Investec plc · LSE:INVP
Investec — H1 FY2016 Earnings Presentation
35 slides from Investec's earnings presentation, Nov 19, 2015
Slide 1: Results Presentation
• • ••••• ••• •• •••••••••• ••••••••• s / ••• •• RESULTS PRESENTATION For the six months ended 30 September 2015
Slide 2: Proviso
Unless otherwise stated, all information on this slide relates to the ongoing business 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: o t
Slide 3: Highlights for the six month period
Unless otherwise stated, all information on this slide relates to the ongoing business Highlights for the six month period • Overall, we have continued to enhance our international offering, growing the client base and deepening our core franchise • We had solid net inflows of £4bn in the Wealth & I
Slide 4: As a result … Statutory operating profit showed steady growth
Unless otherwise stated, all information on this slide relates to the ongoing business As a result … Statutory operating profit showed steady growth • Statutory results showed steady growth, despite Rand depreciation of 8.2% % change on neutral Sep-15 Sep-14 % change currency basis Operating profit*
Slide 5: Mixed operating environment
Unless otherwise stated, all information on this slide relates to the ongoing business Mixed operating environment Results impacted by strength of sterling against our key operating currencies Exchange rates Closing rate Average rate 120 % change % change Since Since Since Since 110 Mar-15 Sep-14 Ma
Slide 6: Diversified business model
Unless otherwise stated, all information on this slide relates to the ongoing business Diversified business model Geographic diversity Revenue diversity Operating profit* % contribution to group by geography Operating profit* % contribution to group by business 100% 100% 90% 90% 80% UK and 80% Other
Slide 7: Key earnings drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Key earnings drivers Third party assets under management^ Customer accounts (deposits) and loans^ Currency neutral Currency neutral Asset Management Customer accounts Wealth & Investment Core loans and advances to
Slide 8: Supporting growth in operating income
Unless otherwise stated, all information on this slide relates to the ongoing business Supporting growth in operating income Total operating income^ Currency neutral £’mn 1 000 750 500 250 - Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 ^The trends in these graphs are done on a currency neutral basis us
Slide 9: Impairments continue downward trend
Unless otherwise stated, all information on this slide relates to the ongoing business Impairments continue downward trend Down 68% since the peak in 2011 Total impairment (including legacy) by geography £’mn 160 Legacy and sale assets* Total mining exposure represents South Africa 2.7% of total cre
Slide 10: Fixed costs marginally up
Unless otherwise stated, all information on this slide relates to the ongoing business Fixed costs marginally up Jaws ratio for the group Asset Management operating margin Operating costs Operating income £’mn Sep-14 Mar-15 Sep-15 D 3.5% 0.6% % 1 200 40 35.7 34.2 33.0 • Headcount up 29 people to s
Slide 11: 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 POUND RESULTS Sep-15 Sep-14 % change neutral basis Operating profit* before tax (£’000) 315.0 270.4 16.5% 22.2% Attributable earnings**^ (£’000) 222.6 193.2
Slide 12: 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 Sep-15 Sep-14 Sep-15 Sep-14 ROE (post tax) 12%-16% over a rolling 5-yr 14.8% 13.6% 12.6% 10.7% period Adjusted* EPS growth Target: 10% > UKPRI 13.3%
Slide 13: Stable capital position
Unless otherwise stated, all information on this slide relates to the ongoing business Stable capital position As at 30 Sep 2015 Capital adequacy Tier 1 Investec Bank Investec Bank 14.5% 10.8% Limited Limited Investec Limited 14.2% As Investec Limited 10.9% As reported reported Investec Bank plc 18.
Slide 14: Divisional highlights
Divisional highlights 14
Slide 15: Asset management - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Asset management - overview Overview of performance Financial summary • Positive net flows from all Client Groups, totalling £2.9bn for the six months to 30 September 2015 Sep-15 Sep-14 % change • Our investment p
Slide 16: Wealth & Investment - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment - overview Overview of performance Financial summary • Higher average funds under management Sep-15 Sep-14 % change • Net inflows of £1.1bn • Performance marginally behind prior period with str
Slide 17: Specialist Banking - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking - overview Overview of performance Financial summary SA Sep-15 Sep-14 % change • Corporate and private banking businesses benefited from positive business momentum and franchise growth Operating
Slide 18: Specialist Banking – mix of income
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – mix of income Analysis of income (currency neutral)^ £’mn 700 • SA unlisted investment portfolio delivered a solid Investment performance 600 and trading • UK experienced higher earnings from
Slide 19: Specialist Banking: 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 • The legacy portfolio has continued to be actively £'mn Sep-15 Sep-14 managed down to £645mn from £696mn (Mar-15) Total income 4.0 7.7 • Lar
Slide 20: Positioning and strategy
Positioning and strategy 20
Slide 21: Maintaining a sustainable business model
Unless otherwise stated, all information on this slide relates to the ongoing business Maintaining a sustainable business model Balanced between capital light and capital intensive activities Business model £’mn Third party assets and Net interest, investment 600 advisory and trading income £534mn 5
Slide 22: Strategic priorities for 2016: Asset Management
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Asset Management • No significant change – clients always come first • Focus on investment performance – always the key priority • Build out multi-asset and global equity offerings •
Slide 23: Strategic priorities for 2016: Wealth & Investment
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Wealth & Investment • Key opportunities include: o Building and leveraging our private office offering o Strong integration with private banking business in terms of channel o Digitis
Slide 24: Strategic priorities for 2016: Specialist Bank UK and Other positioning
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Specialist Bank UK and Other Ongoing Positioning Analysis of income • Benefitted from Franchise value dislocation in the market and gained market share £'mn Avg value 650 since 2011 •
Slide 25: Strategic priorities for 2016: Specialist Bank SA positioning
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Specialist Bank SA Ongoing Positioning Analysis of income •Franchise value Leading Private Bank over many R'mn Avg value years 14 since 2011 • Leading Corporate Advisory Other operati
Slide 26: Strategic priorities for 2016: Specialist Bank UK and Other opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Specialist Bank UK and Other Ongoing Opportunities Net profit (before tax) ROE (post tax) • Opportunityvalue Franchise to build out the client franchise businesses in the UK £'mn thro
Slide 27: Strategic priorities for 2016: Specialist Bank SA opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Specialist Bank SA Ongoing Opportunities Net profit (before tax) •Franchise ROE (post tax) value business We have a resilient model and look to benefit from R'mn 6 16% the opportuniti
Slide 28: Digitization strategy: High Touch AND High Tech
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Digitization strategy: High Touch AND High Tech • 2014 -2015 focused on collaborating, merging and aligning to create one digital solution for clients • This is a journey, not a ‘proj
Slide 29: Taking advantage of investment opportunities
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Taking advantage of investment opportunities • In South Africa a new investment vehicle, Investec Equity Partners (IEP), has been created in which Investec will hold a 45% stake along
Slide 30: Positioning for a new generation of leadership
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Positioning for a new generation of leadership • In pursuit of sustained growth, we have restructured certain operating responsibilities: o To maintain differentiated businesses that
Slide 31: Key responsibilities to highlight
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Key responsibilities to highlight (subject to regulatory approval) Group • Group Risk and Finance Director – Glynn Burger • Group Chief Financial Officer – Nishlan Samujh Global Speci
Slide 32: Closing
Closing 32
Slide 33: Summary
Unless otherwise stated, all information on this slide relates to the ongoing business Summary Sustainability through diversification • We are well positioned for sustained growth across our businesses as a result of the following: o We have restructured and aligned our areas of activity to ensure w
Slide 34: Outlook
Unless otherwise stated, all information on this slide relates to the ongoing business Outlook • The macro environment is uncertain as global equity markets remain volatile and, in South Africa, social and economic challenges persist. • Nevertheless, we remain positive on our current position and pr
Slide 35: End
End 35