Slide 1: Investor pre-close briefing
Investor pre pre-close close briefing 19 September 2014 1
Slide 2: Proviso
Proviso • Please note that matters discussed in today’s presentation may contain forward lookingg statements which are subject j to various risks and uncertainties and other factors, including, but not limited to: ‒ the further development of standards and interpretations under IFRS applicable to pa
Slide 3: Operational review
Out of the Ordinary® & Investec Operational review
Slide 4: Proviso and basis of presentation for operational review
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 Aug 2014 and compare 1H2015 vs 1H2014 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted opera
Slide 5: Overview of the six months to 30 Sep 2014
Overview of the six months to 30 Sep 2014 • Over the past year we have focused on simplifying and reshaping our specialist banking business with a view to improving returns and have successfully restructured and/or d/ soldld certain t i bbusinesses i • Sale of the Australian Professional Finance and
Slide 6: Overview of the six months to 30 Sep 2014
Overview of the six months to 30 Sep 2014 • The Wealth & Investment division’s results are expected to increase substantially and Asset Management is expected to report results ahead of the prior year. Both divisions have benefited from higher levels of average funds under management supported by ne
Slide 7: Overview of the six months to 30 Sep 2014
Overview of the six months to 30 Sep 2014 • Overall group results have been negatively impacted by the depreciation of the average Rand: Pounds Sterling exchange rate of approximately 19% over the period • Adjusted operating profit* is expected to be ahead of the prior year in Pounds Sterling; a sub
Slide 8: Overview of the six months to 30 Sep 2014
Overview of the six months to 30 Sep 2014 • For the period 31 Mar 2014 to 31 Aug 2014: – Third party assets under management increased 9% to £119.6bn – Customer accounts (deposits): o decreased 3% to £21.8bn o Adjusting for the sale of IBAL – an increase of 4% – C Core lloans and d advances: d o dec
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity and funding Cash and near cash • We have continued to diversify and lengthen our funding sources £'mn 10,000 Average • The cost of funds has declined in our 8,000 UK business and remained relatively 6,000 , stable in South Africa 4,000 • Advances as a percentage of
Slide 10: Impairment trends
Impairment trends • The total income statement Impairment analysis impairment charge is expected to be approximately 12% lower than the 160 £’mn prior year 140 120 • South Africa has seen a normalisation 100 in trend trend, whilst impairments on the UK 80 legacy portfolio remain elevated 60 40 • We
Slide 11: Divisional review
Out of the Ordinary® & Investec Divisional review 11
Slide 12: Asset Management
Asset Management • Competitive long-term Assets under management: investment performance Since 31 Mar 2014: up 9% to £74.0bn • Net flows exceeded £2.5bn £’bn to end of August 2014 80 70 • Financial performance 60 50 should be ahead of 1H2014 40 30 20 10 0 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 13: Wealth & Investment
Wealth & Investment • Performing well ahead of the Funds under management: prior year Since 31 Mar 2014: up 9% to £45.2bn ‒ Higher average funds under management 50 £’bn ‒ Net inflows of £0.8bn to 45 40 end of A Aug g 2014 35 30 • Operating margins continue 25 20 to improve 15 10 • Expansion of UK b
Slide 14: Specialist Banking
Specialist Banking • The Specialist Bank is performing ahead of the prior year Net interest margin Investment and trading income • Loan growth of 7% • Sound performance from the South African and • Relatively stable lending margins UK unlisted investment portfolios, partially • Cost of funds has red
Slide 15: Additional aspects
Out of the Ordinary® & Investec Additional aspects 15
Slide 16: Other information
Other information • Effective tax rate: expected to be approximately 19% - 20% • Net gain on sale of subsidiaries: £Nil • Goodwill write-offs: £45mn • Tax expense on non-operational items: £33mn • Net non-controlling g interests of approximately pp y £11mn (p (profits attributable) relating to the A
Slide 17: Conclusion
Out of the Ordinary® & Investec Conclusion 17
Slide 18: Conclusion
Conclusion • We have now completed the bulk of the restructuring and reshaping of the group. • This significantly simplifies our day to day operational activities and strengthens our financial capability. • Whilst there are still some legacy assets remaining, the actions we have taken to simplify ou
Slide 19: Investor pre-close briefing
Investec pre pre-close close briefing 19 September 2014 19
Slide 20: Contact details
Contact details For further information please refer to the Investor Relations section of www.investec.com Or contact the Investor Relations team: • Telephone: – UK: +44 (0) 207 597 5546 – SA: +27 (0) 11 286 7070 • E-mail: investorrelations@investec.com 20
Slide 21: Appendices
Out of the Ordinary® & Investec Appendices 21
Slide 22: Operating environment
Operating environment 31 Aug 31 Mar 30 Sep % move since 2014 2014 2013 Mar 2014 JSE ALSI 50,959 , 47,771 , 44,032 , 6.7% FTSE ALSI 3,640 3,556 3,444 2.4% Australian All Ord 5,625 5,403 5,218 4.1% SA Prime 9.25% 9.00% 8.50% 0.25% UK Clearing Banks 0.50% 0.50% 0.50% - RBA cash rate target 2.50% 2.50%
Slide 23: Adjusted operating profit: year ended Mar 2014
Adjusted* operating profit: For the year ended 31 Mar 2014 £’000 UK & Southern Australia Total Europe Africa group Asset Management 67,585 76,234 - 143,819 Wealth & Investment 46,065 20,034 - 66,099 Specialist Banking 54,602 201,153 (13,856) 241,899 Total group 168,252 297,421 (13,856) 451,817 Non-c
Slide 24: Adjusted operating profit: six months ended Sep 2013
Adjusted* operating profit: For the six months ended 30 Sep 2013 £’000 UK & Southern Australia Total Europe p Africa group g p Asset Management 33,446 38,494 - 71,940 Wealth & Investment 20,690 10,151 - 30,841 Specialist Banking 26,881 107,081 (13,925) 120,037 Total group 81,017 155,726 (13,925) 222
Slide 25: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2014 2014 2013 2013 YTD vs Mar 2014 UK and international 47,601 42,006 40,266 41,569 13.3% - Mutual funds 17,578 15,386 15,541 17,004 14.2% - Segregated mandates 30,023 26,620 24,725 24,565 12.8% South
Slide 26: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2014 2014 2013 2013 YTD vs Mar 2014 Discretionary 52,867 46,961 44,979 36,352 12.6% Non-discretionary 228,414 208,959 195,250 181,668 9.3% Total 281,281 , 255,920 , 240,229 , 218,020 , 9.9% £’milli
Slide 27: Investec Wealth & Investment Non-SA: Funds under management
Investec Wealth & Investment Non-SA: Funds under management £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2014 2014 2013 2013 YTD vs Mar 2014 Total IWI and Europe - Discretionary 20,580 18,889 17,149 16,806 9.0% - Non-discretionary and other 8,735 8,061 8,179 7,927 8.4% Total 29,315 26,950 25,328 2
Slide 28: Total group core loans
Total group core loans £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2014 2014 2013 2013 YTD vs Mar 2014 UK and Europe 7,127 6,492 6,235 6,045 9.8% Southern Africa 9,442 8,935 9,227 10,165 5.7% Australia 50* 1,730 1,929 2,205 -97.1% Total core loans 16,619 17,157 17,391 18,415 -3.1% Home currency y
Slide 29: Total group customer deposits
Total group customer deposits £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2014 2014 2013 2013 YTD vs Mar 2014 UK and Europe 9,826 9,407 9,309 9,561 4.5% Southern Africa 12,006 11,671 12,312 13,278 2.9% Australia -* 1,532 1,610 1,693 - Total deposits 21,832 22,610 23,231 24,532 -3.4% Home currency