2013 and 2012 - Heritage Bank

Transcription

,
... -.;,
HERITAGE BANK LIMITED
FINANCIAL STATEMENTS
31ST DECEMBER 2013 AND 2012
FINANCIAL STATEMENTS
31 ST DECEMBER 2013 AND 2012
INDEX
Page
Report of the auditor to the
Board of Directors and Shareholders
1-2
Statements of financial position
3
Statements of comprehensive
4
income
Statements of stockholders' equity
5
Statements of cash flows
6&7
Notes to the financial statements
8 - 21
~AKER
TILLY
HULSE
Cor. 12 Baymen Ave &
Calle AI Mar
Belize City
Belize
Central America
T: +501-223-2953/2954
F: +501-223-2989
[email protected]
www.bakertillyhulse.com
Page 1
REPORT OF THE AUDITOR
TO THE BOARD OF DIRECTORS tD
SHAREHOLDERS OF
We have audited the accompanying financial statements of Heritage Bank Limited
which comprise the statements of fifancial position as at 318t December 2013 and
2012 and the statements of comprehFsive income, statements of changes in equity
and cash flows for the years then ~nded, and summary of significant accounting
policies and other explanatory notes.
Management's Responsibility for the Financial Statements
Management is responsible for the pr~paration and fair presentation of these financial
statements in accordance with Intern .onal Financial Reporting Standards, and for
such internal control as management d termines is necessary to enable the preparation
of financial statements that are free fr m material misstatement, whether due to fraud
or error.
Auditor's Responsibility
Our responsibility is to express an op~. on on these financial statements based on our
audits. We conducted our audits i accordance with International Standards on
Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reas nable assurance about whether the financial
statements are free from material misst ternent.
An audit involves performing proced es to obtain audit evidence about the amounts
and disclosures in the financial statem nts. The procedures selected depend on the
auditor's judgment, including the asses ment of the risks of material misstatement of
the financial statements, whether du to fraud or error. In making those risk
assessments, the auditor considers inte al control relevant to the entity's preparation
and fair presentation of the fmancial s atements in order to design audit procedures
that are appropriate in the circumstan es, but not for the purpose of expressing an
opinion on the effectiveness of the en ty's internal control. An audit also includes
evaluating the appropriateness of acco ting policies used and the reasonableness of
accounting estimates made by mana ement, as well as evaluating the overall
presentation of the financial statements.
An independent member of Baker Tilly International
Page 2
REPORT OF THE INDEPENDENT AUDITOR (continued)
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 financial statements present fairly, in all material respects, the
fmancial position of Heritage Bank Limited as at 31st December 2013 and 2012 and of
its financial performance and cash flows for the years then ended in accordance with
International Financial Reporting Standards and Domestic Banks and Financial
Institutions Act (2012) as specified in note 2 of these financial statements.
;fo~~~
Baker Tilly Hulse
Chartered Accountant
3rd April, 2014
Belize City,
Belize, c.A.
HERITAGE
Page 3
BANK LIMITED
STATEMENTS
OF FINANCIAL
POSITION
All amounts expressed in Belize Dollars
2013
Notes
2012
Assets:
Cash and balances with central bank
Treasury bills
Loans and advances
Less: specific loan loss reserve
Other assets
Investments
Bank premises and equipment
2, 3
2, 4
2, 5
2, 5
2,6
2, 7
2, 8
57,143,611
110,226,624
145,379,152
(16,480,057)
1,948,094
11,193,718
5,299,564
136,180,414
(18,638,276)
3,192,900
12,497,022
1,164,803
__~9i._~~i._q~f..____~~_~(.~?_~(.~~L
Total assets
Liabilities:
2, 9
Deposits
Due to other banks
Other liabilities
Contingent liabilities
2, 10
2, 11
2, 12
186,544,825
716,668
2,955,207
227,706,755
772,163
3,245,477
___~~2.,f..1?.!'?"Q9
__ ---~?-~'-~?~'-~~~-
Total liabilities
14,267,382
NET ASSETS
12,899,092
Equity:
Share capital
____
~sQ?~Q?~
__
----~~,-q~~,-q!~-
Share premium
_______
~~9.!2.Q9
__
_
General loan loss reserve
______
~_~?9.!f..Q~
__ ------~,-q~~,-~?~-
~~2.,_qgQ_
Retained earnings:
Statutory Reserves
Unappropriated (accumulated
deficit)
___{1g,~~?.!§'Q§1
Total
SHAREHOLDERS'
1,834,442
(21,281,347)
14,267,382
INTERESTS
~
Director
Dated:
Auditor's report page 1.
The notes on pages 8 to 21 form an integral part of these financial statements
845,020
(21,549,585)
__J?_q,_(g~,_~~~t
12,899,092
Page 4
I
STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED 31ST DECEMBER 2013 AND 2012
All amounts eXQressed in Belize Dollars
Notes
14
14
Interest income
Interest expense
Net interest income
Fee and commission
Fee and commission
income
expense
Net fee and commission
15
15
income
2013
2012
13,227,317
(4,448,101)
13,402,790
8,779,216
7,413,879
1,831,111
(677,697)
2,204,970
(820,379)
1,153,414
1,384,591
(5,988,911 )
Net trading income
16
1,529,658
1,227,956
Other operating income
17
984,014
809,600
12,446,302
10,836,026
OPERATING
INCOME
Provision for credit losses
18
(1,885,000)
(107,918)
Personnel expense
19
(3,212,629)
(3,096,412)
\ 20
(3,622,758)
(3,697,118)
3,725,915
3,934,578
3,725,915
3,934,578
(1,966,625)
(1,736,178)
1,759,290
2,198,400
0.0605
0.0755
Other operating expenses
NET INCOME BEFORE EXTRAORDINARY INCiME
AND TAXATION
EXTRAORDINARY
INCOME
NET INCOME AFTER EXTRAORDINARY
LESS:
BUSINESS TAX
INCOMb
121
NET INCOME AFTER TAXATION
Earnings per share
<,
HERITAGE
BANK LIMITED
STATEMENTS
Page 5
OF CHANGES IN EQUITY
2013 AND 2012
31ST DECEMBER
2012
2013
Notes
SHARE CAPITAL:
Common shares - issued and fuJly paid
29,100,000
of$1.00
par
Preferred shares - issued and fully paid
3,000,000 of $1.00 par
29,054,078
29,054,078
3,000,000
3,000,000
____
~_~LQ9~L~?~_..---~~!.Q§.~!.Q!-~-.
TOTAL
SHARE PREMIUM:
-----------------
________
~~.<~Lg9_~_. .
Premium on ordinary shares issued
GENERAL
~~_~!.g9_~_.
LOAN LOSS RESERVE:
951,661
1,059,579
110,630
At the beginning of the year
Provision for the year
107,918
______
~!.!!_qL~9_~_..
At the end of the year
!!.Q9_~!.~?~_.
The General loan loss reserve is maintained for unidentified future losses which are inherent in any
Under the Domestic Banks a~d Financial Institutions Act, 2012 the General loan
financial institution.
loss reserve must be equivalent to one percent oflal/loans
not adversely classified .
.R.t;!t\.!~~JL~~~.!'!IN.q~~_
Statutory reserves
At beginning of the year
845,020
696,682
Transfer from retained earnings
989,422
148,338
______
~L~~~L~~_. --------~~~!.Q?-q-.
At end of the year
Unappropriated
(retained deficit):
At beginning of the year
(21,549,585)
(22,051,475)
Net income for the year
1,759,290
2,198,400
Prior year adjustment
22
15,827
Transfer to specific reserves
(391,000)
Transfer to general reserves
(110,630)
Transfer to statutory reserves
(989,422)
Rounding
(1,564,000)
(148,338)
1
•.-~-.~~.-<
___
E~!.~~_~L~~lL.
__j~~!.~i~!.~?_~L
Total accumulated
deficit
TOTAL STOCKHOLDERS'
(19,446,905)
(20,704,565)
14,267,382
12,899,092
EQUITY
Page 6
I
STATEMENTS OF CJ\SH FLOWS
YEARS ENDED 31 ST DECEMBER 2013 AND 2012
All amounts eXQressed in Belize Dollars
2013
CASH FLOWS FROM OPERATING
2012
ACTJVITIES:
Interest received
Interest paid
Net fee and commission income
Net trading income
Other operating income
Cash paid for accounts payable, personnel
and operating expenses
Net (decrease) in demand deposits, savings accounts,
certificates of deposit and other
Increase I (decrease) in liabilities to other banks
(Decrease) in net drafts payable
Extraordinary income
Prior period adjustment
13,703,783
(4,789,499)
1,153,414
1,529,658
984,014
12,989,704
(7,830,820)
1,384,591
1,227,956
809,600
(12,863,257)
(8,752,763)
(41,161,930)
(55,495)
64,468,031
4,429
(109,071)
(3,043,558)
-
15,827
Net cash (used by) provided by operating activities
(41,608,383)
61,272,997
CASH FLOWS FROM INVESTING ACTIVITIES:
Net decrease in treasury bills
1,303,304
(4,472,459)
Investments redeemed
Purchase of property and equipment
Adjustments to property and equipment
(Increase) in customer loans
Net decrease I (increase) in other assets
Net increase I (decrease) in other liabilities
Net cash (used) in investing activities
CASH FLOWS FROM FINANCING
(9,198,738)
768,340
124,923
(11,474,630)
10,000,000
118,465
(135,815)
901
(10,245,689)
(1,125,515)
(378,295)
(1,765,948)
ACTIVITIES:
Proceeds from sale of shares
Net cash flow provided by financing activities
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS
(53,083,013)
59,507,049
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF YEAR
110,226,624
50,719,575
CASH AND CASH EQUIVALENTS
AT THE END OF YEAR
-57,143,611
110,226,624
- continues
HERITAGE
BANK LIMITED
STATEMENTS
Page 7
OF CASH FLOWS (CONTINUED)
YEARS ENDED 31ST DECEMBER 2013 AND 2012
2013
Reconciliation
2012
of net income to net cash
provided by operating activities:
Net income
1,759,290
2,198,400
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for probable credit losses
1,885,000
107,918
Bad debts written off from reserves
(4,434,219)
(762,996)
I
Depreciation
337,699
Disposal of fixed assets
442,186
4,167
Increase in accounts payable and
accrued expense
Increase I (decrease)
in interest receivable
(Decrease) in accrued interest payable
35,276
93,588
476,466
(341,398)
(413,086)
(1,841,909)
Net (decrease) I increase in demand deposits, savings accounts,
certificates
of deposit and other
(Decrease) I increase
(41,161,930)
in liabilities to other banks \
(Decrease) in net drafts payable
64,468,031
(55,495)
4,429
(109,071)
(3,043,558)
Prior year adjustment
15,827
Total adjustments
{43,}67,672)
59,074,597
Total cash (used by) provided by operating activities
(41,608,383)
61,272,997
HERITAGE
Page 8
BANK LIMITED
NOTES TO THE FINANCI'AL STATEMENTS
All amounts in the following notes are shown in Belize Dollars
1.
STATUS - ORGANIZATION
OF THE BANK
Heritage Bank Limited was incorporated as Alliance Bank of Belize Limited ("the Bank") in December
1999 as a limited liability company under the Laws of Belize Chapter 250 (Revised 2003). The Bank
was issued a banking license in November 2000 under the Domestic Banks and Financial Institutions Act
(DBFIA).
On 1st January 2010, Alliance Bank of Belize Limited legally changed its name to Heritage Bank
Umited. The Bank's parent also legally changed its' name from Provident Bank & Trust of Belize
Limited to Heritage International Bank & Trust Umited. Main offices and operating locations remain
the same.
The Bank's main office is located in Belize City. Heritage International Bank & Trust Limited is the
Bank's parent company with 94.09% ownership (2012 = 94.09%; 2011 = 94.09%).
The Bank is involved in retail and corporate banki'ng - consisting of private banking services,
investment accounts, debit facilities, current accounts, savings, deposits, overdrafts, investment
savings, credit cards, consumer loans, commercial loans, other credit facilities, mortgages and
foreign currency transactions.
At 31st December 2013, the bank had 8 branches and approximately
2.
STATEMENT
OF ACCOUNTING
105 employees.
POLICIES
These financial statements have been prepared in!accordance with International Financial Reporting
Standards (JFRS) adopted by the International Ac~ounting Standards Board and the Domestic Bank and
Financial Institution Act (2012).
Basis of preparation
The financial statements are presented in Belize dellars. They are prepared under the historical cost
convention and in accordance with International Firancial Reporting Standards with the exception of
income recognition and provisioning for doubtful l!nS, which complies with the Domestic Bank and
Financial Institutions Act (2012). The accounting
olicies set out below have been applied consistently
to all periods presented in these financial statemen s.
Subsidiaries
The Bank is a subsidiary of Heritage International Bank & Trust Limited, which controls 94.09% of the
issued ordinary share capital (2012 = 94.09%); and 80% of the issued preferred shares at 31 December.
Consolidated
financial statements
are prepared seRarately.
Cash and cash equivalents
Cash and cash equivalents comprise cash balancea and call deposits held with various financial
institutions. Balances held by the Central Bank of Belize, inclusive of the statutory deposit, are also
considered cash.
-continues
Page 9
NOTES TO THE FINANCIAL STATEMENTS
31ST DE:CE:MBE:R 2013 AND 2012
2.
STATEMENT
OF ACCOUNTING
POLICIES (CONTINUE:D)
Foreign currencies
The exchange rate for the US dollar is fixed at US $1.00 equals BZE $2.00. For all other currencies,
the Bank follows the practice of valuing its foreign exchange daily at the rates in force for that date.
The valuation is done using the mid-rate of the foreign currency to be valued.
resulting from valuations are recognized in the statement of income.
Gains or losses
Treasury Bills
Treasury Bills are Government of Belize Treasury Bills and Treasury Notes that are carried at
redeemable value which approximates market. Government of Belize securities are issued in primary
trading by the Central Bank of Belize. Treasury Bills are issued at a discount normally with ninety
days maturity. Interest income is recognized using the accrual interest method during the period to
maturity.
Loans and advances
Loans and advances are stated at principal outstanding, net of unearned interest. Interest income is
recorded on the accrual basis. All loans and advances are recognized when cash is advanced to
borrowers. As required by the Domestic Bank and Financial Institutions Act (2012), in the event that
either principal or interest is ninety days or more in arrears, and collection is considered doubtful, loans
and advances are classified to a non-accrual status and previously accrued but unpaid interest is charged
against current interest income.
Loan loss reserves
The specific loan loss reserve is charged to inc0"le in the year identified. The Specific Reserve is
maintained cover identified doubtful debts as specified by the Domestic Bank and Financial Institutions
act (2012). The General loan loss reserve is mai~tained for unidentified future losses which are inherent
in any finance facility and is funded through the a] propriations of retained earnings.
Under the Domestic Bank and Financial InstitutiO~S Act, the General loan loss reserve must be
equivalent to one percent of all loans not adverselv classified.
Other assets
Other assets consist of miscellaneous amounts re~eivable, prepaid expenses and utility deposits.
Other assets are recorded at the original transacti n price less provision for impairment. A provision
for impairment is established when there is objecti e evidence that the bank will be unable to
collect all amounts due.
Investments
Trading securities are either acquired for generatint
dealer's margin or are securities included in a portf
exists. Trading securities are recognized at cost Ie
disposed of or impaired, the related gains and loss
earned whilst holding trading securities is reported
reported as dividend income.
a profit from short-term fluctuations in price or
lio in which a pattern of short-term profit taking
s any impairment. When the securities are
s are recognized in trading income. Interest
s interest income. Dividends received are
-continues
HERITAGE
Page 10
BANK LIMITED
2.
STATEMENT
Investments
OF ACCOUNTING
POLICIES (CONTINUED)
(continued)
Investment securities are recognized at cost. Equity securities for which fair value cannot be
measured reliably, are recognized at cost less impairment
When the securities are disposed of or
impaired, the related accumulated fair value adjustments are included in the statement of comprehensive income as gains and losses from investment securities.
All purchases and sales of trading and investment securities are recognized at settlement date,
which is the date the bank completes the transaction.
Bank premises and equipment are carried at cost and are depreciated
at the following rates:
Buildings and improvements
Vehicles and equipment
Furniture and fixtures
using the straight line method
21/2%
10,20 & 25%
10%
Maintenance, repairs and minor renewals are charged against revenue in the year incurred; major
renewals and improvements are capitalized.
When property and equipment are disposed of by sale or scrapping, the cost and related accumulated
depreciation are removed from the accounts and bny resulting gain or loss is reflected in the statement
of comprehensive income.
I
Borrowings
Borrowings
Borrowings
are recognized initially at cost, being t~e issue proceeds net of transaction
are subsequently stated at amortized cost.
costs incurred.
Deposits
Interest expense is calculated daily and recorded ~n the accrual basis to a memorandum account
Earned interest is paid to the depositor against the accrued interest liability account semi-annually
for regular savings and at maturity for fixed term leposits.
Dividends
Dividends on shares are recognized in equity in thel period in which they are declared.
Interest income and expense
Interest income and expense for all interest bearing1·nstruments are recognized in the statement of
comprehensive income on the accrual basis using t e effective yield method based on the actual
purchase price. Interest income includes interest e rned on fixed income investments, trading
securities, accrued discount and premium on trea ury bills and other discounted instruments.
-continues
HERITAGE
Page 11
BANK LIMITED
2.
STATEMENT
OF ACCOUNTING
POLICIES (CONTINUED)
Interest income and expense (continued)
When loans become doubtful of collection, accrued and uncollected interest is charged off against
interest income. Interest income is thereafter recognized on a cash basis, when collected, until the
facility
is completely
Fee and commission
updated.
income
Fees and commissions are generally recognized on an accrual basis when the service has been
provided. Loan fees are recognized when cash is advanced to borrowers.
Leases
The Bank is a lessee.
Leases entered into by the Bank are operating leases. The total payments made under operating
leases are charged to the statement of comprehensive income on a straight-line basis over the period
of the lease.
When an operating lease is terminated before the\lease period has expired, any payment required to
be made to the lessor by way of penalty is recoqnized as an expense in the period in which the
termination takes place.
Acceptances
Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on customers. The
Bank expects most acceptances to be settled simultaneously with the reimbursement from the
customers. Acceptances are accounted for as offJbalance sheet transactions and are disclosed as
contingent liabilities and commitments.
FINANCIAL
RISK MANAGEMENT
By its nature the Bank's activities are principally rerted to the use of financial instruments. The Bank
accepts deposits from customers at fixed rates for arious periods and seeks to earn above average
interest margins by investing these funds in high qlality assets. The Bank seeks to increase these
margins by consolidating short-term funds and len ing for longer periods at higher rates whilst
maintaining sufficient liquidity to meet all claims th t may fall due.
The Bank also raises its interest margins by obtainlnq above average margins, net of provisions
through lending to retail borrowers.
Such exposures involve not only on-balance sheet loans and
advances, but also guarantees and letters of credit.
Credit risk
The Bank takes on exposure to credit risk which is 1e risk that a counterparty will be unable to pay
amounts in full when due. The Bank structures its edit risk by placing limits on the risk accepted in
relation to one borrower or group. This is monitore
on a revolving basis and subject to annual review.
Limits are also regulated by the Domestic Banks an Financial Institutions Act.
-continues
HERITAGE
Page 12
BANK LIMITED
All amounts in the following
2.
FINANCIAL
notes are shown in Belize Dollars
RISK MANAGEMENT
(CONTINUED)
Credit Risk (continued)
The Bank's risk management policies are designed to achieve a balance between risk and return and
minimize potential adverse effects of its' financial performance. The Bank therefore identifies and
analyzes these risks, designs internal controls to set appropriate limits, and to monitor these limits
through reliable and up to date information systems and reports.
Exposure to credit risk is managed through regular analysis of the borrowers ability to repay and by
changing limits when appropriate. Exposure is also managed in part by obtaining marketable
collateral and personal guarantees.
Credit Related Commitments
Guarantees and standby letters of credit, which represent irrevocable assurances that the Bank will
make payments in the event that a customer cannot meet its obligations to third parties, carry the
same risks as loans. Documentary and commercial letters of credit are written undertakings by the
Bank on behalf of a customer authorizing a third party to draw drafts on the Bank up to a stipulated
amount under specific terms and conditions.
Geographical
concentrations
of assets, liabilities and off-balance
As at 31st December 2013
Belize
USA
Antigua W.I.
Trinidad & Tobago
As at 31st December 2012
Belize
USA
Antigua W.I.
Trinidad & Tobago
sheet items
Total Assets
Total Liabilities
Credit
commitments
179,975,446
10,632,358
2,682,560
11,193,718
190,216,700
8,166,522
204,484,082
190,216,700
8,166,522
Total Assets
Total Liabilities
Credit
commitments
180,816,513
48,780,308
2,544,645
12,497,021
231,724,395
12,047,608
244,638,487
231,724,395
12,047,608
Belize is the home country of the Bank, this is therefore the main area of operation.
other countries are cash deposits and short-term investment instruments.
Amounts
held in
Market risk
Market risk for the Bank arise from open Positionsi'
which are exposed to general and specific market
limits on the amount of risk that may be accepted,
by the Board monthly.
interest rate, currency and equity products, all of
ovements. The Bank's Board of Directors sets
hich is monitored on a daily basis and reviewed
Interest rate risk
The Bank takes on interest rate risk in that it pays ilerest on deposits and borrowings and that
fluctuations in interest rates may affect its capacity t on-lend at competitive rates. The Bank
manages this risk by maintaining an adequate inter st rate spread between interest paid and interest
received.
- continues
HERITAGE
BANK LIMITED
Page 13
2.
FINANCIAL
RISK MANAGEMENT
(CONTINUED)
Liquidity risk
Liquidity risk is the risk that the Bank is unable to meet its payment obligations associated with its
financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence
may be the failure to meet obligations to repay depositors and fulfil commitments to lend.
The Bank's liquidity management
process includes:
• Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be
met. This includes replenishment of funds as they mature or are borrowed by customers. The
Group maintains an active presence in global money markets to enable this to happen;
• Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection
against any unforeseen interruption to cash flow;
• Monitoring
statement of financial position liquidity ratios against internal and regulatory requirements
• Managing the concentration
and profile of debt maturities.
Fraud risk
The Bank is exposed to fraud risks from customers as well as employees. The Bank seeks to
minimize these risks by internal controls, checks ahd balances as well as software controls aimed
at identifying irregular transactions.
Foreign currency risk
The Bank takes on exposure to the effects of fluctuations in the prevailing foreign currency exchange
rates on its financial position and cash flows. The Board sets limits on the level of exposure by
currency ana In aggregate Tor DOlO overruqnt ana mrra-cay positions, wrucn are rnonnoreo oany.
3.
CASH AND DUE FROM BANKS
Cash and due from banks are detailed as follows:
2013
2012
Cash:
Belize currency
Foreign currency
30,130,267
27,013,344
20,819,217
89,407,407
Total cash and due from banks
57,143,611
110,226,624
The Bank is required to maintain with the Central B~nk of Belize an aggregate of approved liquid
assets equal to 23% of the average deposit liabilitie of the bank. The cash reserve requirement
is 8.5% of average deposit liabilities. At 31st Dece ber 2013, deposits held with the Central Bank
amounted to $ 23,821,572; (2012 - $ 14,888,683).
HERITAGE
Page 14
BANK LIMITED
2013
4.
TREASURY
2012
BILLS
Government of Belize short-term
Treasury Bills
5.
LOANS AND ADVANCES
Loans and advances consist of the following:
Total loans
Less: specific loan loss reserve
145,379,152
(16,480,057)
136,180,414
Loans and advances - net
128,899,095
117,542,138
(18,638,276)
SPECIF-IC RESE.RVE
Specific loan loss reserve is charged to income in the year identified,
and maintained to cover identified doubtful debts as specified by the
Domestic Bank and Financial Institutions Act. Movements in the
specific reserve are as follows:
Balance at the beginning of the year
Provision for the year
Transfer from Retained Earnings/General
Write ofts
Reserv
Balance at the end of the year
18,638,276
1,885,000
391,000
(4,434,219)
17,837,272
16,480,057
18,638,276
1,564,000
(76~,9§62
DISTRIBUTION
The distribution
of loans by maturity and loan type lis as follows:
Loan t~
Commercial
Demand
Residential
Consumer
Staff
Overdraft
Credit Card
_~ 1..
~( Q~£~~l).t~~r_
~Q 1~_.
Due one year or
less
Total
68,037, 03
31,956, 55
17,504, 14
4,431, 00
2,582, 22
18,226, 86
2,639, 72
145,379,
52
Due after
onevear
through five
years
Due over five
years
1,760,521
4,985,067
158,365
1,210,683
48,309
18,226,986
2,639,572
17,288,906
7,809,942
1,567,548
2,536,850
693,747
48,988,376
19,161,646
15,778.401
684,067
1,840,166
29,029,503
29,896,993
86,452,656
- continues
HERITAGE
I
BANK LIMITED
Page 15
5.
LOANS AND ADVANCES
(Continued)
Due one year or
less
Total
Loan tYQg
I
Commercial
Demand
Residential
Consumer
Staff
Overdraft
Credit Card
55,634,079
37,863,822
14,793,413
5,214,587
2,890,911
17,247,755
2,535,847
136,180,414
31st December 2012
------------------_.
1,999,245
4,791,537
151,297
1,236,921
222,656
17,247,755
2,535,847
28,185,258
Due after
oneyear
through five
years
7,717,891
6,657,286
1,665,150
3,167,544
548,675
19,756,546
Due over five
years
45,916,943
26,414,999
12,976,966
810,022
2,119,580
88,238,510
2013
6.
2012
OTHER ASSETS
Other assets consist of the following:
Accrued interest
Accounts receivable
Interbank receivable
Miscellaneous
Prepaid expenses and deposits
7.
772,007
129,242
498,126
267,880
280,829
1,948,084
I
INVESTMENTS
Government
1,256,230
118,898
1,277,261
272,598
267,913
3,192,900
of Trinidad & Tobago Bonds
GORTT Zero Coupon Bond issued by the
Government the Republic of Trinidad and
Tobago to replace CLiCO FTDs.
11,193,718
12,497,022
\
8.
BANK PREMISES AND EQUIPMENT
consist of the folio
Land,
BUilding,Le
2013
COST
Cost at 31st December 2012
Additions
Disposals
Transfers I adjustments
hold
Improveme
!
Office and
se-
Computer
Equipment,
ts
Vehicle
1,506,;3
4,349,
9
(554,7
4)
5,301,
68
2,794,161
90,963
Furniture &
Fixtures
2,125,036
31,758
Total
6,425,700
4,472,460
(554,774)
2,885,124
2,156,794
10,343,386
- continues
HERITAGE
BANK LIMITED
Page 16
8.
BANK PREMISES AND EQUIPMENT
DEPRECIATION
Balance at 31st December 2012
Additions
Disposals
Net book value at
2012
COST
Additions
Disposals
(Continued)
1,053,907
121,270
2,555,257
112,913
1,651,733
103,516
5,260,897
337,699
(554,7742
(554,71~)
620,403
2,668,170
1,755,249
5,043,822
4,681,065
216,954
401,545
5,299,564
Leasehold
Improvements
1,495,y08
10,995
Office and
Computer
Equipment,
Vehicle
Furniture &
Fixtures
2,801,306
73,855
(81,000)
-
Total
2,074,972
50,965
(901 )
6,371,786
135,815
(81,000)
(901 )
-I
DEPRECIATION
Additions
Disposals
Net book value at
9.
DEPOSITS
Deposits consist of the following:
Demand
Savings
Time
1,506,503
-Ji
',053'k
926,JS4
2,794,161
2,125,036
6,425,700
2,467,090
165,000
(76,833)
1,S01,801
149,932
4,895,545
442,186
(76,833)
(1)
452, 96
I
-
-
(1)
-
2,555,257
1,651,733
5,260,897
238,904
473,303
1,164,803
2013
40,095,613
32,370,873
114,078,339
186,544,825
2012
89,184,596
23,149,S96
115,372,563
227,706,755
- continues
HERITAGE
Page 17
BANK LIMITED
9.
DEPOSITS (Continued)
2012
2013
The maturity distribution
of the deposits is as follows:
Within 3 months
4 to 6 months
7 to 12 months
Over 12 months
130,643,667
34,910,559
20,907,136
83,463
186,544,825
183,468,328
24,009,886
20,086,150
142,391
227,706,755
716,668
772,163
1,017,476
793,629
45,518
453,902
337,711
306,971
2,955,207
1,358,874
768,276
35,594
562,974
208,260
311,499
3,245,477
10. DUE TO OTHER BANKS
Due to other banks represents amounts
held in deposit accounts for other financial
institutions
11. OTHER LIABILITIES
Other liabilities consist of
the foJJowing:
Accrued interest on deposits
Accounts payable and accruals
Credit card liabilities
Drafts payable
Loan administration
Inter-bank liability
12. CONTINGENT
LIABILITIES
The Bank is a party to financial instruments with o~-balance sheet risks in the normal course of
business to meet the financial needs of its custom1rs. These financial instruments include
commitments to extend credit, standby letters of credit and financial guarantees.
Unused credit facilities
Loan commitments
Guarantees
6,771,373
1,376,149
19,000
8,166,522
8,345,259
3,675,299
27,050
12,047,608
13. FIDUCIARY ACTIVITY
The Bank manages and administers loans for the Sf,ial Security Board. These loans were issued by
the St. James National Building Society and sold to ocial Security Board. The Bank is responsible
for COllecting payments and submitting these paym nts to the Social Security Board and receives
fee income for this service.
At 31 st December 2011, 11 accounts were active d~ring the year. The value of the active portfolio was
$319,567 (2010 = $344,124; 2009 = $377,779).
- continues
"
HERITAGE
Page 18
BANK LIMITED
13. FIDUCIARY ACTIVITY
(Continued)
As of 11th July 2012, the Government of Belize, with the approval of the National Assembly paid off
the Social Security Board for all outstanding balances for the accounts being managed by Heritage Bank
Limited. As a result, the value of the portfolio at the end of the year is nil.
14. NET INTEREST INCOME
2013
2012
12,195,900
1,031,417
13,227,317
12,320,074
1,082,716
13,402,790
4,435,806
12,295
4,448,101
5,988,911
8,779,216
7,413,879
612,488
958,380
260,243
1,831,111
635,299
1,336,144
233,527
2,204,970
(677,697)
(820,379)
Interest income
Cash and short-term funds
Loans and advances
Other
Interest expense
Customer deposits
Banks
Net interest income
15. NET FEE AND COMMISSION
INCOME
Credit card fees and commission
Loan facilities fees and commission
Other
Fees and Commission
Expense
Net Fees and Commissions
16. NET TRADING
5,988,911
Income
1,153,414
1,384,591
1,529,658
1,227,956
1,529,658
1,227,956
INCOME
Net trading income consists of the following:
Foreign exchange gains
Foreign exchange losses
Net trading income
Foreign exchange trading income is the result of tranjslated foreign currency assets and liabilities.
"
HERIJAGE
Page 19
BANK LIMITED
2013
17. OTHER OPERATING
2012
INCOME
Other operating income consists of the following:
Credit card miscellaneous
Gain on disposals
Service Charges
Insurance administration
Other
212,119
464,299
185,415
122,181
984,014
89,246
13,333
442,642
167,382
96,997
809,600
18. PROVISIONS
Specific reserve (see note 5)
General reserve (Page 5)
1,885,000
1,885,000
107,918
107,918
Under the Domestic Banks and Financial Institutions Act (2012), banks must maintain a specific reserve
to cover identified classified debts and a general loan loss reserve that must equal a minimum of 1% of
loans not adversely classified.
19. PERSONNEL
EXPENSE
Personnel expense consists of the following:
Directors fees and expenses
Insurance and pension
Salaries and remuneration
Training
Traveling, subsistence and accomodation
Other
1,339
235,096
2,825,100
14,803
81,399
54,892
3,212,629
39
219,893
2,699,571
6,350
60,758
109,801
3,096,412
·
HERITAGE
BANK LIMITED
Page 20
2013
20. OTHER OPERATING
2012
EXPENSE
Other operating expense consists of the following:
Advertising
Bank charges
Depreciation
Donations
Insurance
Legal and professional fees
License - bank
License - other
Other losses
Office supplies and expenses
Rental expense
Repairs and maintenance
Property taxes and other fees
Security and courier
Telephone, communication and utilities
Postage and delivery
Miscellaneous
I
119,210
92,736
337,699
5,810
80,319
89,395
112,985
112,270
93,396
442,186
7,061
88,936
86,586
108,137
7,642
379,584
487,735
438,040
1,700
684,078
728,382
53,450
3,993
3,622,758
42,812
342,434
571,398
350,271
666,670
720,942
56,837
7,182
3,697,118
1,966,625
1,736,178
21. TAXATION
Business tax
Effective 1st July 1998, an amendment to the Incore Tax Act eliminated taxation based on profits
and replaced this with a method of taxation of gro[ revenue, Business Tax, payable quarterly. Banks
and financial institutions pay Business Tax at 15% of gross revenue, except interest, which is
calculated on interest income net of interest expen e.
22. PRIOR PERIOD ADJUSTMENTS
Adjustment
Adjustment
Adjustment
to interest receivable
to interest payable
to property plant and equipment
16,728
{901 )
15,827
HERITAGE
BANK LIMITED
Page 21
23. RELATED PARTY TRANSACTIONS
The Bank is a subsidiary of Heritage International Bank & Trust Limited, formerly Provident Bank &
Trust of Belize Limited. These financial statements are the separate financial statements of the Bank.
Consolidated financial statements are prepared separately.
A number of banking transactions were conducted with related parties, directors and shareholders
during the year in the normal course of business. These include loans, deposits and other
transaction. The balances at the year are as follows:
2013
Cash
- Heritage International Bank & Trust Limited (parent)
- Antigua Overseas Bank
Loans and overdrafts receivable
- Employee loans
- Aquarius Limited
- Heritage Real Estate Investment Limited
Deposit liabilities
- Aquarius Limited
- Director and director related parties
- Heritage International Bank & Trust Limited (parent)
Income earned
- Heritage International Bank & Trust Limited (psrent)
- Antigua Overseas Bank - interest
- Directors and director related parties - interest
Employee loans - interest
- Aquarius Limited - bank charges
I
2012
13,124,364
2,682,560
37,755,542
2,582,222
2,890,912
4,792
16,718
12,985
1,641,450
296,442
18,523
2,544,645
1,248,737
254,032
832,802
137,146
873,044
130,558
238,505
104
695
270,973
266
544
7,200
116,400
46,186
7,200
116,400
73,790
Expenses paid
- Aquarius Limited - rent
- Heritage International Bank & Trust Limited (patent) - rental
- Directors and director related parties - interest

2013 and 2012 - Heritage Bank

Transcription

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