Investec Plc · LSE:INVP
Investec — Corporate Update (March 2017)
31 slides from Investec's corporate update, Mar 14, 2017
Slide 1: Investor pre-close briefing
Investor pre-close briefing 14 March
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
Operational review Out of the Ordinary” © Investec
Slide 4: Proviso: basis of figures in the operational review
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the eleven month period to 28 Feb 2017 and compare 2H2017 vs 1H2017 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted ope
Slide 5: Overview of our operating environment
Overview of our operating environment Interims • The UK economy has been performing better 115 than originally expected but possibility of hard 105 Brexit creates uncertainty and could impact Exchange Rebased to 100 growth rates 95 85 75 • Overall, stock markets (excluding South Africa) Mar- Apr- Ma
Slide 6: Overview of the year ending 31 Mar 2017
Overview of the year ending 31 Mar 2017 • The Asset Management division’s results are expected to increase considerably and Wealth & Investment is expected to report results ahead of the prior year. Both divisions have benefitted from higher levels of average funds under management supported by a re
Slide 7: Overview of the year ending 31 Mar 2017
Overview of the year ending 31 Mar 2017 • Adjusted operating profit* is expected to be comfortably ahead of the prior year • Revenue is expected to be well ahead of the prior year • Recurring income as a percentage of total operating income is expected to be in line with the prior year at approximat
Slide 8: Overview of the year ending 31 Mar 2017
Overview of the year ending 31 Mar 2017 • For the period 31 Mar 2016 to 28 Feb 2017: − Third party assets under management increased 24.3% to £151.2bn o An increase of 13.9% on a currency neutral* basis – Customer accounts (deposits) increased 23.1% to £29.6bn o An increase of 5.5% on a currency neu
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity Cash and near cash • The group defensively increased cash balances in anticipation of the EU referendum in the UK – this has been successfully managed down to more appropriate levels and the group will Average continue to optimise its overall liquidity and funding p
Slide 10: Impairment trends
Impairment trends • The total income statement impairment charge is Impairment analysis expected to be in line with the prior year £’mn 350 300 • Impairments on the UK legacy portfolio continue to decline 250 200 150 • Impairments in South Africa are expected to be ahead of the prior year although t
Slide 11: Divisional review
Divisional review © Investec
Slide 12: Asset Management
Asset Management • AUM of £95.5bn as at 28 Feb 2017 Assets under management: Since 31 Mar 2016: up 26.2% to £95.5bn − Up 26.2% from 31 Mar 2016 - Up 15.7% on a currency neutral^ basis − Largely driven by currency and market £’bn movements 120 100 • More challenging second half for flows, but net inf
Slide 13: Wealth & Investment
Wealth & Investment • Overall performance of the global business Funds under management: expected to be ahead of the prior year Since 31 Mar 2016: up 21.2% to £55.1bn − Higher average funds under management - Up 11.0% on a currency neutral^ basis £’bn − Solid net inflows of £1.1bn to end of Feb 60 2
Slide 14: Specialist Banking
Specialist Banking • Ongoing Specialist Bank results expected to be ahead of the prior year Net interest income Investment, associate, trading and other operating income • Net interest increase supported by book growth of 7.2% on a currency neutral* basis • Investment income expected to be behind th
Slide 15: Specialist Banking – UK legacy business
Specialist Banking – UK legacy business • The Legacy business is expected to report a smaller loss than the prior year as a result of an overall reduction in both impairments and costs Legacy portfolio total net loans £’mn 8 000 6 892 Kensington - Ireland 7 000 6 000 Kensington - UK warehouse loans
Slide 16: Additional aspects
Additional aspects Out of the Ordinary” © Investec 16
Slide 17: Other information
Other information • Effective tax rate: expected to be approximately 19% • Net non-controlling interests of approximately £76mn (profits attributable) relating to the Asset Management business and the consolidation of the Investec Property Fund • Weighted number of shares in issue for the year endin
Slide 18: Additional information on the Competition Commission allegations
Additional information on the Competition Commission allegations • Eighteen banks, including Investec Limited, have been cited on allegations of collusion in relation to foreign exchange. Despite seeking further details of what the precise allegations are against us, we have not yet received the rel
Slide 19: Conclusion
Conclusion © Investec
Slide 20: Conclusion
Conclusion • The geopolitical environment has been full of surprises which have had both positive and negative effects on our operating environment • Our focus has been on growing our core earnings drivers and our client franchise businesses • We have continued to see good progress on all fronts as
Slide 21: Investor pre-close briefing
Investor pre-close briefing 14 March
Slide 22: 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 22
Slide 23: Appendices
Appendices © Investec
Slide 24: Operating environment
Operating environment 28 Feb 2017 30 Sep 2016 31 Mar 2016 % move since Mar 2016 JSE ALSI 51,659 51,950 52,250 (1.1%) FTSE ALSI 3,953 3,755 3,395 16.4% SA Prime 10.50% 10.50% 10.50% - UK Clearing Banks 0.25% 0.25% 0.50% (0.25%) Year to date 28 Feb 2017 30 Sep 2016 31 Mar 2016 Currency per £1.00 Close
Slide 25: Adjusted operating profit: six months ended Sep 2016
Adjusted* operating profit: For the six months ended 30 Sep 2016 £’000 UK & Other Southern Africa Total group Asset Management 43,116 39,138 82,254 Wealth & Investment 29,192 14,005 43,197 Specialist Banking 62,166 117,623 179,789 Specialist Banking - Ongoing 95,211 Specialist Banking - Legacy busin
Slide 26: Adjusted operating profit: year ended Mar 2016
Adjusted* operating profit: For the year ended 31 Mar 2016 £’000 UK & Other Southern Africa Total group Asset Management 76,853 57,930 134,783 Wealth & Investment 63,127 22,608 85,735 Specialist Banking 78,043 252,837 330,880 Specialist Banking - Ongoing 156,378 Specialist Banking - Legacy business
Slide 27: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2016 UK and international 61,246 59,030 51,076 19.9% - Mutual funds 23,018 20,726 18,289 25.9% - Segregated mandates 38,228 38,304 32,787 16.6% Southern Africa 34,256 30,807 24,603 3
Slide 28: Investec Wealth & Investment: Funds under management
Investec Wealth & Investment: Funds under management £’million 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2016 UK and Other 35,143 33,359 29,769 18.1% Southern Africa 19,937 17,969 15,690 27.1% Total 55,080 51,328 45,459 21.2% Investec Wealth & Investment UK and Other: Funds under manag
Slide 29: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2016 Discretionary 105,553 105,735 104.480 1.0% Non-discretionary 218,028 215,593 227,033 (4.0%) Total 323,581 321,328 331,513 (2.4%) £’million 28 Feb 2017 30 Sep 2016 31 Mar 201
Slide 30: Total group core loans
Total group core loans £’million 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2016 UK and Other 8,694 8,299 7,804 11.4%* Southern Africa 14,346 12,599 10,315 39.1% Total core loans 23,040 20,898 18,119 27.1% Home currency 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs ’million Mar 20
Slide 31: Total group customer deposits
Total group customer deposits £’million 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2016 UK and Other 11,355 12,033 10,801 5.1% Southern Africa 18,251 16,272 13,243 37.8% Total customer deposits 29,606 28,305 24,044 23.1% Home currency 28 Feb 2017 30 Sep 2016 31 Mar 2016 % change YTD vs