ICB FINANCIAL GROUP HOLDINGS AG - 2008 Annual Report

Apr 15, 2009 (PR Newswire Europe via COMTEX) -- ICBNE | Quote | Chart | News | PowerRating -- e>ICB FINANCIAL GROUP HOLDINGS AG ("ICB") 2008 ANNUAL REPORT Following is a copy of ICB's 2008 Annual Report dispatched to shareholders on Tuesday, 14 April 2009. A pdf version is available from the Company's website (www.icbankingroup.com). The Company's AIM nominated adviser is RFC Corporate Finance Ltd. Contact Stephen Allen or Trinity McIntyre on +61894802500. CONTENTS Group's Global Presence 02 - 03 Corporate Information 04 Board of Directors 05 - 06 Chairman's Statement 07 - 08 Corporate Governance Report 09 - 11 Financial Statements - Statement by Directors 12 - Report of the Statutory Auditors 13 - 14 - Consolidated Income Statement 15 - Consolidated Balance Sheet 16 - Consolidated Cash Flow Statement 17 - 18 - Consolidated Statement of Changes in Equity 19 - 20 - Notes to the Consolidated Financial Statements 21 - 69 VISION To be a globally-recognised international banking group with a primary focus on emerging economies. GROUP'S GLOBAL PRESENCE (REFER TO THE COMPANY'S WEBSITE WWW.ICBANKINGROUP.COM FOR A LOCATION MAP OF THE GROUP'S OPERATIONS) HOLDING COMPANY ICB Financial Group Holdings A.G. (Incorporated in Switzerland) EUROPE International Commercial Bank SH.A. (Incorporated in Albania) 100% AFRICA International Commercial Bank Ltd. (Incorporated in Ghana) 100% International Commercial Bank (Djibouti) S.A. (Incorporated in Djibouti) 99.9% International Commercial Bank (Sierra Leone) Ltd. (Incorporated in Sierra Leone) 99.9% International Commercial Bank (Gambia) Ltd. (Incorporated in Gambia) 99.1% International Commercial Bank (Mozambique) S.A. (Incorporated in Mozambique) 99.9% International Commercial Bank S.A. (Incorporated in Guinea) 97% International Commercial Bank Ltd. (Incorporated in Malawi) 100% International Commercial Bank (Tanzania) Ltd. (Incorporated in Tanzania) 20% International Commercial Bank Senegal S.A. (Incorporated in Senegal) 20% ASIA ICB Global Management Sdn. Bhd. (Incorporated in Malaysia) 100% PT Bank Bumiputera Indonesia Tbk (Incorporated in Indonesia) 67.1% International Commercial Bank Lao Ltd. (Incorporated in Lao) 100% ICB Islamic Bank Ltd. (Incorporated in Bangladesh) 50.1% CORPORATE INFORMATION D I R E C T O R S MICHAEL ROBERT HANLON Chairman/Independent Director (Member of Audit and Risk Management Committee) JOSEPHINE PREMLA SIVARETNAM Non-Independent Director (Member of Nomination Committee and Remuneration Committee) RENE FRITSCHI Independent Director (Chairman of Nomination Committee) KENNETH KWAMI KWAKU Independent Director (Chairman of Remuneration Committee) PAUL ROBERT PHILIPPS BRIDGES Independent Director (Chairman of Audit and Risk Management Committee) LIM TEONG LIAT Independent Director (Member of Audit and Risk Management Committee) OFFICES Registered Office (Switzerland) Schulhausstrasse I CH-8834 Schindellegi Switzerland Tel: +41 44 687 4550 Fax: +41 44 687 4551 Management Office (Malaysia) No. 3, Jalan Sri Hartamas 7 50480 Kuala Lumpur, Malaysia Tel: +603 6201 6051 WEBSITE www.icbankingroup.com NOMINATED ADVISER RFC Corporate Finance Limited Level 14, 19-31 Pitt Street Sydney NSW 2000 Australia Level 15, QV1 Building 250 St Georges Terrace Perth WA 6000, Australia BROKER Keith, Bayley, Rogers & Co. Limited 2nd Floor Finsbury Tower 103-105 Bunhill Row London EC1Y 8LZ COMPANY AUDITOR BDO Visura, Fabrikstrasse 50 8031 Zurich, Switzerland SHARE REGISTRAR In Switzerland (Shares) ShareCommService AG Europastrasse 29 CH-8152 Glattbrugg, Switzerland Tel: +044 809 5858 Fax: +044 809 5859 In the UK (CREST Depositary Interests) Euroclear UK & Ireland Limited 33 Cannon Street London EC4M 5SB, United Kingdom LISTING AIM Market, London Stock Exchange Listed on 17th May 2007 STOCK CODE ICB BOARD OF DIRECTORS MICHAEL ROBERT HANLON Chairman/Independent Director Michael Hanlon was appointed as the Chairman of ICB Financial Group Holdings AG, the holding company of the ICB Banking Group since 7 March 2007. He is also a member of the Audit and Risk Management Committee. He has a total of 44 years commercial banking experience, most of which was in the retail area. He spent 34 years with Barclays Bank Plc in the UK where he held a number of Senior Management and Senior Executive appointments, including Regional Director for the Bank's retail banking in Central London. Later, he joined the Raiffeisen Banking Group of Austria as Managing Director for retail banking at the Bank's Polish subsidiary, Raiffeisen Bank Polksa SA, where he was responsible for the creation and development of a retail banking capability. Michael joined the Islamic Bank of Britain in April 2003 as Managing Director where he had the responsibility of creating the very first Sharia compliant retail banking business in the UK and Western Europe. He retired from the Bank in 2006. An Associate of the Chartered Institute of Bankers, he regularly speaks at international conferences. Michael is married with two adult children. He enjoys travel, art, music, cycling and swimming. JOSEPHINE PREMLA SIVARETNAM Non-Independent Director Josephine Sivaretnam was appointed as a Non-Independent Non-Executive Director of ICB Financial Group Holdings AG on 7 March 2007. She is also a member of both the Nomination and Remuneration Committees. Through Panhelligan Investments Limited, she is a substantial shareholder in the Company. A lawyer by profession, Josephine spent her early career in the Malaysian Judicial and Legal Services as a Deputy Public Prosecutor until 1992 after which she commenced private practice. Josephine was responsible for the early establishment of the ICB Banks in Europe, Africa and for acquisitions made by the Group. She is a Non-Executive Director of a Malaysian listed company, The Nomad Group Bhd. Josephine graduated with a LLB (Hons) from University of Malaya and a LLM from the London School of Economics and Political Science. RENE FRITSCHI Independent Director Rene Fritschi was appointed as an Independent Non-Executive Director of ICB Financial Group Holdings AG since 20 July 2006. He is also the Chairman of the Nomination Committee. Rene started his career in 1973 as a trainee at the Handelsbank NW Zurich, Switzerland and in 1978 moved to Manufacturers Hanover Trust Co Zurich, Switzerland. He later worked for Bank Audi in Zurich before joining Fundus Treuhand AG in 1989. Rene then joined Deutsche Bank in 1994. Since 1998 he has been Chairman of Medio Consult where his experience as a senior bank director in international trade, major commercial banking, private banking, estate planning and asset management has been an advantage. Rene is a Swiss resident and is fully conversant in English, German and French. He was born in 1948 and is married with two adult daughters. He graduated in economics in 1979. His hobbies include long distance running and cross country skiing. He is familiar with Asia and Africa where he has travelled extensively. KENNETH KWAMI KWAKU Independent Director Ken Kwaku was appointed as an Independent Non-Executive Director of ICB Financial Group Holdings AG since 7 March 2007. He is also the Chairman of the Remuneration Committee. Ken, who hails from Ghana, speaks English, French, Portuguese and Swahili; holds a PhD from University of Toronto and a First Class in Economics and Political Science from McGill University. He has also attended Harvard's Graduate School of Business. Since 2004 Ken has been Special Advisor to President MKapa (now retired) of Tanzania, Special Advisor Investment Climate Facility for Africa, Advisor to the Director General UNIDO, Chairman DCDM Africa and Advisor Hifadhi Business Park, East Africa. Ken served with the World Bank Group from 1976 to 2004 and held positions including Chief MIGA Africa Representative 2002 - 2004 and Manager for Africa 1998 - 2002. Between 1995 and 1998, he was seconded from the World Bank Group as Advisor to the Namibian Government. Ken, who has numerous academic and professional awards and publications, regularly speaks at international conferences. PAUL ROBERT PHILIPPS BRIDGES Independent Director Paul Bridges was appointed as an Independent Non-Executive Director of ICB Financial Group Holdings AG since 7 March 2007. He is also the Chairman of the Audit and Risk Management Committee. He is an experienced banker and was with Standard Chartered Bank from 1962 to 1998. He held senior managerial roles in Credit Risk Management and served in East and South East Asia, USA, Middle East and Africa. Paul was also responsible for the Financial Analysis Expert System, the creation of a global database and was actively involved in the global credit reengineering programme. Since retiring from Standard Chartered, Paul has focused on the development and facilitation of programmes on Credit Risk Management, Total Risk Management, Credit Audit, Problem Loan Management, Debt Recovery and Financial Risk Analysis for several banks. Paul's main expertise is in risk management and he has been a consultant to banks where he has carried out diagnostic studies and training programmes in credit risk and debt recovery. His other projects include management of NPLs, analysis and restructuring of assets. He is married and has two adult daughters. Paul also speaks Bahasa Indonesia. LIM TEONG LIAT Independent Director Lim Teong Liat was appointed as an Independent Non-Executive Director of ICB Financial Group Holdings AG since 18 December 2007. He is also a member of the Audit and Risk Management Committee. He is a Fellow member of The Institute Of Chartered Accountants in England and Wales. Mr Lim started his banking career in 1986 as a Management Accountant at Standard Chartered Bank, Malaysia, working his way up to senior management roles in Internal Control and Audit. He later worked from 1994 to 2001 for the Hong Leong Banking Group, a Malaysian bank as General Manager Operations and subsequently General Manager Consumer Division. He was then appointed as Independent Director of Alliance Bank Berhad, Malaysia from 2004 to 2006 where he also served as a member of the Risk Management and Audit Committee. Mr Lim is also presently a member of the Board of Commissioners of PT Bank Bumiputera, Indonesia. CHAIRMAN'S STATEMENT Dear Shareholders, 2008 has been a year which has seen unprecedented turmoil in world financial markets. The reach of the global economic decline has been such that trading across the Group has not escaped impact, although I am pleased to say that the influence of this has been limited as a consequence of the geographic spread of business and the fact that operations are centred exclusively on the provision of retail banking services. Profit after tax amounted to US$13m, marginally down from the 2007 result of US$14.8m. Trading in all the countries has been challenging, but most of the operations in Africa did well, the region delivering a contribution of US$6.3m, compared to US$4.1m in 2007. Elsewhere, Europe and Asia, results were well down on the achievements of 2007. Performances by the Asian region were seriously affected by poor results from ICB Islamic Bank, Bangladesh (formerly the Oriental Bank in which the Group acquired a 50.1% interest in March 2008) and Bank Bumiputera in Indonesia. Difficult trading conditions in Indonesia resulted in lower loan growth in Bank Bumiputera leading to a much reduced contribution for the year. Within ICB Islamic Bank, Bangladesh it was necessary to make additional provisions of US$17m for loan loss impairment and contingent liabilities. Overall the performance for Asia was that of a negative result of US$16.4m. The European region, which is represented by Albania, also delivered a negative result of US$2.1m. This was primarily due to accounting adjustments required to achieve conformity with IFRS reporting requirements. Group net interest income amounted to US$48.8m (US$48.5m in 2007). With the notable exception of Indonesia most countries within the Group reported increased income in comparison to 2007. In addition, recent investments, Bangladesh, Malawi and Laos provided added contributions. In contrast, Group expenses increased by 41%, rising to US$63.7m (US$45.0 in 2007). Much of this increase reflects the cost of consolidating the Bangladesh operation within the Group, which in turn has been primarily responsible for the deterioration in the cost/income ratio for the Group to 84% (65% in 2007). Impairment charges for loans amounted to US$14.4m (US$13.0m in 2007). In 2007 the figures were adversely affected by a high level of provisions arising within Bank Bumiputera, Indonesia. I am pleased to report that the position here has much improved during the past year with the charge being reduced from US$12.2m in 2007 to US$3.4m for 2008. However, this improvement was off-set by a new charge arising within ICB Islamic Bank, Bangladesh at US$10.1m. As anticipated, the downturn in the world economies has resulted in loan growth slowing in all the regions. I have mentioned above the difficulties that were experienced in the Indonesian market which resulted in a reduction of some US$39.4m in loans. Taking into consideration the contribution of US$86.5m from recent investments in Bangladesh, Laos and Malawi, the year end total for the Group is US$588.0m as at December 2008 compared to US$540.6m at the end of 2007. "Most of the operations in Africa did well, the region delivering a contribution of US$6.3m, compared to US$4.1m in 2007." Another feature of the economic uncertainty has been seen within deposit growth with a more cautious market approach being adopted by consumers. The Group results reflect an overall increase in deposits of 4.1%, although here again the recent investments, Bangladesh, Laos and Malawi have added US$152.9m new deposits for the year. In June 2008, I reported to shareholders the successful sale of the Group's investment in an associate, Sorak Financial Holdings Pte, which was completed in March. This resulted in an extraordinary gain of US$77.5m, although the benefit of this has been reduced through a charge of US$50m reflecting an impairment of `goodwill' arising on the acquisition of the 50.1% stake in ICB Islamic Bank. After consideration the Group Board concluded that the level of goodwill at US$100.6m was unlikely to be adequately supported by future expected cash flows and in recognition of this it was considered prudent to make an impairment charge of US$50m. The Group continues to develop and expand its delivery channel capability to meet customer needs. The branch network remains the preferred customer point of contact and in support of this the ATM network is being rapidly expanded. During 2008 the network of branches has increased with additions in Ghana, Mozambique, Djibouti, Guinea, Sierra Leone, Albania and Indonesia. These together with the new investments have added further to the overall branch network, taking the total Group operating network to 141 branches at the end of 2008. I am delighted to once again inform shareholders of the Group's success in the Banker and Global Finance Awards for 2008. ICB Albania, ICB Djibouti and ICB Guinea all received `Bank of the Year' awards; for ICB Guinea this was the 5th consecutive year that such an award has been received and this represents a truly remarkable achievement. Our congratulations go to the Management and staff of each country for this success. In March 2009 the Board appointed Mr. Prem Kumar as Group CEO. He takes over from Mr. Harith Harun who has, for an extended period, held the responsibility as Acting CEO of the Group. Mr. Kumar, who graduated from the Asia Pacific Institute, New Zealand and is an Associate of the Australian Institute of Bankers, is a banker of some 35 years experience. Prior to joining ICB he was with the HSBC Group where he held Senior Management positions covering a wide range of business disciplines. I take this opportunity to welcome him to the Group and at the same time I extend to Mr. Harun our appreciation for his services as Acting CEO. I am pleased to say that Mr. Harun remains as a senior member of the Group's management team. With unfavourable world economic conditions likely to continue, the year ahead will remain one of uncertainty. However, I believe that the geographical diversity of the Group coupled with the conservative nature of its business model, position it well to respond to the challenges ahead. Whilst the strategy of building a wider geographic presence in countries with emerging economies remains, the immediate emphasis for the year ahead is to concentrate efforts towards a strengthening of performances particularly in the Asian region. The new investment in Bangladesh holds much potential and whilst there remains much to be done towards achieving such a goal, good progress is being made in both integrating ICB Islamic Bank within the Group and re-positioning it within its domestic market. In conclusion, I must extend gratitude on behalf of the Board to our shareholders, customers, business associates and the various regulatory authorities who have all provided sound support in a year of unprecedented uncertainty. We are indeed most grateful for this. The Board's sincere appreciation is also extended to the Management and staff employed across the Group. Their commitment and dedication to satisfying customer needs is very much reflected in the overall growth of the Group and its growing prominence as an international retail banking business. Michael R. Hanlon Chairman CORPORATE GOVERNANCE REPORT ICB Financial Group Holdings AG ("the Company") has in place a Policy Statement on Corporate Governance ("the Policy Statement") with the objective of promoting a culture of accountability, transparency and practice of sound judgment in the Company's pursuit of generating stakeholders' value amidst an increasingly competitive global market. The implementation of this Policy Statement is aimed at providing an operational framework for good corporate governance in the following areas: (a) provides guidance in defining the roles and responsibilities of the Board of Directors ("the Board"); (b) implements the operational framework of the Board; (c) establishment of appropriate committees to undertake the tasks and responsibilities of Board; (d) ensures strategic and business plans are developed; (e) implements risk management framework to cultivate a risk awareness culture within the organisation; (f) provides transparency in disseminating financial and non-financial information; (g) provides transparency in managing conflict of interest involving both internal and external parties; (h) provides guidance in developing key control mechanisms to ensure that both financial and non-financial information are accurate, adequate, complete and timely. This report describes how the Board has implemented the policies and provisions as set out in the Policy Statement. THE BOARD 1. Composition 1.1 As at the date of this report, the Board comprises six (6) members who are all Non-Executive Directors. Members of the Board are appointed for a one-year term until the next annual general meeting. Members may be re-elected. 1.2 The Board periodically reviews its composition in terms of the balance of Independent and Non-Independent Directors and the professional qualifications, experience and the necessary skills expected of its members to enable the Board to carry out its roles and responsibilities effectively. 2. Duties and Responsibilities 2.1 The Board is principally responsible for the overall business performance and corporate governance strategy of the Company. It provides stewardship in the development of the Company's strategic and business plans. 2.2 The Board is led by the Chairman, Mr Michael Hanlon, Independent Non-Executive Director. 3. Board Meetings 3.1 The Board meets at least twice a year (in 2008 the Board met eight (8) times) to review business performance, strategies, business plans and significant policies as well as to consider business and other proposals which require the Board's approval. 3.2 The number of Board meetings and the attendance for the financial year in review are set out below: DIRECTORS HELD DURING TENURE IN OFFICE ATTENDED Michael Hanlon 8 8 Josephine Sivaretnam 8 8 Paul Bridges 8 8 Ken Kwaku 8 3 Rene Fritschi 8 8 Lim Teong Liat 8 8 4. Delegation of Authority and Function 4.1. In order to support the effectiveness of the implementation of its roles and responsibilities, the Board has set up the following committees: (i) Audit and Risk Management Committee; (ii) Nomination Committee; and (iii) Remuneration Committee. Audit and Risk Management Committee The members of the Audit and Risk Management Committee are: Paul Bridges (Chairman) Michael Hanlon Lim Teong Liat The principal duties and responsibilities of the Audit and Risk Management Committee include the following: Audit - Approve the appointments of the internal auditors; review the adequacy of the scope of audits conducted by internal audit as well as its functions and resources, and evaluate the performance of the audit staff; - Assess and recommend the appointment of the external auditors; review their audit plan, scope of their audits and their audit reports; -Assess the performance of the external auditors and makes recommendations to the Board on their re-appointment or removal; - Review the internal and external audit reports to ensure that appropriate and adequate remedial actions are taken by management on significant lapses and controls and procedures that are identified; - Review the financial statements of the Company for recommendation to the Board for approval. Risk - Review the adequacy and effectiveness of risk management, internal control and governance system; - Review management's strategies and plans for mitigation of all types of risks faced by the business units; -Ensure risk management framework for various risks are set up and documented; -Approve risk management policies, risk management measurements and methodologies, risk exposures, tolerance limits and risk management processes. Nomination Committee The members of the Nomination Committee are: Rene Fritschi (Chairman) Josephine Sivaretnam The principal duties and responsibilities of the Nomination Committee are as follows: - Establish the policy and guidelines in regard to the appointment and re-appointment of members of the Board, appointments of chief executive officer and senior management and determining the requirements on their skills, experience, qualifications and other core competencies; - Assess and recommend candidates to fill vacancies for directors, chief executive officer and senior management; - Review the overall composition of the Board, in terms of the appropriate size and skills, and the balance between Independent and Non-Independent Directors; - Ensure that proper recruitment processes, training programmes as well as performance appraisal systems are established for employees at all levels. Remuneration Committee Members of the Remuneration Committee comprise the following: Ken Kwaku (Chairman) Josephine Sivaretnam The principal duties and responsibilities of the Remuneration Committee are: - Establish the remuneration policy for directors, chief executive officer and senior management; - Periodically review the terms and conditions of employment of directors, chief executive officer and senior management and when necessary, recommend changes. 5. Financial Reporting and Internal Control 5.1 The Board is responsible for ensuring the proper maintenance of accounting records of the Company. The Board is to ensure that the financial reports are prepared in accordance with the accounting policies, standards and guidelines of the relevant authorities. 5.2 The Board is to provide a balanced, clear and meaningful assessment of the financial position and prospects of the Company in all disclosure to shareholders, investors and the regulatory authorities. 5.3 The Board has the responsibility to develop, assess, review and maintain a system of internal controls covering financial controls as well as controls relating to operational, compliance and risk management. 5.4 The Board approves the annual business plans and budgets and periodically reviews reports from the management covering financial performances and key business indicators to monitor any significant variances of actual performances and budgets. 6. Remuneration of Directors The remuneration of Directors during the financial year is disclosed in Note 29 of the Audited Financial Statements. 7. Compliance Statement The Board considers that it has complied with the Company's Policy Statement on Corporate Governance for the financial year ended 31 December 2008. Statement by Directors We, Michael Robert Hanlon and Lim Teong Liat, being two of the directors of ICB Financial Group Holdings AG, do hereby state that in the opinion of the directors, the consolidated financial statements set out on pages 4 to 68 are drawn up in accordance with applicable International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group as at 31 December 2008 and of the results and the cash flow of the Group for the financial year ended on that date. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors Michael Robert Hanlon Lim Teong Liat Date: 31 March 2009 Report of the Statutory Auditors on the consolidated financial statements to the general meeting of ICB Financial Group Holdings AG, Schindellegi As statutory auditor, we have audited the accompanying consolidated financial statements of ICB Financial Group Holdings AG, which comprise the income statement, balance sheet, cash flow statement, statement of changes in equity and notes (pages 4 to 68) for the year ended 31 December 2008. BOARD OF DIRECTORS` RESPONSIBILITY The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. AUDITOR'S RESPONSIBILITY Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OPINION In our opinion, the consolidated financial statements for the year ended 31 December 2008 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law. Report of the Group Auditors REPORT ON OTHER LEGAL REQUIREMENTS We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible with our independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation and fair presentation of consolidated financial statements according to the instructions of the Board of Directors. We recommend that the consolidated financial statements submitted to you be approved. Zurich, 31 March 2009. BDO Visura Markus Eugster Auditor in Charge Swiss Certified Accountant Licensed Audit Expert Markus Egli Swiss Certified Accountant Licensed Audit Expert CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 2008 2007 Notes USD'000 USD'000 Interest income 101,707 96,609 Interest expense (52,892) (48,044) Net interest income 4 48,815 48,565 Fee and commission income 11,360 10,574 Fee and commission expense (163) (145) Net fee and commission income 5 11,197 10,429 Foreign currency gain 6 3,593 3,078 Gains less losses from financial investments 1,247 1,552 Gain on disposal of associate 30 77,584 3,670 Other operating income 1,616 2,570 Impairment charges for loans and advances to 12 (14,422) (13,051) customers Impairment of goodwill 16 (50,000) - Operating expenses 7 (63,752) (45,076) Operating profit 15,878 11,737 Share of results of associates 15 (33) 5,823 Profit before taxation 15,845 17,560 Tax expense 9 (2,840) (2,702) Profit for the period 13,005 14,858 Attributable to: - Shareholders of the Company 21,282 13,988 - Minority interests (8,277) 870 13,005 14,858 Earnings per share attributable to shareholders of the Company - Basic and diluted (Expressed in USD per share) 10 0.12 0.09 The accompanying notes form an integral part of the financial statements. CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008 2008 2007 Notes USD'000 USD'000 ASSETS Cash and bank balances 11 276,738 239,769 Loans and advances to customers 12 588,058 540,683 Financial investments 13 122,539 93,221 Foreclosed properties 14 17,728 21,056 Investment in associates 15 1,846 74,364 Goodwill and other intangible assets 16 55,036 5,341 Prepaid lease payments 17 107 165 Property and equipment 18 17,083 9,251 Other assets 19 36,443 40,489 Deferred tax assets 20 4,537 1,945 Total assets 1,120,115 1,026,284 LIABILITIES Deposits from other bank 133,470 39,157 Deposit from customers 21 777,652 746,734 Other liabilities 22 56,442 39,326 Tax liabilities 3,046 2,093 Deferred tax liabilities 20 303 192 Total liabilities 970,913 827,502 EQUITY Paid up share capital 23 145,960 145,960 Share premium 782 782 Retained earnings 24 45,012 34,903 Other reserves 25 (2,655) (2,341) Equity attributable to shareholders of the Company 189,099 179,304 Minority interest (39,897) 19,478 149,202 198,782 Total equity and liabilities 1,120,115 1,026,284 The accompanying notes form an integral part of the financial statements. CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 2008 2007 USD'000 USD'000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 15,845 17,560 Adjustment for : Impairment charges for loans and advances to customers 14,422 13,051 Amortisation of prepaid lease rental 37 46 Amortisation of intangible assets 397 417 Depreciation of property and equipment 3,096 2,185 Loss on disposal of property and equipment 20 6 Gain on disposal of associate (77,584) (3,670) Negative goodwill - (2) Impairment of goodwill 50,000 - Recovery of loan (601) (690) Share of results of associates 33 (5,823) Gain on foreign exchange translation (3,593) (3,078) Cash flow from operations before working capital changes 2,072 20,002 Increase in operating assets (21,778) (106,457) (Decrease)/increase in operating liabilities (34,009) 150,004 Cash (used in)/generated from operations (53,715) 63,549 Tax paid (1,994) (2,263) Net cash (used in)/from operating activities (55,709) 61,286 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of a subsidiary, net of cash acquired (38,474) - Proceeds from sale of associate 142,006 6,068 Purchase of property and equipment (5,376) (4,570) Purchase of intangible assets (489) (374) Proceeds from sale of property and equipment 24 12 Dividend received 2,086 2,912 Increase in investment in associate - (982) Decrease in financial investments 38,159 29,687 Increase in financial investments (30,998) (14,135) Net cash from investing activities 106,938 18,618 CONSOLIDATED CASH FLOW STATEMENT - CONT'D FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 2008 2007 USD'000 USD'000 CASH FLOWS FROM FINANCING ACTIVITIES Repayment of shareholder's advances - (13,866) Dividend paid to minority interest (156) (79) Net proceeds received from issuance of shares by Company - 9,017 Net cash used in financing activities (156) (4,928) Net increase in cash and cash equivalents 51,073 74,976 Cash and cash equivalents at the beginning of the year 194,224 108,951 Effect of exchange rate changes on cash and cash (16,653) 10,297 equivalents Cash and cash equivalents at the end of the year (Note 26) 228,644 194,224 The accompanying notes form an integral part of the financial statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 <--ATTRIBUTABLE TO SHAREHOLDERS--> OF THE COMPANY SHARE SHARE OTHER RETAINED MINORITY TOTAL CAPITAL PREMIUM RESERVES EARNINGS INTEREST USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 At 1 January 2008 145,960 782 (2,341) 34,903 19,478 198,782 Currency translation differences arising from translation to - - (9,734) - (2,471) (12,205) presentation currency Loss in fair value on - - (1,753) - (861) (2,614) available-for-sale securities Transfer of reserve to retained earnings arising from disposal - - 11,173 (11,173) - - of associate Net income and expenses - - (314) (11,173) (3,332) (14,819) recognised directly in equity Profit for the year - - - 21,282 (8,277) 13,005 Total recognised income - - (314) 10,109 (11,609) (1,814) and expense for the period Minority interest from - - - - (47,610) (47,610) business combination Dividend paid to - - - - (156) (156) minority interest At 31 December 2008 145,960 782 (2,655) 45,012 (39,897) 149,202 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - CONT'D FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 <------Attributable to shareholders-----> of the Company Share Share Shareholder's Other Retained Minority Capital Premium Advances Reserves Earnings Interest Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 At 31 December 2006 59,549 - 91,618 (372) 24,212 19,508 194,515 Currency translation differences arising from translation - - 424 5,087 - (783) 4,728 to presentation currency Loss in fair value on available-for-sale securities - - - (62) - (30) (92) Transfer of realised translation reserve to retained earnings arising from capitalisation and repayment of shareholder's advances - - - 3,187 (3,187) - - Share of post- acquisition reserves of associates - - - (10,291) - - (10,291) Transfer of reserve to retained earnings arising from - - - 110 (110) - - disposal of associate Net income and expenses recognised directly in equity - - 424 (1,969) (3,297) (813) (5,655) Profit for the year - - - - 13,988 870 14,858 Total recognised income and expense for the year - - 424 (1,969) 10,691 57 9,203 Conversion of shareholder's advances to share capital 78,176 - (78,176) - - - - Repayment of - - (13,866) - - - (13,866) shareholder's advances Acquisition of minority interest in a subsidiary - - - - - (15) (15) Dividend paid to - - - - - (79) (79) minority interest Issue of shares 8,235 782 - - - 7 9,024 At 31 December 2007 145,960 782 - (2,341) 34,903 19,478 198,782 The accompanying notes form an integral part of the financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 1. CORPORATE INFORMATION ICB Financial Group Holdings AG (the "Company") is a limited liability company and is incorporated and domiciled in Switzerland. The address of its registered office is Schulhausstrasse 1, CH-8834 Schindellegi, Switzerland. The principal activity of the Company is that of an investment holding company. The principal activities of the subsidiaries are stated in Note 27. These consolidated financial statements have been approved for issue by the Board of Directors on 31 March 2009. In conjunction with the implementation of the new provisions governing control processes during the preparation of financial statements and consolidated financial statements according to the Swiss Code of Obligations, existing control processes that are performed as part of operational business processes and in connection with the preparation of financial statements and consolidated financial statements have been reviewed and further optimized. As well as ensuring compliance with legal/regulatory requirements, the focus is on ensuring the effectiveness, efficiency and reliability of business processes as well as the adequacy of financial flows and financial information. All controls are reviewed regularly, "key controls" on an annual basis and are adjusted if necessary, the results reported to the Audit Committee. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements of the Group have been prepared and approved by the directors in accordance with International Financial Reporting Standards ("IFRS"). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and financial liabilities held at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (a) Basis of Preparation - Cont'd As of 1 January 2008 different new interpretations stepped into force (Amendments to IAS 39 and IFRS 7, IFRIC 11 (International Financial Reporting Interpretations Committee-IFRIC), IFRIC 12 and IFRIC 14). These did not have any influence on the consolidated financial statements of the Company. The Company has chosen not to early adopt the following standards and interpretations that were issued but not yet effective for accounting periods beginning 1 January 2008: - IAS 23 Borrowing Costs (Amendment) - IFRS 2 Share-based Payment: Vesting Conditions and Cancellations (Amendment) - IAS 1 Presentation of Financial Statements: A Revised Presentation (Amendment) - IAS 27 IAS 27 Consolidated and Separate Financial Statements (Amendment) - IAS 32 & IAS 1 Puttable Financial Instruments and Obligations Arising on Liquidation (Amendment) - IFRS 1 and IAS 27 Cost of an Investment in a subsidiary, jointly- controlled entity or association (Amendment) - IAS 39 Financial Instruments: Recognition and Measurement: Eligible Hedged Items (Amendment) - IFRS 7 Improving Disclosures about Financial Instruments (Amendment) - IFRIC 13 Customer Loyalty Programmes - IFRIC 15 Agreements for the Construction of Real Estate - IFRIC 16 Hedges of a Net Investment in a Foreign Operation - IFRIC 17 Distributions of Non-cash Assets to Owners - IFRIC 18 Transfer of Assets from Customers The Company has considered these amendments and does not expect them to have a significant effect on the financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (b) Basis of Consolidation (i) Subsidiaries Subsidiaries are all entities over which the Group has the power to directly or indirectly govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired are fair valued at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. Inter-company transactions, balances and unrealised gains or transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. (ii) Associates Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding between 20% to 50% of the voting rights. Investment in associates is accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identifiable on acquisition. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (b) Basis of Consolidation - cont'd (ii) Associates - cont'd The Group's share of its associates' post-acquisition profits or losses is recognised in the income statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. (c) Segmental Reporting A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. A business segment is a group of assets and operations engaged in providing products and services that are subject to risks and returns that are different from those of other business segments. (d) Foreign Currency Translation (i) Functional and Presentation Currency The consolidated financial statements are presented in US dollars (USD), because the currency is more commonly used in international trade. All values are rounded to the nearest thousand (USD'000) except when otherwise indicated. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (d) Foreign Currency Translation - cont'd (i) Functional and Presentation Currency The functional currency of the Company, subsidiaries and associates are as follows: The Company ICB Financial Group Holdings AG Swiss Francs (CHF) Subsidiaries ICB-Banco Internacional De Comercio, S.A.R.L Mozambique Metical (MZN) International Commercial Bank (Gambia) Ltd. Gambian Dalasi (GMD) International Commercial Bank (Sierra Leone) Limited Sierra Leone Leones (SLL) International Commercial Bank SH.A. Albanian Lek (ALL) International Commercial Bank S.A. Guinea Francs (GNF) PT Bank Bumiputera Indonesia Tbk Indonesian Rupiah (IDR) International Commercial Bank Limited Ghana Cedis (GHS) ICB Global Management Sdn. Bhd. Malaysian Ringgit (MYR) International Commercial Bank (Djibouti) S.A. Djibouti Franc (DJF) ICB Islamic Bank Ltd Bangladeshi Taka (BDT) International Commercial Bank Ltd-Malawi Malawi Kwacha (MWK) International Commercial Bank (Lao) Ltd Lao Kip (LAK) Associates International Commercial Bank Senegal S.A. Communaute Financiere Africaine Francs BCEAO (XOF) International Commercial Bank (Tanzania) Limited Tanzanian Schilings (TZS) Sorak Financial Holdings Pte. Ltd. Singapore Dollar (SGD) (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the prevailing exchange rates at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into the functional currency using the rate of exchange at the date of initial transaction. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (d) Foreign Currency Translation - cont'd (iii) Group Companies The results and financial position of the holding company, subsidiaries and associates (none of which has the currency of a hyperinflationary economy) that have different functional currencies compared to the presentation currency are translated into the presentation currency as follows: i. assets and liabilities for each balance sheet presented are translated at the closing rate at the balance sheet date; ii. income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and iii. all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings, are taken into shareholders' equity. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (d) Foreign Currency Translation - cont'd (iii) Group Companies - cont'd The average and closing rates used in the translation of financial statements from functional currency to presentation currency are as follows : Average rate Closing rate 2008 2007 2008 2007 1 CHF 0.9235 0.8403 0.8724 0.8850 1 SGD - 0.6641 - 0.6917 1 MYR 0.2997 0.2916 0.2887 0.3021 1 GMD 0.0450 0.0402 0.0373 0.0469 1 MZN 0.0411 0.0388 0.0416 0.0420 1 GHS 0.9416 1.0741 0.8241 1.0447 1000 SLL 0.3376 0.3407 0.3333 0.3378 1000 ALL 11.9366 11.1200 11.3753 12.0600 1000 GNF 0.2155 0.2418 0.1938 0.2400 1000 IDR 0.1027 0.1091 0.0917 0.1065 1000 DJF 5.6268 5.6268 5.6268 5.6268 1000 XOF 2.2239 2.0998 2.1216 2.2442 1000 TZS 0.8321 0.8081 0.7811 0.8834 1000 BDT 14.5499 - 14.5191 - 1000 LAK 0.1170 - 0.1175 - 1000 MWK 7.1429 - 7.1429 - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (e) Interest Income and Expense Interest income and expenses for all interest-bearing financial instruments except for those classified as held-for-trading or designated at fair value (other than debt issued by the Group) are recognised in the income statement using the effective interest rates of the financial assets or financial liabilities to which they relate. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments earned or paid on a financial asset or financial liability through its expected life or, where appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument but not future credit losses. The calculation includes all amounts paid or received by the Group that are an integral part of the effective interest rate, including transaction costs and all other premiums or discounts. Interest on impaired financial assets is calculated by applying the original effective interest rate of the financial asset to the carrying amount as reduced by any allowance for impairment. (f) Non-interest income (i) Fees and Commissions Fees and commissions are accounted for as follows: - income earned from the provision of services over a period of time is recognised over the service period during which the related service is provided or credit risk is undertaken; and - income which forms an integral part of the effective interest rate of a financial instrument is recognised and recorded as interest income. (ii) Dividend income Dividend income is recognised when the right to receive payment is established. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (g) Financial Assets The Group determines the classification of its investments at initial recognition and classifies its financial assets as follows: (a) Classification (i) Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term if so designated by management. Financial assets may be designated at fair value through profit or loss when: a) the designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets on a different basis, or b) a group of financial assets are managed and its performance evaluated on a fair value basis. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money or services directly to a debtor with no intention of trading the receivables. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group's management has the positive intention and ability to hold to maturity. If the Group sells other than an insignificant amount of held-to-maturity assets, the entire category would be tainted and reclassified as available-for-sale. (iv) Available-for-sale investments Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (g) Financial Assets - Cont'd (b) Recognition and Derecognition (i) Initial Recognition Purchases and sales of financial assets at fair value through profit or loss, held-to-maturity and available-for-sale are recognised on trade-date (the date on which the Group commits to purchase or sell the asset). Loans are recognised when cash is advanced to the borrowers. Financial assets are initially recognised at fair value plus, for those financial assets not carried at fair value through profit or loss, directly attributable transaction costs. (ii) Subsequent measurement Financial assets held at fair value through profit or loss are subsequently carried at fair value, with gains and losses arising from changes in fair value taken directly to the income statement. Available-for sale financial investments are subsequently carried at fair value, with gains and losses arising from changes in fair value taken to a separate component of equity until the asset is sold or is impaired, when the cumulative gain or loss is transferred to the income statement. Loans and receivables and held to maturity financial assets are subsequently carried at amortised cost using the effective interest method. The fair values of quoted financial assets in active markets are based on current prices. If the market for a financial asset is not active and for unlisted securities, the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants. (iii) Reclassifications Reclassification of financial assets other than as disclosed below between categories are not permitted following their initial recognition. Held-to-maturity assets are reclassified to the available-for-sale category if the portfolio becomes tainted following the sale of other than and insignificant amount of held-to-maturity assets prior to their maturity. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - 31 December 2008 2. SIGNIFICANT ACCOUNTING POLICIES - CONT'D (g) Financial Assets - Cont'd (b) Recognition and Derecognition - Cont'd (iv) Renegotiated loans Loans whose original terms have been modified are considered renegotiated loans. If the renegotiation occurs before a customer is either past due or impaired and the revised terms are consistent with those readily available on the market, the account will not be considered past due. If the renegotiations are on terms that are not consistent with those readily available on the market, this provides objective evidence of impairment and the loan will remain past due until the customer complies with the revised terms. (v) Derecognition Financial assets are derecognised when the rights to receive cash flows from the financial as

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