Slide 1: Investor pre-close briefing 17 September 2015
Investor pre-close briefing 17 September 2015 Specialist Banking Asset Management Wealth & Investment 1
Slide 2: Proviso
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 interpretations under IFRS applicable to past,
Slide 3: Operational review
Out of the Ordinary® ~ o 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 2015 and compare 1H2016 vs 1H2015 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted opera
Slide 5: Overview of the operating environment
Overview of the operating environment • The operating environment in the UK has shown continued improvement supporting good levels of activity in our banking businesses • In South Africa our corporate and private banking businesses have benefitted from positive business momentum, notwithstanding an
Slide 6: Overview of the six months to Sep 2015
Overview of the six months to 30 Sep 2015 • The Specialist Banking business is expected to report results substantially ahead of the prior year: ‒ The UK Specialist Banking business is expected to report results significantly higher than the prior year ‒ The South African Specialist Banking business
Slide 7: Overview of the six months to Sep 2015
Overview of the six months to 30 Sep 2015 • Overall group results have been negatively impacted by the depreciation of the average Rand: Pounds Sterling exchange rate of approximately 8% over the period • Adjusted operating profit* is expected to be comfortably ahead of the prior year in Pounds Ster
Slide 8: Overview of the six months to Sep 2015
Overview of the six months to 30 Sep 2015 • For the period 31 Mar 2015 to 31 Aug 2015: – Third party assets under management decreased 6% to £116.2bn o A decrease of 2% on a currency neutral^ basis – Customer accounts (deposits) decreased 3% to £22.0bn o An increase of 5% on a currency neutral^ basi
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity and funding • Higher average liquidity levels in the UK driven Cash and near cash by sale of group assets in the prior year – these £'mn balances have decreased by 10% since March 12,000 2015 10,000 Average • We have continued to see good progress from 8,000 Investe
Slide 10: Impairment trends
Impairment trends • The total income statement Impairment analysis impairment charge is expected to £’mn be approximately 20% lower than 160 the prior year 140 120 100 • Impairments on the UK legacy 80 portfolio continue to decline 60 40 • Impairments in South Africa are 20 0 Ave* £’bn expected to b
Slide 11: Divisional review
Out of the Ordinary® ~ o Investec Divisional review 11
Slide 12: Asset Management
Asset Management • Net inflows of approximately Assets under management: £1.5bn to end of Aug 2015 Since 31 Mar 2015: down 8% to £71.1bn Currency neutral^: down 4% • 1H2016 earnings impacted by £’bn market and currency volatility 90 80 and lower performance fees in 70 South Africa 60 50 • Good busin
Slide 13: Wealth & Investment
Wealth & Investment • Solid net inflows of £1.1bn to end Funds under management: of Aug 2015 Since 31 Mar 2015: down 3% to £44.6bn Currency neutral^: up 1% • Average funds under £’bn management negatively impacted 50 by weaker equity markets and the 45 40 Rand 35 • Overall performance of the global
Slide 14: Specialist Banking
Specialist Banking • Global business is expected to post results substantially ahead of the prior year Net interest margin Investment and trading income • Loan growth in neutral currency of 6% • Significant improvement in investment income • Remain very liquid • Sound performance from the South Afri
Slide 15: Specialist Banking – additional information on the UK business
Specialist Banking – additional information on the UK business • The Ongoing UK business is expected to report results significantly ahead of the prior year largely as a result of increased activity levels in the corporate and private banking businesses and a normalised performance from the Hong Kon
Slide 16: Additional aspects
Out of the Ordinary® ~ o Investec Additional aspects 16
Slide 17: Other information
Other information • Effective tax rate: expected to be approximately 20% - 21% • Net non-controlling interests of approximately £18mn (profits attributable) relating to the Asset Management business, FX hedge accounting and the consolidation of the Property Fund • Weighted number of shares in issue
Slide 18: Conclusion
Out of the Ordinary® ~ o Investec Conclusion 18
Slide 19: Conclusion
Conclusion • Whilst recent market conditions may impact activity levels going forward this has not been visible on our day to day operations • We continue to make progress in the roll out of our Digital strategy and the penetration of our target client base across all our businesses • The multiple g
Slide 20: Investor pre-close briefing 17 September 2015
Investor pre-close briefing 17 September 2015 Specialist Banking Asset Management Wealth & Investment 20
Slide 21: 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 – UK: +44 (0) 207 597 4493 – SA: +27 (0) 11 286 7070 • E-mail: investorrelations@investec.com 21
Slide 22: Appendices
Appendices Currency neutral^: down 4% 22
Slide 23: Operating environment
Operating environment 31 Aug 31 Mar 30 Sep 2014 % move since Mar 2015 2015 2015 JSE ALSI 49,972 52,182 49,336 (4.2%) FTSE ALSI 3,435 3,664 3,534 (6.3%) SA Prime 9.50% 9.25% 9.25% 0.25% UK Clearing Banks 0.50% 0.50% 0.50% - Year to date 31 Aug 2015 31 Mar 2015 30 Sep 2014 Currency per £1.00 Close Ave
Slide 24: Adjusted operating profit: For the year ended Mar 2015
Adjusted* operating profit: For the year ended 31 Mar 2015 £’000 UK & Other Southern Africa Total group Asset Management 75,491 73,484 148,975 Wealth & Investment 56,871 21,910 78,781 Specialist Banking 41,795 262,918 304,713 174,157 358,312 532,469 Group costs (30,048) (9,264) (39,312) Total group
Slide 25: Adjusted operating profit: For the six months ended Sep 2014
Adjusted* operating profit: For the six months ended 30 Sep 2014 £’000 UK & Other Southern Africa Total group Asset Management 37,684 38,996 76,680 Wealth & Investment 26,912 11,126 38,038 Specialist Banking 12,971 113,080 126,051 Total group 77,567 163,202 240,769 Non-controlling interest: equity (
Slide 26: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2015 2015 2014 2014 YTD vs Mar 2015 UK and international 47,365 50,622 46,175 42,006 (6.4%) - Mutual funds 18,475 19,398 17,372 15,386 (4.8%) - Segregated mandates 28,890 31,224 28,803 26,620 (7.5%) So
Slide 27: Investec Wealth & Investment total: Funds under management
Investec Wealth & Investment total: Funds under management £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2015 2015 2014 2014 YTD vs Mar 2015 UK and Other 28,774 29,562 27,443 26,574 (2.7%) Southern Africa 15,842 16,514 15,149 14,198 (4.1%) Total 44,616 46,076 42,592 40,772 (3.2%) Investec Wealth &
Slide 28: 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 2015 2015 2014 2014 YTD vs Mar 2015 Discretionary 94,710 89,382 81,798 73,558 6.0% Non-discretionary 228,163 207,379 195,890 175,757 10.0% Total 322,873 296,761 277,688 249,315 8.8% £’million 31 Au
Slide 29: Total group core loans
Total group core loans £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2015 2015 2014 2014 YTD vs Mar 2015 UK and Europe 7,300 7,061 6,634 6,492 3.8% Southern Africa 9,698 10,128 9,303 8,935 (4.3%) Australia n/a* n/a* 44* 1,730* n/a* Total core loans 16,998 17,189 15,981 17,157 (1.1%) Home currency 3
Slide 30: Total group customer deposits
Total group customer deposits £’million 31 Aug 31 Mar 30 Sep 31 Mar % change 2015 2015 2014 2014 YTD vs Mar 2015 UK and Europe 9,842 10,298 10,382 9,407 (4.4%) Southern Africa 12,155 12,317 11,871 11,671 (1.3%) Australia n/a* n/a* n/a* 1,532* n/a* Total deposits 21,997 22,615 22,253 22,610 (2.7%) Ho