“CapitalCommitments”).ThepaymentofthecapitalcommitmentsiscalledinbytheManagementBoardfromtimetotimewhenbusinesssorequires.
TheshareholdersofAccessHoldinghavecommittedtopayinadditionalamountsintothecapitalreser-vesandassharecapitalstartingfrom2011.ThenewcommitmentsamounttoatotalofEUR12.2Mio.In2011theshareholdersofAccessHoldingcontributedintotalEUR1,120,638tothecapitalreserve.
(38) Currency translation differencesTotaltranslationreservesamounttoEUR1,033,152.
Currency translation differences 01/01/2011 Addition 31/12/2011AH 329,534 626,101 955,635ABL (3,541) (45,512) (49,053)ABN 94,969 49,292 144,260ABTJ 1,039 799 1,838ABZ - (6,137) (6,137)ABT - (13,392) (13,392)Total 422,000 611,151 1,033,152
ThefollowingtableshowsthecompositionandmovementofthisreserveforAH.Forallotherbanks,thedifferenceresultsfromthefactthatbalancesheetitemsaretranslatedattheexchangerateasof31December2011,whileP&Litemsaretranslatedattheaveragerateduringtheoperatingperiodoftherelevantbank.
Currency translation differences AH 31/12/2010 Addition 31/12/2011ABA 724,423 363,959 1,088,381ABM (87,597) 21,233 (66,364)ABT (318,290) - (318,290)ABL 185,936 156,070 342,007ABTJ 63,979 (226,161) (162,181)ABN (238,918) (60,532) (299,450)ABZ 30,382 30,382ABT 341,150 341,150Total 329,534 626,101 955,635
90
AccessHolding|AnnualReport2011
91
(39) Retained earningsThefollowingtableshowsthecompositionandmovementofretainedearnings:
Retained earnings 2010 Addition 2011AH 4,873,970 1,936,856 6,810,826ABL (146,135) (249,555) (395,690)ABN (927,835) 580,365 (347,470)ABTJ (279,065) (335,089) (614,154)ABZ - (3,707,559) (186,624)ABT - (16,879) (16,879)Total 3,520,935 (1,791,862) 5,250,009
(40) Other reservesOtherreservesconsistofEUR-19,570relatedtoachangeintheownershipofAccessHoldinginABMandABTin2010.
(41) Equity attributable to non-controlling interestsInsubsidiariesthatarenotfullyownedbyAccessHolding,theequityattributablenon-controllinginte-restsisnottakenintoaccountintheconsolidatedfinancialstatements.Thefollowingtableshowsthecompositionoftheseitems:
Equity attributable to Non-controlling Attributable tonon-controlling interests interest Total equity non-controlling interestsABL 44.3% 7,795,787 3,453,534ABN 48.0% 6,858,210 3,424,990ABTJ 49.9% 6,613,160 3,174,317ABZ 49.0% 4,227,313 2,071,383ABT 49.3% 4,936,472 2,433,681Total 21,267,157 14,557,904
Notes to the Consolidated Financial Statements 2011
Additional Notes(42)Liquidity risk
Maturities of assets 12 monthsand liabilities 0 - 30 days 1 - 6 months 6 - 12 months to 5 years Over 5 year Total
Assets
Cashandbalanceswithbanks 15,778,067 - - - - 15,778,067
Loansandadvancestobanks -
Investmentsavailableforsale - 1,732,275 - - - 1,732,275
Loansandadvancestocustomers 2,212,221 8,729,922 21,428,332 4,543,552 - 36,914,025
Intangibleassets - - - - 2,466,706 2,466,706
Property,plantandequipment - - - - 5,666,414 5,666,414
Currentincometaxasset - - - - - -
Deferredincometaxasset - - - - 1,771,657 1,771,657
Otherassets - 500,000 500,000 1,000,000 - 2,000,000
Othernon-financialassets - 25,807 278,177 3,772,867 688,934 4,765,784
Total assets 17,990,288 10,962,196 21,928,332 5,543,552 9,904,777 66,329,144
Liabilities
Loansfrombanksandother
financialinstitutions 7,304 704,528 423,252 16,548,416 - 17,683,499
Customeraccounts 10,519,725 7,721,546 1,847,870 3,155,150 - 23,244,291
Tradeandotherpayables 691,656 - 596,253 - - 1,287,909
Deferredincometaxliability - - - - - -
Otherliabilities - - - - - -
Total liabilities 11,218,684 8,426,074 2,867,375 19,703,566 - 42,215,699
Net liquidity gap 6,771,604 2,536,122 19,060,957 (14,160,014) 9,904,777 24,113,445
Cumulated liquidity gap 6,771,604 9,307,726 28,368,683 14,208,669 24,113,446
ThetableaboveanalysesassetsandliabilitiesoftheGroupintorelevantmaturitygroupingsbasedontheremainingperiodatbalancesheetdatetothecontractualmaturitydate.ThematchingandcontrolledmismatchingofthematuritiesandinterestratesofassetsandliabilitiesisfundamentaltothemanagementoftheGroup.Itisunusualforbanksevertobecompletelymatchedsincebusinesstransactedisoftenofuncertainterm.Thematurityofassetsandliabilitiesandtheabilitytoreplace,atanacceptablecost,interest-bearingliabilitiesastheymature,areimportantfactorsinassessingtheliquidityofthebankanditsexposuretochangesininterestratesandexchangerates.
Liquidityriskismeasuredandcontrolledonthelevelofnetworkbanks.
Interestrateriskismeasuredandcontrolledonthelevelofnetworkbanks.
(43) Net result according to financial categories
SubsequentCategories Interest Fair measurement Total 2010 value ImpairmentLoansandreceivables(LaR) 12,551,533 (530,326) 12,021,208 4,466,605AvailableforSaleFinancialAssets(AfS) 319,505 319,505 482,090Holdtomaturity(htM) 935 935 14,793FinancialLiabilititesMeasuredatAmortisedCost(FLAC) (1,987,728) (1,987,728) (83,191) 10,884,246 -(530,326) 10,353,920 4,880,297
92
AccessHolding|AnnualReport2011
93
(44) Financial iruments: classes
Category Carrying amount Fair Value Carrying amount Fair Value (IAS 39) 31.12.11 31.12.11 31.12.10 31.12.10
ASSETS
Cashandcashequivalents AfS 15,778,067 15,778,067 6,512,898 6,512,898
Loansandadvancestobanks LaR 2,891,644 2,891,644 3,533,758 3,533,758
Investmentsavailableforsale AfS 1,732,275 1,732,275 59,048 59,048
Loansandadvancestocustomers LaR 45,665,451 45,665,451 13,162,693 13,162,693
Otherfinancialassets LaR 2,065,021 2,065,021 2,500,000 2,500,000
LIABILITIES
Loansfrombanksandotherfinancialinstitutions FLAC 18,965,980 18,965,980 4,718,940 4,718,940
Customeraccounts FLAC 23,264,997 23,264,997 3,526,836 3,526,836
Tradeandotherpayables FLAC 4,595,561 4,595,561 1,441,278 1,441,278
Fairvaluesforinvestmentsavailableforsalearedeterminedusingavaluationtechnique(MarktoModel).Valuationtechniqueusedisbasedonobservablecurrentmarkettransactions.Changingoneormoreofthoseassumptionstoreasonablypossiblealternativeassumptionswouldnotchangefairvaluesignificantly.
(45) Rights and obligationsAccessHoldingandtheBelgianInvestmentCompanyforDevelopingCountriesSA(“B.I.O.“)havecon-cludedaconditional‘Put/CallOptionAgreement’forthesharesheldbyB.I.O.inAccessBankTanzaniaLtd.Asof31December2011,thepreconditionsforAccessHoldingtoexerciseitscalloptionwerenotyetfulfilledbutthepreconditionforB.I.Otoexerciseitsputoption(atbookvalue)weremet.Sincethepotentialgainsandlossesofthisagreementarecurrentlybalanced,liabilitiesresultingoutofthe‘Put/CallOptionAgreement’arenotrecognised.ThevalueofthesharesofB.I.O.equalsEUR0.7millionon31December2011.
AccessHoldingandtheDutchcompanyStichtingTriodosDoen(“Triodos”)haveconcludedanoptional‘Put/CallOptionAgreement”forthesharesheldbyTriodosinAccèsBanqueMadagascarS.A.in2009.Sincethepotentialgainsandlossesofthisagreementarecurrentlybalanced,potentialliabilitiesresultingoutofthe‘Put/CallOptionAgreement’arenotmeasurableandarenotrecognised.
AccessHolding,EBRD,IFCandKfWhaveconcludedanoptional‘PutOptionAgreement’forthesharesheldbyEBRD,IFCandKfWinAccessBankTajikistan.ThisoptionenableseachofshareholderstoselltheirsharestoAccessHoldingforagivenmultiple.Sincethepotentialgainsandlossesofthisagree-mentarecurrentlybalanced,potentialliabilitiesresultingoutofthe‘PutOptionAgreement’arenotmeasurableandarenotrecognised.
(46) Contingent Liabilities and CommitmentsIn2011anewManagementServiceContractwasconcludedbetweenAccessHoldingandLFS.Thiscontractexpireson31December2013.
Thefollowingtableshowsthecompositionoftotalfutureminimumleasepaymentsundernon-cancellableoperatingleaseswhicharerelatedtoABT.
Operating lease agreements EUR US$Nolaterthanoneyear 362,453 469,341Laterthanoneyearandnolaterthanfiveyears1,391,626 1,802,016Laterthanfiveyears 1,089,712 1,411,068Total 2,843,791 3,682,425AcontingentliabilityequallingEUR0.7millionarisesfromtheputoptionwithB.I.O.(seenote45.)
Notes to the Consolidated Financial Statements 2011
(47) Capital ManagementTheGroup’sobjectiveswhenmanagingcapital,whichisabroaderconceptthanthe‘equity’onthefaceoftheconsolidatedstatementoffinancialposition,are:
Tocomplywiththecapitalrequirementssetbytheregulatorsofthebankingmarketswherethe entitieswithintheGroupoperate;
Tomaintainastrongcapitalbasetosupportthedevelopmentofitsbusiness
Capitaladequacywillbemonitoredonaminimummonthlybasisattheleveloftheindividualbanks.Asarecommendationeachbankaimsatacapitaladequacyratioof15-20%relatingtotheratioofrisk-weightedassetstoTier1capital.Tier1capitalusuallycompromisessharecapital,generalbankreserve,statutoryreserve,retainedearningsandreservescreatedbyappropriationsofretainedearnings.ThebookvalueofintangibleassetsisdeductedinarrivingatTier1capital.Thecapitaladequacyrequi-rementsforeachbankweremetin2011(and2010)andsucceededourrecommendations.
AHdoesnotuseexternalfinancingonholdinglevel.Developmentofsubsidiesandassociatesaremonitoredonaminimummonthlybasisaccordingtotheirbusinessplans.
Seealsonote35forinformationoncapitalcommitmentsoftheshareholders.
(48) Risk ManagementInriskmanagement,itisnecessarytodifferentiatebetweentheoperationsoftheholdingandthoseofthenetworkbanks.Whilethemainrisksfortheholdingarecountryandcurrencyrisks,itiscurrentlynotexposedtoanycreditorinterestrateriskandtoonlyfewoperationalrisks.Thenetworkbanksontheotherhandareexposedtothefullrangeofriskscommontothebankingindustry,aggravatedbyfactthattheyworkinmarketswithsometimesseveredeficienciesintheareasofpoliticalandecono-micstabilityandruleoflaw.
Level of AccessHolding Higher than expected capital requirements
Nature of risk: FasterthanexpectedassetgrowthofMFIs,insufficientaccesstoexternalfinancing and/orregulatorychange,canforceAccessHoldingtoaccelerateorincreasetheprovisionof capitaltoitsnetworkbanks.UndertheHolding’scurrentcapitaldevelopmentprojectionsand investmentplanthiscanleadtotemporaryliquiditysqueezes.Thesameeffectscanalsooccurasa resultoffluctuationsofdividendincomefromAccessHolding’sparticipations.
Mitigating factors: AccessHoldingimplementscarefulliquidityplanningandinitscapitalallocation alwayskeepsacushionforunexpectedfollow-upinvestments.Itsshareholdersaresufficiently solventtoprovidemorecapitalifneeded.
Delayed implementation of investment pipeline Nature of risk:Newinvestmentsinnetworkbanksneedtobecarefullyselectedandcoordinated withlike-mindedco-investors,whosedecisionmechanismsmayrequiremoretimethanenvisioned. Licensingprocessescanbelongandcumbersome.Therefore,delaysintheimplementationofthe investmentpipelinecouldaffectthebuild-upoftheinvestmentportfolioand,ultimately, AccessHolding’soverallprofitability.
Mitigating factors:AccessHoldinghasdevelopedandismaintainingastronginvestmentpipeline, screeningandanalysingpossibletargetcountrieswellinadvance.
External shocks in MFI host countries Natureofrisk:Thecountriesofoperationaresubjectedtoanumberofrisks,suchasmacroeconomic shocks,naturaldisasters,orpoliticalupheaval.Suchrisks,wheretheymaterialise,canhavesub- stantialimpactontheMFIsandtheirclientele,intheformofe.g.adepressedbusinessenvironment,
94
AccessHolding|AnnualReport2011
95
suddendelinquencywaves,tightenedmoneysupply,orextraordinaryforeignexchangelosses.These candestabilisetheinvesteeMFIandcauselossesfortheinvestors.
Mitigating factors: MFIsarecomparativelyshock-resilient,foravarietyoffactors:Firstly,small businessactivityindevelopingcountriesisoftenpreciselyaresultofpooreconomicconditions andinsufficientemploymentopportunities,sothatdemandformicroenterpriseloanscaneven increaseintheeventofacrisis.Moreover,mostMFIclientsaretradersofbasicgoodssoldinsmall batches,thedemandforwhichisaffectedbyeconomicshockstoalesserextentthanoveralldemand intheeconomy.Also,mostMFIloansareshort-term,sothattheycanquicklyrespondtointerest ratechangesinducedbysuddenalterationsinmoneysupply.Forinvestors,theseadvantages translateintoarelativelylowsystematicrisk(beta)ofMFIinvestmentsandlowcorrelationtothe performanceofmostotherinvestments.
AnadditionalmitigatingfactorinthespecificcaseofAccessHoldingisthatthepoliticalleverageof theIFIsamongitsfoundingshareholdersandasinvestorsinnetworkbanksshouldhelptoreduce thecountryriskofitsinvestments.
Foreign exchange risk Nature of risk: AccessHoldingmostlyundertakesequityinvestments,whicharedenominatedin localcurrencyandarethussubjecttoexchangeratefluctuations.Whilethenetworkbanksneed tomanagecurrencyrisksinrelationtotheirrespectivestatutorycurrency,theholdingisultimately interestedintheEurovalueofitsinvestments.Moreover,theinternationalreferencecurrencyinsome countriesofoperationistheUSDollar,whichintroducesadditionalvolatilitytotheinvestments’value.
Mitigating factors: Duetothelong-termstrategyandnatureofinvestmentsasequity,hedgingis usuallynotpossible.Thecurrencyrisksthereforehastobemanagedby(i)aimingtomaintain sufficientprofitabilityinnetworkbankstocompensateforcurrencydevaluationand(ii)diversification ofinvestmentsacrosscountriesandregions.
Level of network banksNetworkbanksareexposedtoallrisksinherentinthebankingindustry.Thisincludescreditrisk,maturity(liquidity)risk,interestraterisk,andcurrencyriskaswellasoperationalrisksandcountryriskandmarketrisks.Theoverridingriskmanagementstrategyisthecommonmanagementapproach,imple-mentedthroughthetechnicalpartnerLFS,andtheprovisionofactiveinvolvementandcontrolbytheheadquarters.Theprovenandwelltestedapproachensuresthroughpermanentandinstitutionalisedexchangeofstaffandinformationaswellascontrolandauditinsurethatbestpractiseisfollowed,synergiesarerealisedandtheduplicationoferrorsisavoided.Thisapproachisaconclusionfromtheobservationthatmanagementcapacity(asopposedtocompetition,marketlimitationorfunding)isoftenthemostsignificantbottleneckforthedevelopmentandsuccessofmicrofinanceinstitutions.ThelinkagebetweentheprovisionofcapitalandmanagementservicesisattheheartofAccessHolding’sbusinessconcept.
Importantprinciplesofthisapproachinclude:
Standardisation and concentration on core products:AccessBanksdonotaimtooffereverypossible bankingproductbutconcentrateonprovidingexcellentserviceintheircoreareasofcompetence, i.e.microandsmallbusinessfinance.Thisensuresthatsparsemanagementcapacityisconcentrated andspeculativeorerraticstrategiesareavoided.Moreover,experienceshowsthatawell-managed portfolioofmicroandsmallbusinessloansismuchmoreresilienttoeconomicshocksthancorpo rate,consumeroraggressivehousingfinance.
Lending technology: TheLFStechnologyformicroandsmallbusinesslending–comprisingall aspectsoflendingfromcreditanalysistocreditcycleprocedurestoorganisationalandcompen- sationmatters,hasbeensuccessfullyprovenandtestedinavarietyofcountriesandsituations. Highportfolioqualityandbalancedbutdynamicgrowthcanbeachievedinmostenvironments.
Notes to the Consolidated Financial Statements 2011
Focus on training: Traininglocalandinternationalstaffonalllevelsfromclericaltotopmanagement isacorefocusoftheactivityofeachnetworkbankandtheGroupasawhole.Inmostcases, careersaremadein-houseandhighstaffretentionratesandloyaltyareachieved.Thisisespecially importantinabusinesswithsuchspecificrequirementsasmicrofinance.
Simplicity and transparency:Greatattentionisgiventoensuringtransparencyandsimplicityof thenetworkbanks’products,proceduresandappearance.Creatinganddemonstratingacorruption- freeenvironmentisachallengeinmanycountriesofoperations,butalsoacorecompetitiveadvantage andthebasisforsustainedsuccess.
Prudence and financial risk management:Higheststandardsareappliedintheclassicalareasof bankriskmanagement–standardsofloanlossprovisioning,observationofprudenceregulations, interestrate,maturityandcurrencyriskexposure.Inmostcases,internallyappliedregulationsare muchstricterthancentralbanklimits.Thisismadepossibleontheonehandbythenatureofour banks’businesswhichusuallyexcludesconcentrationofexposures,highmaturityrisksandthe like.Ontheotherhand,thelong-termstrategyofAccessHoldinganditsco-investorsensuresthat managementisnotpushedtogotothelimitofleverageorotherindicators,andisorientedat growthandsustainabilityratherthanshort-termprofitmaximisation.
Operational risk management:Operationalrisksofvarioustypesfromfraudtodifficultiesinelec- tricitysuppliesareacorethreattothenetworkbanks’profitability.Thedevelopmentandmanagement ofriskmatrixesisthereforebecomingstandardacrossAccessBanks,andcentralisedservicessuch asinITandproductspecialistsaregainingimportanceinreducingoperationalrisksandensuring thesharingofbestpractiseamongnetworkbanks.
Control and audit:Thebuild-upofefficientandcapablecontrolandauditfunctionsisacoreelement ofriskmanagement.ThisincludesahighlycapableMISatbankandGrouplevelsaswellasthe centraltrainingofandcontroloverinternalauditdepartmentsofthenetworkbanks.Measures takeninthisareacomprisecarryingoutinternalauditsbytheHQauditteamaswellasproviding auditpolicies,proceduresandplanstonetworkbanks,traininginternalauditorsatbanklevel,and exchangeofauditteamsacrossthenetwork.
(49) Credit RiskThefollowingtableshowsthecurrentqualityoftheloanportfolioonthelevelofeachconsolidatedcompany.Theportfolioatriskratioisdefinedastheamountofoutstandingloansdividedbytheamountofoverdueoutstandingloans.
Portfolio at Risk PAR 30ABL 5.15%ABN 0.95%ABTJ 1.32%ABZ -ABT 1.20%
(50) Events after the reporting period
PreparationsforacapitalincreaseofAccessHolding(inviewoftheupcomingacquisitionofamajoritystakeinABA,haveprogressedtothepointthatallshareholdershadsecuredtheirfinalorpre-finalap-provalsfortheirrespectivecapitalcontributionsatthetimeofwriting.Thecapitalincreaseisforeseentotakeplaceinthesecondquarterof2012andwillresultinamajoritystakeinABAofmorethan50%.TheBankofZambia(BoZ)announcedthattheminimumcapitalrequirementforforeigncommercialbankswillbeliftedtotheequivalentofaboutEUR75millionandforlocallyownedbankstotheequi
96
AccessHolding|AnnualReport2011
97
valentofaboutEUR15millionbytheendof2012.AstheseamountsarefarabovetheforeseenandjustifiedcapitalisationlevelforABZ,inparticulartherequiredcapitalforforeignbanks,ABZsharehol-ders(ledbyAccessHolding)havestarteddiscussionswithBoZrespectofthismatter.
InApril2012AccessHoldingtookpartincapitalincreaserelatingtoABMwhichwillresultinmajoritystakeinABAofmorethan50%.
(51) Related-party transactions
ThefollowingtableshowsallinvestmentswhicharerelatedpartiestoAccessHolding:Name of Institution Domicile Share in % AccèsBanqueMadagascar Antananarivo,Madagascar 44.00%AccessBankTanzaniaLimited DaresSalaam,Tanzania 50.70%ABMicrofinanceBankNigeriaLimited Lagos,Nigeria 50.06%AccessBankCJSC Baku,Azerbaijan 16.53%AccessBankLiberiaLimited Monrovia,Liberia 55.70%CJSCAccessBankTajikistan Dushanbe,Tajikistan 52.00%ABBankZambia Lusaka,Zambia 51.00%
LFSFinancialSystemsGmbH,Berlin,Germany,isashareholderofAccessHoldingandisarelatedpartyunderthetermsofIAS24.TheManagementServiceContractbetweenAccessHoldingandLFSiscom-mentedoninnotes17and44.ExpensesaccordingtoIFRS2withLFSamounttoEUR172,079in2011.InNovember2009andJuly2010,LFSreceivedamedium-termloanfromAccessHolding(EUR2,500,000)forthepurposeofpre-financingthebankingsoftwaremigrationproject.Theloanwaspricedatmarketconditions.TheoutstandingbalanceamountstoEUR2,000,000on31December2011.
LFSprovidesservicestoAssociatesintheframeworkofmanagementservicesagreements.Undertheseagreements,LFSFinancialSystemsGmbHsecondspartofthebanks’managementand,inreturn,receivesfeesfromtheinvesteecompanies.LFSfurtherprovidesacorebankingsoftwarepackagetoinvesteebanksandchargeslicenseandmaintenancefeesforthem.
In2011,ABApaidEUR1.3milliontoLFSFinancialSystemsGmbHforsuchservices(2010:EUR1.3million).AdditionallyABMpaidEUR1.1milliontoLFSFinancialServicesGmbH.ThebalancesrelatedtoLFSamounttoEUR114,023.
ABTJpaidEUR846,684toLFSFinancialSystemGmbH(2010,EUR205,852)accordingly.ABLpaidEUR162,109andABTEUR284,701.
OutstandingbalancesofABNwithLFSasat31December2011amounttoEUR75,353relatingtopaymentsonbehalfofLFS.PaymentsforservicestoLFSamounttoEUR253,129.LiabitlitesrelatedtoLFSamounttoEUR96,967.
ABAgrantaloantoABTamountingtoEUR2.4million.Noloanshavenbeendisbursedtomembersofthemanagementorsupervisoryboard.
(52) Government grants
FortheimplementationofmicrofinanceinstitutionsinNigeria,LiberiaandZambia,thesebanksrecei-vedgovernmentgrants.TheGroupisusingtheincomeapproach.IncurredexpensesofEUR2.0millionhavebeenrecoveredbygrantincomeandweredeductedfromexpensesintheincomestatement.
Notes to the Consolidated Financial Statements 2011
(53) Supervisory Board
Asof31December2011,theSupervisoryBoardwascomprisedofthefollowingmembers: Mr.HywelRees-Jones,London,UK(Chairman) Dr.BerndZattler,Berlin,Germany,(DeputyChairman), Mr.SyedAftabAhmed,Washington,USA Mr.EdvardasBumsteinas,Luxembourg, Mr.TryfanEvans,Boston,USA, Ms.EvaWitt,Frankfurt,Germany(until1September2011) Mr.FrankBellon,Frankfurt,Germany(since14November2011) Mr.EltjoKok,Leiden,Netherlands
Themembersofthesupervisoryboarddidnotreceiveanycompensation.
(54) Management Board
SinceitsfoundationinAugust2006,AccessHoldingismanagedbyLFSFinancialSystemsonthebasisofaManagementServiceContract.LFShassecondedtwoofitsseniorstaffmemberstomanageAccessHolding:
ThomasEngelhardt,Berlin,Germany,istheChairmanoftheManagementBoardofAccessHolding.
ChristophDiehl,Berlin,Germany,isaMemberoftheManagementBoard.
RegardingtheremunerationfortheManagementBoardofAccessHoldingtheGroupelectstoapplytheprotectionclausepursuanttosection286Paragraph4oftheGermanCommercialCode(HGB).
(55) Other staff
OtherstaffmembersallocatedtoAccessHoldingincludeMr.PatrickSchoenebornasSeniorInvestmentandControllingOfficers,Mr.MarcusSteinaslegaladvisorandMr.AlexanderPinhammer-Zschocherasaccountant.
(56) Auditors’ remuneration
Theauditors’remunerationinaccordancetoGermanCommercialCodeisdistributedasfollows:
Auditors’ remuneration EURAuditfees 92,911feesrelatingtoprioryear 7,911Otherservices -Total 97,911
(57) Equity holdings according to German Commercial Law
2011 2010Name of Institution Domicile Share in % Share in %AccèsBanqueMadagascar Antananarivo,Madagascar 44.00% 44.00%AccessBankTanzaniaLimited DaresSalaam,Tanzania 50.70% 46.98%ABMicrofinanceBankNigeriaLimited Lagos,Nigeria 50.06% 58.40%AccessBankCJSC Baku,Azerbaijan 16.53% 16.53%AccessBankLiberiaLimited Monrovia,Liberia 55.70% 53.50%CJSCAccessBankTajikistan Dushanbe,Tajikistan 52.00% 52.00%ABBankZambia Lusaka,Zambia 51.00% -
ChangeoftheshareinABNandABLdidnothaveaneffectonthecontroloftheseentities.FortheconsolidationofABTandABZpleaserefertonote7.
98
AccessHolding|AnnualReport2011
Contact Addresses
Access Microfinance Holding AGSchönhauser Allee 10-1110119 Berlin, GermanyPhone: (+49) 30-3087470Email: [email protected]
AccessBank in AzerbaijanAccessBank Head Office137 Alofsat Guliyev str.Baku, AZ1000 Azerbaijan Phone: (+99412) 493-07-26Email: [email protected]
AccèsBanque MadagascarImmeuble Bir Hackeim, Lot IBG 21 Ter,AntsahavolaAntananarivo 101, MadagascarPhone: (+261) 202232234Email: [email protected]
AccessBank Tanzania LtdP.O. Box 95068,Dar-es-Salaam, TanzaniaPhone: (+255) 22-2774355Email: [email protected]
AB Microfinance Bank NigeriaIkeja (Head Office)9, Oba Akran Avenue, Ikeja, Lagos, NigeriaPhone: (+234) 1-4482155-8Email: [email protected]
AccessBank Liberia20th Street, Sinkor,Tubman Boulevard Monrovia, LiberiaPhone: (+231) 7-7852135Email: [email protected]
AccessBank Tajikistan61/1 Firdavsi str.Dushanbe, 734061 Republic of TajikistanPhone: (+992) 372319824Email: [email protected]
AB Bank ZambiaStand No. 7393, Ground Floor, Chainda place off Cairo Road,Lusaka, ZambiaMonday- Friday 08:00-16:00Phone: (+260) 211220835/36/38/40Email: [email protected]
Head OfficeAccessHolding
AccessBankNetwork