Investec plc · LSE:INVP
Investec — FY2016 Earnings Presentation
36 slides from Investec's earnings presentation, May 2016
Slide 1: Results Presentation for the year to 31 March 2016
RESULTS PRESENTATION For the year to 31 March 2016
Slide 2: Highlights for the year
Unless otherwise stated, all information on this slide relates to the ongoing business Highlights for the year Enhanced our client We deepened our core franchise and grew the client base offering Decent levels of We experienced strong loan and deposit growth across our specialisations activity S
Slide 3: As a result …
Unless otherwise stated, all information on this slide relates to the ongoing business As a result … Statutory operating profit showed steady growth % change on Statutory results showed steady % growth, despite average Rand Mar-16 Mar-15 neutral currency change depreciation of 16.3% basis Snapshot
Slide 4: Difficult operating environment
Unless otherwise stated, all information on this slide relates to the ongoing business Difficult operating environment Results impacted by macro uncertainty and volatility 140 Closing rate Average rate % change % change 130 Since Since Since Since 120 Mar-15 Sep-15 Mar-15 Sep-15 Exchange Rebased to
Slide 5: Diversified business model
Unless otherwise stated, all information on this slide relates to the ongoing business Diversified business model Operating profit* % contribution to group by geography Increased contribution from UK 100% and Other businesses 80% UK and Other Geographic — Combined UK and Other business up 60% dive
Slide 6: Continued growth in key earnings drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Continued growth in key earnings drivers £’bn Third party assets under 140 management of £121.7bn: 120 Asset Management Third party 100 — Up 3.8% on a currency neutral basis assets under 80 Wealth & Investment m
Slide 7: Supporting growth in operating income
Unless otherwise stated, all information on this slide relates to the ongoing business Supporting growth in operating income Series 1 £'mn 2200 Total operating income up 2.5% Trading income 2000 — Net interest income up 6.1% — Net fee and commission income 1800 Investment income down 2.9% 1600 — I
Slide 8: Fixed costs marginally up
Unless otherwise stated, all information on this slide relates to the ongoing business Fixed costs marginally up Cost to income down to 65.8% from 66.5% last year £’mn 2 500 Operating income increased 2.5% to £1,935mn 2 000 Operating income Jaws ratio for 1 500 Operating costs were up 1.4% to th
Slide 9: Total impairments continued to decline
Unless otherwise stated, all information on this slide relates to the ongoing business Total impairments continued to decline £’mn Total impairments on loans and 350 advances decreased to £109.5mn (2015: £128.4mn) 300 250 Total impairment 200 charge (including 150 Legacy and Sales* legacy) by geog
Slide 10: Resulting in a solid group performance
Unless otherwise stated, all information on this slide relates to the ongoing business Resulting in a solid group performance % change currency neutral POUND EARNINGS Mar-16 Mar-15 % change basis Operating profit* before tax (£’mn) 583.9 580.7 0.6% 9.9% Attributable earnings**^ (£’mn) 423.1 409.9 3.
Slide 11: Progress made on our financial targets
Unless otherwise stated, all information on this slide relates to the ongoing business Progress made on our financial targets Ongoing Statutory Target Mar-16 Mar-15 Mar-16 Mar-15 Summary of ROE (post tax) 12%-16% over a rolling 5-yr period 13.9% 13.8% 11.5% 10.6% financial Adjusted* EPS growth Targe
Slide 12: Stable capital position
Unless otherwise stated, all information on this slide relates to the ongoing business Stable capital position As at 31 March 2016 Investec Bank Investec Bank 14.6% 11.0% Limited Limited Capital Investec Limited 14.0% As Tier 1 Investec Limited 10.7% reported As reported adequacy Investec Bank plc 1
Slide 13: Capital impacted by strong growth in credit risk-weighted assets
Unless otherwise stated, all information on this slide relates to the ongoing business Capital impacted by strong growth in credit risk-weighted assets R’bn Core loans up 19.7% (R36bn) to R218bn 60 Up R6bn Up R15bn Up R12bn Sound risk metrics: 50 Up R3bn — Credit loss ratio: 0.26% 40 Flat — Net
Slide 14: Business review
Business review o Investec
Slide 15: Asset Management - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Asset Management - overview After 25 successful years, momentum remains positive £’mn 160 Operating profit decline 120 Earnings impacted by market Operating Operating profit declines and emerging market 80 9.5
Slide 16: Asset Management – strategic review
Unless otherwise stated, all information on this slide relates to the ongoing business Asset Management – strategic review Focus on clients, people and long-term growth Strategic priorities Independent recognition Clients will always come first Professional Pensions Investment Awards: Scale Mult
Slide 17: Asset Management – outlook and opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Asset Management – outlook and opportunities AUM Exposure by Net Flows in FY2016 Positive momentum but strategically Asset Exposure* £2 267 mn exposed to emerging markets £1 457 mn Cautious on the outlook for
Slide 18: Wealth & Investment - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment - overview Solid overall performance £’mn Total operating profit up 8.8% 120 Strong performance from SA, up 19.2% Operating 80 Southern Africa in Rands due to increased levels of client tradi
Slide 19: Wealth & Investment – strategic review
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment – strategic review Investing for long-term sustainability Strategic priorities Independent recognition SA UK and other Continue to increase annuity revenue Continue to develop our online pl
Slide 20: Wealth & Investment – outlook and opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment – outlook and opportunities Outlook Opportunities SA environment has proved challenging with anaemic GPD growth Servicing our clients is fundamental to this business forecast and political
Slide 21: Specialist Banking - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking - overview Stable performance £’mn Operating profit up 4.3% 500 Good performance from SA up 12.2% 400 Southern Africa Operating in Rands 300 Strong performance from UK up profit* 200 UK and
Slide 22: Specialist Banking: reducing UK legacy business exposures
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking Continued to reduce the UK Legacy Business exposures £'mn Mar-16 Mar-15 The legacy portfolio has continued to be Total income 4.7 (2.6) actively managed down to £583mn from £696mn (Mar-15) Tot
Slide 23: Specialist Banking – positioning (UK and Other)
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – positioning Specialist Bank UK and Other Ongoing £'mn 700 Other operating income Positioning 550 Customer flow trading income Domestically relevant and internationally Analysis of 400 networ
Slide 24: Specialist Banking – strategy and outlook (UK)
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – strategy and outlook Specialist Bank UK and Other Ongoing Strategic priorities and opportunities Independent recognition Opportunity to build out the client franchise businesses in the UK th
Slide 25: Specialist Banking – positioning (SA)
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – positioning Specialist Bank SA Ongoing R'mn 15 Other operating Positioning income 12 Analysis of Customer flow trading income We have a high quality specialist banking solution income 9 to c
Slide 26: Specialist Banking – strategy and outlook (SA)
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – strategy and outlook Specialist Bank SA Ongoing Strategic priorities and opportunities Independent recognition We have a resilient business model and look to benefit from the opportunities i
Slide 27: Took advantage of investment opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Took advantage of investment opportunities Created Investec Equity Partners Summary Financial info In South Africa a new investment vehicle, Investec Equity Partners (IEP), has IEP’s financial year end is been
Slide 28: Balanced business model: capital light and capital intensive
Unless otherwise stated, all information on this slide relates to the ongoing business The result is that we maintained a balanced business model Balanced between capital light and capital intensive activities £’mn 1 200 Third party assets and Net interest, investment advisory 1 000 and trading inco
Slide 29: Strategic review and focus for 2017
Strategic review and focus for 2017 29
Slide 30: Strategic review of 2016
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic review of 2016 Objective Review Comment From a business perspective we focused on growth Operating profit up 9.9% on currency neutral basis — Focus on investment performance in the Asset Management bus
Slide 31: Key strategic focus for 2017
Unless otherwise stated, all information on this slide relates to the ongoing business Key strategic focus for 2017 From a business perspective we continue with our strategic priorities Over and above this, we have a very deliberate and focused CLIENT STRATEGY — Part of this is the Digital Strat
Slide 32: Integrated client strategy
Unless otherwise stated, all information on this slide relates to the ongoing business Integrated client strategy Natural linkages between private client and corporate banking businesses Corporate Private Banking Wealth & Investments Growth and creation of wealth Management and preservation of wealt
Slide 33: Integrated client strategy: digitization
Unless otherwise stated, all information on this slide relates to the ongoing business Integrated client strategy The digitization strategy integrates services across business and geography Focused on collaborating, merging and aligning to create one digital solution for clients 2014 2015 2016 Wit
Slide 34: Closing
Closing o Investec
Slide 35: Summary
Unless otherwise stated, all information on this slide relates to the ongoing business Summary We have strong businesses and are well positioned for sustained growth We are leveraging our unique client profile to provide the best and most integrated solution supported by our comprehensive digita
Slide 36: Outlook
Unless otherwise stated, all information on this slide relates to the ongoing business Outlook We are positioned to maintain sustainable growth in our principal markets as the businesses develop with a strong client and operational focus The macro environment remains volatile due to uncertainty