Investec Plc · LSE:INVP
Investec — Corporate Update (March 2018)
30 slides from Investec's corporate update, Mar 16, 2018
Slide 1: Investor pre-close briefing
Investor pre-close briefing 16 March 2018
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
Proviso • Please note that unless otherwise stated, figures and trends discussed in the operational review relate to the eleven month period to 28 Feb 2018 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted operating profit
Slide 5: Overview of our operating environment
Overview of our operating environment 115 Interims • Brexit and political uncertainty has continued to 110 impact corporate and consumer confidence in 105 the UK Rebased to 100 100 Exchange 95 rates 90 85 • The South African economy has been weak, 80 however the outlook has strengthened following 75
Slide 6: Overview of the year ending Mar 2018
Overview of the year ending 31 Mar 2018 • The Asset Management and Wealth & Investment divisions are expected to report results ahead of the prior year. Both divisions have benefitted from higher levels of average funds under management and strong inflows • The Specialist Banking business is expecte
Slide 7: Overview of the year ending Mar 2018
Overview of the year ending 31 Mar 2018 • 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 year • Recurring income as a percentage of total operating income is expected to be approximately 76%
Slide 8: Overview of the year ending Mar 2018
Overview of the year ending 31 Mar 2018 • For the period 31 Mar 2017 to 28 Feb 2018: - Third party assets under management increased 9.1% to £164.5bn o An increase of 8.0% on a currency neutral* basis - Core loans and advances increased 11.7% to £25.4bn o An increase of 9.5% on a currency neutral* b
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity Cash and near cash • The group has maintained strong liquidity levels • Advances as a percentage of customer deposits at 28 Feb 2018 was 81% (Mar 2017: 76%) Average Capital • Investec Limited CET1 ratio is expected to be slightly below the 10% target while Investec
Slide 10: Impairment trends
Impairment trends • The total income statement impairment charge is expected to be ahead of the prior year − Impairments on the UK legacy portfolio are expected to be significantly ahead of the prior year − Impairments in South Africa and the Ongoing UK business are expected to be ahead of the prior
Slide 11: Legacy portfolio
Legacy portfolio The legacy portfolio is expected to report a higher loss than the prior year as a result of additional impairments for accelerated exits that may occur on certain legacy assets Legacy portfolio total net loans £’mn 6,000 4 856 5,000 4,000 3,000 2 615 2 185 2,000 Other Private Bank a
Slide 12: Divisional Review
Out of the Ordinary® & Investec Divisional Review
Slide 13: Asset Management
Asset Management • AUM of £105.9bn as at 28 Feb 2018, up 11.1% Assets under management: since 31 Mar 2017 Since 31 Mar 2017: up 11.1% to £105.9bn - Up 9.9% on a currency neutral^ basis • Strong net inflows of £4.2bn to end of Feb 2018 £’bn • Earnings growth supported by market levels 120 and solid n
Slide 14: Wealth & Investment
Wealth & Investment • Overall performance of the global business Funds under management: expected to be ahead of the prior year Since 31 March 2017: up 5.8% to £57.9bn Up 4.6% on a currency neutral^ basis - Higher average funds under management £’bn - Solid underlying net inflows of £1.8bn 70 • Posi
Slide 15: Specialist Banking
Specialist Banking • Ongoing Specialist Bank results expected to be behind the prior year Net interest income Investment, associate, trading and other operating income • Net interest increase supported by book growth of 11.7% • Investment income expected to be well behind the prior year, while • Con
Slide 16: Additional Aspects
——, Out of the Ordinary® Additional Aspects & Investec
Slide 17: Other Information
Other Information • Effective tax rate: expected to be approximately 9% impacted by the release of provisions in South Africa which are no longer required • Net non-controlling interests of approximately £82mn (profits attributable) relating to the Asset Management business and the consolidation of
Slide 18: Conclusion
Out of the Ordinary® & Investec Conclusion
Slide 19: Conclusion
Conclusion • The group has achieved satisfactory operating performance against a challenging backdrop in our two core geographies • The UK economy has continued to be influenced by the complexities of Brexit, while the result of the December elective conference has since driven an improvement in the
Slide 20: Investor relations pre-close briefing
Investor relations pre-close briefing
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.co.za 21
Slide 22: Appendices
Out of the Ordinary® & Investec Appendices
Slide 23: Operating environment
Operating environment 28 Feb 2018 30 Sep 2017 31 Mar 2017 % move since Mar 2017 JSE ALSI 58,325 55,580 52,056 12.04% FTSE ALSI 3,982 4,050 3,990 (2.01%) SA Prime 10.25% 10.25% 10.50% (0.25%) UK Clearing Banks 0.50% 0.25% 0.25% 0.25% Year to date 28 Feb 2018 30 Sep 2017 31 Mar 2017 Currency per £1.00
Slide 24: Adjusted operating profit for the six months ended Sept 2017
Adjusted* operating profit for the six months ended 30 Sept 2017 £’000 UK & Other Southern Africa Total group Asset Management 49,949 33,284 83,233 Wealth & Investment 35,441 14,087 49,528 Specialist Banking 41,208 165,291 206,499 Specialist Banking - Ongoing 74,133 Specialist Banking - Legacy busin
Slide 25: 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 26: Investec Asset Management: assets under management
Investec Asset Management: assets under management £’million % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 Mar 2017 UK and international 69,385 64,912 61,379 13.0% - Mutual funds 29,921 26,290 23,399 27.9% - Segregated mandates 39,464 38,622 37,980 3.9% Southern Africa 36,511 33,314 33,908 7.7% - Mu
Slide 27: Investec Wealth & Investment: Funds under management
Investec Wealth & Investment: Funds under management £’million % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 Mar 2017 UK and Other 37,876 37,111 35,555 6.5% Southern Africa 20,071 18,344 19,218 4.4% Total 57,947 55,455 54,773 5.8% Investec Wealth & Investment UK and Other: Funds under management £’m
Slide 28: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 Mar 2017 Discretionary 116,049 117,086 109,869 5.6% Non-discretionary 209,799 214,942 212,412 (1.2%) Total 325,848 332,028 322,281 1.11% £’million % change YTD vs 28-Feb-18 30-Sep-17 31-Ma
Slide 29: Total group core loans
Total group core loans £’million % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 Mar 2017 UK and Other 9,684 8,900 8,621 12.3% Southern Africa 15,678 13,897 14,086 11.3% Total core loans 25,362 22,797 22,707 11.7% Home currency % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 ’million Mar 2017 Southern A
Slide 30: Total group customer deposits
Total group customer deposits £’million 28-Feb-18 30-Sep-17 31-Mar-17 % change YTD vs Mar 2017 UK and Other 11,123 10,841 11,013 1.0% Southern Africa 19,596 17,125 18,096 8.3% Total customer deposits 30,719 27,966 29,109 5.5% Home currency % change YTD vs 28-Feb-18 30-Sep-17 31-Mar-17 R’million Mar