Investec Plc · LSE:INVP
Investec — Corporate Update (September 2008)
19 slides from Investec's corporate update, Sep 18, 2008
Slide 1: Investor pre-close briefing
Investor pre-close briefing 18 September 2008 Proviso • Please note that matters discussed in today’s presentation may contain forward looking statements which are subject to various risks and uncertainties and other factors, including, but not limited to: – the further development of standards and
Slide 2: Operational review
Operational review • Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 August 2008 (i.e. 1H09) and compare1H09 vs 1H08 • Investec will release its results for the six months to 30 September 2008 on 13 November 2008 Page 2
Slide 3: Difficult operating environment continues; Stable and consistent performance
Difficult operating environment continues 31 Aug 31 Mar 30 Sep % move since 2008 2008 2007 Mar 2008 JSE ALSI 27,702 29,588 29,959 (6.4%) FTSE ALSI 2,869 2,927 3,317 (2.0%) Australian All Ord 5,216 5,410 6,581 (3.6%) SA Prime 15.50% 14.50% 13.50% 1.00% UK Clearing Banks 5.00% 5.25% 5.75% (0.25%) RBA
Slide 4: Divisional review: Private Banking
Divisional review Private Banking • Higher average advances Loan portfolio*: ▲16.0% to £10.3 bn support good growth in net £'bn 12 interest income 10 • Majority of specialisations 8 continue to perform well in 6 South Africa 4 2 • Lower levels of activity in UK 0 and Australia 2001 2003 2005 2007 Au
Slide 5: Private Client Portfolio Management and Stockbroking; Capital Markets
Private Client Portfolio Management and Stockbroking South Africa Funds under management*: ▲5.3% to £21 bn • Decreased market volumes £'bn and reduced market value of 25 portfolios in home currency 20 • Weaker performance from 15 alternative products 10 5 0 2001 2003 2005 2007 Aug- 08 Discretionary
Slide 6: Kensington; Investment Banking
Kensington • Stable performance from Kensington – included for full 6 months • Headcount has been reduced significantly • Bad debt provision is based on a house price decline assumption of circa -35% i.e. 2008: -15%, 2009: -10%, and an extra -10% haircut to the price to reflect forced sale discount
Slide 7: Asset Management; Property Activities
Asset Management • Earnings growth under Assets under management*: ▲14% to pressure from tough mutual £32.8 bn £'bn fund environment 35 30 • Shift in fund mix to institutional 25 continues 20 15 • Strong net inflows drives 10 increase in assets under 5 management 0 2001 2003 2005 2007 Aug- 08 • Envi
Slide 8: Additional aspects
Other Activities • Central Funding: – Strong performance in South Africa driven by higher rates and increased cash holdings • Central Costs: – Marginally up on previous year Additional aspects Page 8
Slide 9: Other information; Capital
Other information • Effective tax rate: expected to be 25% - 26% • Weighted number of shares in issue for the 6 months to 30 September 2008 expected to be approximately 629 mn Capital • We have capital in excess of regulatory requirements Expected capital Expected capital adequacy ratios adequacy ra
Slide 10: Liquidity management; Asset quality
Liquidity management • Continue to focus on maintaining a stock of readily available, high quality liquid assets in excess of regulatory requirements • As at 15 September 2008 our cash and near cash around the world was: –Southern Africa: R51.8 bn –UK and Europe: £1.9 bn –Australia: A$ 1.0 bn Asset
Slide 11: Conclusion – our business model
Conclusion . Conclusion – our business model Managed loan growth Build non-lending revenue Manage costs Price risk appropriately Take advantage of opportunities Build customer deposits Third party assets Proprietary risk and advisory (Expected analysis capital of operating income*) Growth in net fee
Slide 12: Conclusion; Appendices
Conclusion • Conditions remain uncertain and markets volatile • Current environment is not conducive to growth • Senior management maintains a “hands-on” culture and our focus remains on: – Building a diversified and balanced portfolio of businesses – Strict management of risk and liquidity at a sen
Slide 13: Normalised operating profit before tax, goodwill and non-operating items
Normalised** operating profit before tax, goodwill and non-operating items: for the six months ended 30 September 2007 Southern UK & Australia Other Normalised Minorities** As £’000 Africa Europe total reported Private Banking 22,878 51,778 11,038 - 85,694 - 85,694 Private Client Portfolio 8,369 5,9
Slide 14: Private Banking: retail deposits; funds under advice
Private Banking: retail deposits 31 Aug 31 Mar 30 Sep 31 Mar % Change £'million 2008 2008 2007 2007 YTD vs Mar 08 UK and Europe 3,858 3,961 4,023 3,439 -2.6% South Africa 2,894 2,219 2,269 1,851 30.4% Australia 420 427 378 270 -1.6% Total deposits 7,172 6,607 6,670 5,560 8.5% 31 Aug 31 Mar 30 Sep 31
Slide 15: Capital Markets: loans and advances; Kensington: statistics
Capital Markets: loans and advances 31 Aug 31 Mar 30 Sep 31 Mar % Change £'million 2008 2008 2007 2007 YTD vs Mar 08 UK and Europe 2,076 1,997 2,034 1,536 4.0% South Africa 2,074 1,658 1,540 1,428 25.1% Australia 145 142 171 133 2.2% Total core loans 4,295 3,797 3,745 3,097 13.1% 31 Aug 31 Mar 30 Se
Slide 16: SA Private Client Securities FUM; Investec Asset Management AUM
SA Private Client Securities: funds under management 31 Aug 31 Mar 30 Sep 31 Mar % Change R'million 2008 2008 2007 2007 YTD vs Mar 08 Discretionary 20,465 21,407 19,764 18,419 -4.4% Non-discretionary 92,017 91,338 92,785 87,177 0.7% Total 112,482 112,745 112,549 105,596 -0.2% Net inflows at cost ove
Slide 17: Investec Asset Management: UK and global investment performance
Investec Asset Management: UK and global retail investment performance One year Three years 4th Quartile 1st Quartile 1st Quartile 16.7% 19.0% 22.0% 4th Quartile 34.0% 3rd Quartile 23.8% 2nd Quartile 20.0% 2nd Quartile 3rd Quartile 40.5% 24.0% Performance to 31 August 2008, excludes cash, cash plus
Slide 18: Investec Asset Management: SA investment performance
Investec Asset Management: SA retail investment performance One year Three years 3rd Quartile 3rd Quartile 11.8% 16.7% 1st Quartile 1st Quartile 52.9% 2nd Quartile 55.5% 27.8% 2nd Quartile 35.3% Performance to 31 August 2008. Source: Calculated from Standard & Poors, Datastream data. Investec Asset
Slide 19: Contact details
Contact details For further information please refer to the Investor Relations website: www.investec.com/grouplinks/investorrelations Or contact the Investor Relations team: • Telephone: – UK: +44 (0) 207 597 5546 – SA: +27 (0) 11 286 7070 • E-mail: investorrelations@investec.com Page 19