Investec Plc · LSE:INVP
Investec — Corporate Update (March 2009)
21 slides from Investec's corporate update, Mar 19, 2009
Slide 1: Investor pre-close briefing
Investor pre-close briefing 19 March 2009 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 28 February 2009 and compare 1H09 vs 2H09. • References to operating profit relate to normalised* operating profit. Trends within the divisional sections
Slide 3: Overview of the financial year ending 31 March 2009
Overview of the financial year ending 31 March 2009 • Operating fundamentals and activity levels across the group’s core geographies continue to be negatively impacted by the global financial market crisis and volatile equity markets • The group’s three core geographies remain profitable • Recurring
Slide 4: Sound balance sheet and diversified business model
Sound balance sheet and diversified business model • Supported by: – Senior management “hands-on” culture, ensuring strict management of risk and liquidity Sound balance sheet and diversified business model • Supported by: Surplus cash and near cash – A liquidity management £'mn philosophy that has
Slide 5: Sound balance sheet and diversified business model
Sound balance sheet and diversified business model • Supported by: – An increase in customer deposits and access to longer term funding facilities – An active campaign to build the group’s retail deposit franchise has been launched in the UK and Ireland which has been successful º Private Bank UK: a
Slide 6: Sound balance sheet and diversified business model
Sound balance sheet and diversified business model • Supported by: Defaults and core loans – Credit and counterparty exposures to a select target % £'bn 3.0 16 market 14.6 2.5% 14 – Continued strong focus on 2.5 12 asset quality and credit risk in 2.0 10 all geographies 1.5 8 – Impairments and defau
Slide 7: Divisional review
Divisional review Overview • Higher average advances resulting in strong growth in net interest income • Lower level of activity and falling asset prices have resulted in a decline in net fees and commissions receivable and revenue from principal transactions • Expenses continue to be tightly manage
Slide 8: Private Banking; Private Client Portfolio Management and Stockbroking
Private Banking • Market conditions have Loan portfolio*: up 20% to £10.7 bn negatively impacted £'bn 12 impairments, exits and activity levels resulting in significantly 10 lower operating profit in 2H09 8 across all geographies 6 4 • Increased efforts on retail 2 deposit raising initiatives have 0
Slide 9: Capital Markets; Kensington
Capital Markets • Reasonable levels of activity Loan portfolio*: up 17% to £4.4 bn across the advisory, structuring £'bn and trading businesses 5 • Increase in impairments across 4 all geographies reflects the 3 weaker credit cycle • Taken advantage of select 2 distressed debt and credit 1 opportuni
Slide 10: Investment Banking; Asset Management
Investment Banking Agency and Advisory • Significant slow down in activity levels as equity markets have continued to decline Principal Investments (Direct Investments and Private Equity) • South Africa Principal Investments continues to perform well • UK and Australia Principal Investments severely
Slide 11: Property Activities; Other Activities
Property Activities • Weaker property fundamentals • However, performing in line with the 1H09, benefiting from fees earned on projects completed in the current period and reasonable performance from the investment property portfolio Other Activities • Central Funding: – Slightly weaker performance
Slide 12: Additional aspects
Additional aspects Other information • Effective tax rate: expected to be approximately 24% • Weighted number of shares in issue for the year ended 31 March 2009 expected to be approximately 635 mn • Goodwill impairments: –Marginal across the group but currently reviewing the Global Ethanol investme
Slide 13: Conclusion
Conclusion Conclusion • The results for the financial year ending 31 March 2009 will demonstrate that Investec was able to navigate a steady course during a year of unprecedented turmoil in financial markets • Looking ahead the outlook for the global economy is uncertain and markets remain volatile
Slide 14: Difficult operating environment continues
Appendices Difficult operating environment continues % move since 28 Feb 2009 30 Sep 2008 31 Mar 2008 Mar 2008 JSE ALSI 18,465 23,836 29,588 (37.6%) FTSE ALSI 1,930 2,484 2,927 (34.1%) Australian All Ord 3,297 4,631 5,410 (39.0%) SA Prime 14.00% 14.50% 14.50% 0.50% UK Clearing Banks 1.00% 5.00% 5.25
Slide 15: Normalised operating profit
Normalised* operating profit: For the six months ended 30 September 2008 Southern UK & Europe Australia Total Africa group £’000 Private Banking 22,614 35,080 5,532 63,226 Private Client Portfolio Management and 6,549 6,579 - 13,128 Stockbroking Capital Markets 31,212 39,488 1,430 72,130 Investment
Slide 16: Private Banking: loans and advances; retail deposits
Private Banking: loans and advances % Change 28 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs Mar £'million 2009 2008 2008 2007 2007 2008 UK and Europe 3,657 3,482 3,327 2,937 2,398 9.9% South Africa 5,874 5,314 4,551 4,588 3,930 29.1% Australia 1,164 1,092 1,030 575 527 13.0% Total loans 10,695 9,888 8,90
Slide 17: Private Banking: funds under advice; Capital Markets: loans and advances
Private Banking: funds under advice % Change 28 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs Mar £'million 2009 2008 2008 2007 2007 2008 UK and Europe 1,527 1,674 1,770 1,338 951 -13.7% South Africa 1,495 1,654 1,598 1,651 1,275 -6.4% Australia 215 277 313 347 306 -31.2% Funds under advice 3,237 3,605 3,6
Slide 18: SA Private Client Securities FUM; Investec Asset Management AUM
SA Private Client Securities: funds under management % Change 28 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs Mar R'million 2009 2008 2008 2007 2007 2008 Discretionary 15,139 19,079 21,406 19,764 18,419 -29.3% Non-discretionary 65,386 84,523 91,338 92,785 87,177 -28.4% Total 80,525 103,602 112,744 112,549
Slide 19: Investec Asset Management: UK and global investment performance
Investec Asset Management: UK and global retail investment performance One year Three years 4th Quartile 12.7% 1st Quartile 4th Quartile 24.9% 26.8% 1st Quartile 39.0% 3rd Quartile 34.5% 3rd Quartile 14.9% 2nd Quartile 2nd Quartile 33.4% 13.8% Performance to 28 February 2009, excludes cash, cash plu
Slide 20: Investec Asset Management: SA investment performance
Investec Asset Management: SA retail investment performance One year Three years 3rd Quartile 4th Quartile 4th Quartile 5.2% 1st Quartile 0% 23.5% 19.0% 1st Quartile 51.2% 3rd Quartile 2nd Quartile 18.1% 43.6% 2nd Quartile 39.4% Performance to 28 February 2009. Source: Calculated from Standard & Poo
Slide 21: Contact details
Contact details For further information please refer to the Investor Relations website: www.investec.com/grouplinks/investorrelations Or contact the Investor Relations team: • Telephone: – UK: +44 (0) 207 597 5546 – SA: +27 (0) 11 286 7070 • E-mail: investorrelations@investec.com Page 21