Investec Plc · LSE:INVP
Investec — Investor Presentation (February 2003)
31 slides from Investec's investor presentation, Feb 24, 2003
Slide 1: Investor Briefing
Investor Briefing 24 February 2003 Introduction • Purpose of today's briefing is to: – Compare Investec’s share price to its global peer group – Provide an update on trading trends within the group
Slide 2: Share Price Performance: Global Investment Banks
Share Price Performance Global Investment Banks JANUARY 2002 to date
Slide 3: Investec relative to Merrill Lynch and Goldman Sachs
Investec Limited relative to Merrill Lynch 140 130 Jan 2002 to date 120 110 Rebased to 100 100 90 80 70 60 50 40 01-Jan-02 01-Apr-02 01-Jul-02 01-Oct-02 01-Jan-03 Merrills (US$) Investec Ltd (US$) Investec Limited relative to Goldman Sachs 140 Jan 2002 to date 130 120 Rebased to 100 110 100 90 80 70
Slide 4: Investec relative to Morgan Stanley and HSBC
Investec Limited relative to Morgan Stanley 140 Jan 2002 to date 130 120 110 Rebased to 100 100 90 80 70 60 50 40 1/Jan/02 1/Mar/02 1/May/02 1/Jul/02 1/Sep/02 1/Nov/02 1/Jan/03 Morgan Stan (US$) Investec Ltd (US$) Investec Limited relative to HSBC 140 Jan 2002 to date 130 120 Rebased to 100 110 100
Slide 5: Global Investment Banks: December, Merrill Lynch
Global Investment Banks December 2002 to date Investec Limited relative to Merrill Lynch Dec 2002 to date 105 100 95 Rebased to 100 90 85 80 75 70 02-Dec-02 13-Dec-02 24-Dec-02 04-Jan-03 15-Jan-03 26-Jan-03 06-Feb-03 Merrills (US$) Investec Ltd (US$)
Slide 6: Investec relative to Goldman Sachs and Morgan Stanley (December)
Investec Limited relative to Goldman Sachs 105 Dec 2002 to date 100 Rebased to 100 95 90 85 80 02-Dec-02 12-Dec-02 22-Dec-02 01-Jan-03 11-Jan-03 21-Jan-03 31-Jan-03 Goldmans (US$) Investec Ltd (US$) Investec Limited relative to Morgan Stanley 105 Dec 2002 to date 100 95 Rebased to 100 90 85 80 75 02
Slide 7: Speciality & Finance: Close Brothers (January)
Speciality & Finance JANUARY 2002 to date Investec Limited relative to Close Brothers 140 130 Jan 2002 to date 120 110 Rebased to 100 100 90 80 70 60 50 40 1/Jan/02 25/Feb/02 21/Apr/02 15/Jun/02 9/Aug/02 3/Oct/02 27/Nov/02 21/Jan/03 Close Bros (US$) Investec Ltd (US$)
Slide 8: Investec relative to Amvescap and Schroders
Investec Limited relative to Amvescap 140 Jan 2002 to date 120 100 Rebased to 100 80 60 40 20 1/Jan/02 1/Mar/02 1/May/02 1/Jul/02 1/Sep/02 1/Nov/02 1/Jan/03 Investec Ltd (US$) Amvescap (US$) Investec Limited relative to Schroders 140 Jan 2002 to date 130 120 110 Rebased to 100 100 90 80 70 60 50 40
Slide 9: Speciality & Finance: Close Brothers (December)
Speciality & Finance December 2002 to date Investec Limited relative to Close Brothers 105 Dec 2002 to date 100 Rebased to 100 95 90 85 80 02-Dec-02 13-Dec-02 24-Dec-02 04-Jan-03 15-Jan-03 26-Jan-03 06-Feb-03 Close Bros (US$) Investec Ltd (US$)
Slide 10: Investec relative to Amvescap and Schroders (December)
Investec Limited relative to Amvescap 105 Dec 2002 to date 100 95 90 Rebased to 100 85 80 75 70 65 60 2-Dec-02 13-Dec-02 24-Dec-02 4-Jan-03 15-Jan-03 26-Jan-03 6-Feb-03 Investec Ltd (US$) Amvescap (US$) Investec Limited relative to Schroders 105 Dec 2002 to date 100 95 Rebased to 100 90 85 80 75 2-D
Slide 11: Macquarie Bank: January
Macquarie Bank January 2002 to date Investec Limited relative to Macquarie 140 130 Jan 2002 to date 120 110 Rebased to 100 100 90 80 70 60 50 40 02-Jan-02 02-Apr-02 02-Jul-02 02-Oct-02 02-Jan-03 Macquarie Bank (USD) Investec Limited (USD)
Slide 12: Macquarie Bank: December
Macquarie Bank December 2002 to date Investec Limited relative to Macquarie 120 Dec 2002 to date 115 110 105 Rebased to 100 100 95 90 85 80 75 70 02-Dec-02 14-Dec-02 26-Dec-02 07-Jan-03 19-Jan-03 31-Jan-03 12-Feb-03 Macquarie Bank (USD) Investec Limited (USD)
Slide 13: Operational Review Overview
Operational Review Overview • Proviso: Unless otherwise stated, figures and trends discussed in the operational review relate to the ten month period to 31 January 2003
Slide 14: Overview
Overview • Overall YTD performance in the majority of our businesses continues to reflect trends experienced in the first half of the year – South Africa and Australia: performing well – UK and Europe: results continue to be affected by weak equity markets – Israel: difficult geo-political and opera
Slide 15: Operational Review: Southern Africa and UK & Europe, Private Banking
Operational Review: Southern Africa and UK & Europe Private Banking • The Private Bank has continued to post strong results • Growth in profitability has been achieved through asset creation as well as increased non-interest income • The group continues to monitor the property market in the UK and b
Slide 16: Private Banking and Private Client Stockbroking
Private Banking • Loan portfolio details: – SA: R16.6bn (including securitised book) (Sept 02: R15.2bn) – UK: £929mn (Sept 02: £846mn) Private Client Stockbroking and Portfolio Management • Overall results continue to be affected by weak equity markets • Both businesses are however profitable with t
Slide 17: Investment Banking: SA
Investment Banking • Market conditions remain tough with overall performance influenced by weaker markets • SA Corporate Finance: – Maintains a strong positioning with a number of new clients and major transactions completed – YTD: 41 Corporate Finance deals and 41 Sponsor Broker Deals (28 and 26 re
Slide 18: Investment Banking: UK
Investment Banking • UK Investment Banking and Securities: – Results reflect the same trends as at September – Notwithstanding the environment: 15 new client wins – Market share and recognition in the city has increased – Embarked on a strategic restructuring of the business whereby cost base will b
Slide 19: Treasury and Specialised Finance
Treasury and Specialised Finance • SA performance still strong but expected to have a weaker performance than the first half of the year – Solid performance from most of the trading activities – Structured Finance deal flow has slowed – Project Finance: additional provision wrt Namco of approx. R25m
Slide 20: Asset Management
Asset Management • Extremely resilient business with a good track record • Total stability in top structure • Successfully managed the transition from balanced to specialist house • Powerful retail and institutional interface in core markets (SA & UK) • Strong track records with one notable short te
Slide 21: Asset Management – Recent Achievements
Asset Management – Recent Achievements SA • Successful creation of two independent SA units – Institutional (SA) – Personal Investments (SA) • Largest manager of 3rd party assets in SA • Excellent specialist performance in SA (3rd in 2002 Plexus survey) • Created a specialist fixed income unit with
Slide 22: Assurance Activities and Other Activities
Assurance Activities • Continue to rationalise and restructure the business • As mentioned at the time of the half year results, the results posted at September 2002 will not be repeated in the second half of the year • Not possible to give any further guidance until actuarial valuation for 31 March
Slide 23: Operational Review: Australia, Israel, USA
Operational Review: Australia, Israel, USA Australia • The operations continue to grow and develop and we are encouraged by the progress that has been made in the region – Lending book: A$407mn – Deposit book: A$382mn: positively influenced by obtaining our banking licence – Investment Banking ranke
Slide 24: Israel and USA
Israel • Israel’s results continue to be affected by a tough political situation and weak economic environment • Results will be weaker than the first half of the year • However, business model is strategically aligned which bodes well for the future USA • The region has continued to post losses as
Slide 25: Summary Headcount by Geography
Operational Review: Summary Headcount by Geography Number of Employees Dec 2002 Mar 2002 Mar 2001 Mar 2000 SA & Other 2,832 3,009 2,244 2,180 UK & Europe 1,478 1,510 1,417 1,379 Australia 101 84 74 - USA 268 688 859 661 Israel 229 238 242 221 Total number of employees 4,908 5,529 4,836 4,441
Slide 26: Summary Headcount by Product
Summary Headcount by Product Number of Employees Dec 2002 Mar 2002 Mar 2001 Mar 2000 Investment Banking 409 462 344 291 Treasury & Spec Finance 425 503 441 384 Private Banking 1,024 958 1,032 936 Private Client Stockbroking 543 855 996 892 Asset Management 750 763 670 630 Assurance 502 576 Other Act
Slide 27: Additional Aspects: Liquidity
Additional Aspects: Liquidity • The group has always maintained a high level of liquidity • UK: – The group’s policy is to hold prudential liquidity requirements of 20%, well above the regulatory requirements of 0% – The group currently has approx. £988mn of near-cash assets Additional Aspects: Liqu
Slide 28: Additional Aspects: Liquidity and Credit Quality
Additional Aspects: Liquidity • Israel – The group currently has approx. NIS3.3bn of near-cash assets • Australia – The group currently has approx. A$270mn of near-cash assets Additional Aspects: Credit Quality • Credit quality remains sound with no major deviations in NPL or provision levels • The
Slide 29: Additional Aspects: Incentive Schemes
Additional Aspects: Incentive Schemes • Have adopted international accounting standards for options • Charge to compensation will be approximately £6.25mn per annum which is approximately 2.5% of compensation costs Additional Aspects: Incentive Schemes • Other Incentive Schemes: – Amount due by ex e
Slide 30: Additional Aspects: Dividend Policy
Additional Aspects: Dividend Policy • The group continues to target a dividend cover range of between 1.70 to 2.3, based on the group’s reported results in UK GAAP Sterling Outlook
Slide 31: Outlook
Outlook • Significant adjustment and rationalisation behind us creating a much leaner organisation positioned to cope with a sustained market downturn