Investec Plc · LSE:INVP
Investec — Investor Presentation (September 2011)
18 slides from Investec's investor presentation, Sep 15, 2011
Slide 1: Investor pre-close briefing
Investor pre-close b i fi briefing 15 September 2011 Proviso • Please note that matters discussed in today’s presentation may contain forward looking statements which are subject to various risks and uncertainties t i ti and d other th ffactors, t i l di including, b butt nott lilimited it d tto: –
Slide 2: Operational review
Operational p review • Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 August 2011 and compare 1H2012 vs 1H2011 • p References to operating gp profit relate to normalised* operating p gpprofit. Trends within the divisiona
Slide 3: Overview of the six months ending 30 Sep 2011
Overview of the six months ending 30 Sep 2011 • Operating conditions have been more difficult than originally anticipated • The Asset Th A Management M anddWWealth lhM Management b businesses i h have continued to perform well as a result of increased average funds under management and net inflows •
Slide 4: Cash balances remain strong; Healthy capital ratios
Cash balances remain strong • Continue to focus on: Cash and near cash – diversifying funding sources – limiting concentration risk £'mn 11,000 – reduced reliance on wholesale funding 10,000 – building our retail franchise 9,000 Average – reducing cost of liabilities 8,000 7 000 7,000 6,000 • Core a
Slide 5: Impairment trends
Impairment trends • Impairments on core loans are expected Defaults and core loans to be lower than the prior year £'bn £ bn 5% 20 • We expect the credit loss ratio on total 18 average loans and advances to be 4% 16 approximately i t l 0 0.90% 90% (M(Mar 2011 2011: 11.27%) 27%) 14 3% 12 10 • Start i
Slide 6: Overview of expected year on year performance
Overview of expected year on year* performance • Recurring income as a percentage of total operating income is expected to be approximately 66% (2010: 63%) • We expect to report a satisfactory increase in total operating income: – An increase in net interest income – A significant g increase in net
Slide 7: Wealth & Investment; Property Activities
Wealth & Investment • Performing ahead of the prior year Funds under management: – Higher ave funds under Since 31 Mar 2011: down 6% to £27.6bn managementt £'bn 30 – Net inflows of c.£550mn – 100% of Rensburg Sheppards plc included for a full six months in 20 1H2012 10 0 2004 2006 2008 2010 Aug 11 A
Slide 8: Private Banking; Investment Banking
Private Banking • Overall return to profitability Loans: since 31 Mar 2011: flat at £13.3bn – There has been some uptick in activity Deposits: since 31 Mar 2011: down 2% to £12.2bn levels £'bn 14 – Moderate increase in impairments 12 relative to the comparative period period, but 10 significantly lo
Slide 9: Capital Markets; Other Activities
Capital Markets • Satisfactory performance ahead of Loans: since 31 Mar 2011: flat at £4.8bn the prior year £'bn • Strong performance from the South African business and a solid 4 performance from UK and Australia 2 0 2004 2006 2008 2010 Aug-11 Trends reflected in graph are for the year-ended 31 Mar
Slide 10: Additional aspects: Other information
Additional aspects p Other information • Effective tax rate: expected to be between 19 - 20% • Weighted number of shares in issue for the six months ending 30 Sep 2011 expected to be approximately 792mn 20
Slide 11: Independent Commission on Banking; Recommended Share offer
Other information - Independent Commission on Banking (“ICB”) • On 12 September the ICB published its recommendations for regulatory change to the UK banking industry, for assessment by the UK government • The ICB has recommended that the recommendations are implemented p by y 2019 • The group is st
Slide 12: Conclusion
Conclusion Conclusion • Operating conditions are difficult as the global geopolitical landscape remains uncertain • The group’s operational performance remains stable underpinned by a solid recurring income base 24
Slide 13: Appendices
Investor pre-close b i fi briefing 15 September 2011 Appendices pp
Slide 14: Operating environment; Normalised operating profit
Operating environment % move 31 Aug 2011 31 Mar 2011 30 Sep 2010 since Mar 2011 JSE ALSI 30,365 32,204 29,456 (5.7%) FTSE ALSI 2,734 3,068 2,868 (10.9%) Australian All Ord 4,341 4,929 4,637 (11.9%) SA Prime 9.00% 9.00% 9.50% - UK Clearing Banks 0.50% 0.50% 0.50% - RBA cash rate target 4.75% 4.75% 4.
Slide 15: Normalised operating profit; Asset Management assets under management
Normalised* operating profit: For the six months ended 30 September 2010 UK & Europe Southern Australia Total group Africa £’000 Asset Management 18,867 30,046 - 48,913 Wealth & Investment 8,996 7,346 - 16,342 P Property t Activities A ti iti (443) 14 540 14,540 2 311 2,311 16 408 16,408 Private Ban
Slide 16: Wealth & Investment funds under management
Wealth & Investment SA: funds under management % Change 31 Aug 31 Mar 30 Sep 31 Mar YTD vs R'million 2011 2011 2010 2010 Mar 2011 Discretionary 23,033 22,585 20,811 19,726 2.0% y Non-discretionary* 127,523 , 136,216 , 121,045 , 114,178 , ((6.4%)) Total 150,556 158,801 141,856 133,904 (5.2%) Net infl
Slide 17: Private Banking: loans and advances; retail deposits
Private Banking: loans and advances % Change 31 Aug 31 Mar 30 Sep 31 Mar YTD vs £'million 2011 2011 2010 2010 Mar 2011 UK and Europe 3,490 3,378 3,363 3,585 3.3% South Africa 8,023 8,122 7,905 7,696 (1.2%) Australia 1,831 1,823 1,687 1,644 0.4% Total core loans 13,344 13,323 12,955 12,925 0.2% % Cha
Slide 18: Capital Markets: loans and advances; Contact details
Capital Markets: loans and advances % Change 31 Aug 31 Mar 30 Sep 31 Mar YTD vs £'million 2011 2011 2010 2010 Mar 2011 UK and Europe 2,016 2,023 1,897 1,752 (0.3%) South Africa 2,480 2,556 2,599 2,590 (3.0%) Australia 283 253 196 166 11.9% Total core loans 4 779 4,779 4 832 4,832 4 692 4,692 4 508 4