Slide 1: Investor pre-close briefing
Investor pre-close briefing 20 March 2008 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 inte
Slide 2: Operational review
Operational review • Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the eleven month period to 29 February 2008 and compare 1H08 vs 2H08 • Investec will release its results for the year to 31 March 2008 on 15 May 2008
Slide 3: Operating environment and overview of group performance
Operating environment 29 Feb 30 Sept 31 March % move 2008 2007 2007 since Sept JSE ALSI 30,674 29,959 27,267 2.4% FTSE ALSI 3,013 3,317 3,283 -9.2% Australian All Ord 5,675 6,581 5,979 -13.8% SA Prime 14.50% 13.50% 12.50% 1.0% UK Clearing Banks 5.25% 5.75% 5.25% -0.5% RBA cash rate target 7.00% 6.50
Slide 4: Divisional review: Private Banking
Divisional review Private Banking Loan portfolio • Very strong performance in South Africa driven by higher Since 31 Mar 2007: levels of activity and a good ▲ 34.6% to £9.2 bn performance from Growth £'bn 9 and Acquisition Finance 8 7 6 • Lower levels of activity in UK 5 and Australia 4 3 2 1 0 2000
Slide 5: Private Client Portfolio Management and Stockbroking; Capital Markets
Private Client Portfolio Management and Stockbroking Funds under management* • Increased market volumes and higher asset levels Since 31 Mar 2007: continue to drive performance ▼ 0.4% to £21.8 bn £'bn 25 20 15 10 5 0 2000 2002 2004 2006 Feb- 08 Discretionary Non-discretionary *Including £14.4 bn of
Slide 6: Capital Markets: Principal Finance and Kensington
Capital Markets: Principal Finance • We continue to monitor and restructure US exposure in structured credit investments • US structured credit investment exposure: 11 months to 6 months to 29 Feb 2008 30 Sept 2007 £’m £’m Net exposure 83 81 US sub prime 27 33 Other 56 48 • Additional write down on
Slide 7: Investment Banking and Asset Management
Investment Banking Agency and Advisory • Stable deal pipeline Direct Investments and Private Equity • Profitability of SA Private Equity portfolio skewed to first half due to timing of revaluations and cashflows • SA Direct Investments weaker performance from some of the listed investments in line w
Slide 8: Property Activities and Other Activities
Property Activities • Strong performance of investment property portfolio in second half • The sale of our South African property fund management and property administration business to Growthpoint was approved by the Competition Tribunal of South Africa on 18 October 2007 • The purchase considerati
Slide 9: Additional aspects
Additional aspects Goodwill and non-operating items • Impairment of goodwill arising on the acquisition of Kensington expected to be between £50 m and £60 m - will be offset by a non-operating exceptional gain of approximately £85 m on the sale of the South African property management and administra
Slide 10: Other information and capital and liquidity
Other information • Effective tax rate: expected to be approximately 26% • Increase in earnings attributable to minorities: –Largely due to translation of preferred securities issued by a subsidiary of Investec plc (transaction is hedged) • Weighted number of shares in issue for the year to 31 March
Slide 11: Asset quality
Asset quality • Continued strong focus on asset quality and credit risk in all geographies • We do expect an increase in impairments and defaults in light of weak economic conditions, particularly in Private Bank (UK and South Africa) and Capital Markets (South Africa) • We expect gross defaults as
Slide 12: Conclusion
Conclusion • Global market volatility and negative sentiment drive tough trading environment in 2H08 particularly in the UK and Australia • Notwithstanding these difficult circumstances and increased impairments we expect to show reasonable growth in operational earnings • Repricing of risk around t