Investec Plc · LSE:INVP
Investec — Corporate Update (September 2017)
28 slides from Investec's corporate update, Sep 15, 2017
Slide 1: Investor pre-close briefing
Investor pre-close briefing 15 September
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® ~ oS Investec
Slide 4: Proviso: basis of operational review figures
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 Aug 2017 and compare 1H2018 vs 1H2017 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted opera
Slide 5: Overview of our operating environment
Overview of our operating environment Year end • The UK economy has been growing at a slower pace with the increase in inflation squeezing household spending whilst Brexit continues to Exchange create uncertainty rates • The South African economy came out of recession in the second quarter but busin
Slide 6: Overview of the six months ending Sep 2017
Overview of the six months ending 30 Sep 2017 • The Wealth & Investment business is expected to report results comfortably ahead of the prior period, while the Asset Management division is expected to report results in line with the prior period. Both divisions have benefitted from higher levels of
Slide 7: Overview of the six months ending Sep 2017
Overview of the six months ending 30 Sep 2017 • The appreciation of the average Rand: Pounds Sterling exchange rate has had a positive impact on our results • Revenue is expected to be ahead of the prior period • Recurring income as a percentage of total operating income is expected to be approximat
Slide 8: Overview of the six months ending Sep 2017
Overview of the six months ending 30 Sep 2017 • For the period 31 Mar 2017 to 31 Aug 2017: − Third party assets under management increased 6.1% to £160.0bn – Customer accounts (deposits) increased 1.3% to £29.5bn – Core loans and advances increased 4.5% to £23.7bn – Immaterial exchange rate impact o
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity Cash and near cash • The group has maintained strong liquidity levels • Cost of funds in the UK has continued to reduce Average • Advances as a percentage of customer deposits at 31 Aug 2017 was 79% (Mar 2017: 76%) Capital • Investec Limited CET1 ratio is expected t
Slide 10: Impairment trends
Impairment trends • The total income statement impairment charge is Impairment analysis expected to be ahead of the prior period £’mn 160 − Impairments on the UK legacy portfolio are expected to be slightly ahead of the prior period 140 120 − Impairments in South Africa and the Ongoing UK business a
Slide 11: Divisional review
Divisional review Out of the Ordinary® ~ oS Investec
Slide 12: Asset Management
Asset Management • Positive net inflows of £1.9bn to end of Aug 2017 Assets under management Since 31 Mar 2017: up 7.2% to £102.1bn £’bn • 1H2018 earnings supported by market levels 120 and solid net inflows offset by lower performance 100 fees in South Africa 80 60 • Competitive investment performa
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 2017: up 4.3% to £57.1bn − Higher average funds under management £’bn − Solid net inflows of £0.9bn to end of Aug 60 2017 50 40 • Earnings in South Africa impac
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 income supported by book growth of 4.5% since 31 Mar 2017 • Investment income expected to be ahead of the prior per
Slide 15: Specialist Banking - UK Legacy business
Specialist Banking- UK Legacy business • The Legacy business is expected to report a loss moderately ahead of the prior period as a result of anticipated acceleration of a sale of a portion of the book Legacy Total remaining portfolioUK total legacy net loans assets £'mn 5,000 4 856 Other Private Ba
Slide 16: Additional aspects
Additional aspects ~ oS Investec
Slide 17: Other Information
Other Information • Effective tax rate: expected to be approximately 15% • Net non-controlling interests of approximately £32mn (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: Conclusion
Conclusion Out of the Ordinary® ~ oS Investec
Slide 19: Conclusion
Conclusion • The geopolitical environment has been challenging with much uncertainty prevailing in our two core geographies. The uncertainties arising from the complexity of Brexit continue, while the South African political environment remains unsteady in the run up to the December ruling party lea
Slide 20: Appendices
Appendices ~ oS Investec
Slide 21: Operating environment
Operating environment 31 Aug 2017 31 Mar 2017 30 Sep 2016 % move since Mar 2017 JSE ALSI 56,522 52,056 51,950 8.6% FTSE ALSI 4,073 3,990 3,755 2.1% SA Prime 10.25% 10.50% 10.50% (0.25%) UK Clearing Banks 0.25% 0.25% 0.25% - Year to date 31 Aug 2017 31 Mar 2017 30 Sep 2016 Currency per £1.00 Close Av
Slide 22: Adjusted operating profit: For the year ended Mar 2017
Adjusted* operating profit: For the year ended 31 Mar 2017 £’000 UK & Other Southern Africa Total group Asset Management 91,262 73,562 164,824 Wealth & Investment 65,190 28,053 93,243 Specialist Banking 104,604 285,226 389,830 Specialist Banking - Ongoing 169,196 Specialist Banking - Legacy business
Slide 23: Adjusted operating profit: For the 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 24: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 31 Aug 2017 31 Mar 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2017 UK and international 66,319 61,379 59,030 51,076 8.0% - Mutual funds 26,406 23,399 20,726 18,289 12.9% - Segregated mandates 39,913 37,980 38,304 32,787 5.1% Souther
Slide 25: Investec Wealth & Investment: Funds under management
Investec Wealth & Investment: Funds under management £’million 31 Aug 2017 31 Mar 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2017 UK and Other 37,370 35,555 33,359 29,769 5.1% Southern Africa 19,747 19,218 17,969 15,690 2.8% Total 57,117 54,773 51,328 45,459 4.3% Investec Wealth & Investment U
Slide 26: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 31 Aug 2017 31 Mar 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2017 Discretionary 115,101 109,869 105,735 104,480 4.8% Non-discretionary 215,657 212,412 215,593 227,033 1.5% Total 330,758 322,281 321,328 331,513 2.6% £’million 31
Slide 27: Total group core loans
Total group core loans £’million 31 Aug 2017 31 Mar 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2017 UK and Other 8,956 8,621 8,299 7,804 3.9% Southern Africa 14,776 14,086 12,599 10,315 4.9% Total core loans 23,732 22,707 20,898 18,119 4.5% Home currency 31 Aug 2017 31 Mar 2017 30 Sep 2016 31
Slide 28: Total group customer deposits
Total group customer deposits £’million 31 Aug 2017 31 Mar 2017 30 Sep 2016 31 Mar 2016 % change YTD vs Mar 2017 UK and Other 11,082 11,013 12,033 10,801 0.6% Southern Africa 18,404 18,096 16,272 13,243 1.7% Total customer deposits 29,486 29,109 28,305 24,044 1.3% Home currency 31 Aug 2017 31 Mar 20