Investec plc · LSE:INVP
Investec — Corporate Update (May 2021)
34 slides from Investec's corporate update, May 21, 2021
Slide 1: Investec plc Business update
Investec plc Business update 21 May 2021
Slide 2: Market Position
Market Position Uniquely positioned in between mass consumer banking and multi-national corporate banking with a strong wealth and investment proposition DOMESTICALLY RELEVANT, INTERNATIONALLY CONNECTED Recognisable brand in a large and growing UK domestic market FOR CORPORATE CLIENTS LOOKING FOR A
Slide 3: Differentiation through capabilities is clear
Differentiation through capabilities is clear Business – Depth of products and services We have both scale and differentiation Personal – Depth of products and services Investec 3
Slide 4: Domestically relevant, internationally connected
Domestically relevant, internationally connected Investec is a substantial business generating revenues of £963mn for the 12 months to 31 March 2021, ranking number 9 in terms of revenue 36.9 21.8 15.1 Ranking 10.8 by Revenues 4.0 3.1 1.4 0.9 0.9 0.9 0.7 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.3 0.3 (£’bn) As
Slide 5: Balanced business model
Balanced business model Focused on growing capital light businesses Investec PLC revenue composition and ROE Capital light activities Balance sheet driven activities Includes: 1.2 12.0 % Includes: £ billion • Wealth management • Lending portfolios • Advisory services • Trading income largely from cl
Slide 6: Specialist Bank – UK & Other
UK & Other Specialist Bank – Ruth Leas, Chief Executive
Slide 7: Journey to deliver improved shareholder returns
Journey to deliver improved shareholder returns Simplify Focus Delivery Deliver FY21 FY22/23 FY24+ Growth Growth Growth “One Investec” Client ecosystem ROE ROE 10%-13% in medium 10%-13% in medium term term Cost to [Right talent reduction execute and deliver] Efficiencies C:I C:I Ratio Ratio <65% <65
Slide 8: Significant actions to simplify and focus
Significant actions to simplify and focus Capital allocation Building scale and relevance for client franchises in the UK Wind down & Closed Rationalised Exit of exit of Exited Fund Resource Hong Kong Australia Financial Solutions US Finance UK activities Products Domestically relevant, internationa
Slide 9: Journey to deliver improved shareholder returns
Journey to deliver improved shareholder returns Simplify Focus Delivery Deliver FY21 FY22/23 FY24+ Growth Growth Growth “One Investec” Client ecosystem ROE ROE 10%-13% in medium 10%-13% in medium term term Cost to [Right talent reduction execute and deliver] Efficiencies C:I C:I Ratio Ratio <65% <65
Slide 10: Resilient FY21 | Well positioned for growth
Resilient FY21| Well positioned for growth Mar 2019 Mar 2020 Mar 2021 Operating profit pre-Financial Products run down £192mn £132mn £138mn ROE / C:I 11.2% / 72.1% 8.0% / 68.4% 5.6% / 70.7% pre-Financial Products run down Financial Products run down - (£29mn) (£93mn) Operating profit £192mn £103mn £
Slide 11: Book growth and diversity
Book growth and diversity Solid book growth Diversified loan book in FY21 13.0 £12.3bn 33% 50% HNW & other 12.0 £11.8bn Corporate & Private Client Other Lending Lending 11.0 £12.3bn £10.5bn Credit loss Book (£bn) ratio of 0.56% 10.0 £9.7bn 17% Lending 9.0 Collateralised £8.5bn by Property 8.0 Asset
Slide 12: Strong market position; uniquely positioned
Strong market position; uniquely positioned UK Banking Market Private UK Retail- Global Private Companies Equity Led Volume Large-Cap Wealth Banking Listed Companies Market for Business Builders - Growth Orientated Mindset - Investec Logos are of illustrative competitors (non-exhaustive) 12
Slide 13: Growing by meeting personal and business needs
Growing by meeting personal and business needs My Personal Needs My Business Needs Private Private Equity Companies Specialist Wealth Banking Industry Groups Listed Companies Strong and reinforcing client franchises Investec 13
Slide 14: Delivering a breadth of capabilities
Delivering a breadth of capabilities My Personal Needs My Business Needs Private Private Companies Equity Specialist Wealth Banking Industry Groups Listed Companies Early Growth Expansion Scale growth Business and Personal wealth creation CAPITAL (EQUITY AND DEBT) ADVISORY Delivered by our people wh
Slide 15: Private Clients
Private Clients Now positioned for accelerated growth Franchise Growth £3.1bn Large addressable market 3.0 Book (£bn) £2.3bn 90,000 UK individuals meet the target criteria* 2.0 £1.7bn £1.3bn £0.9bn Fully invested 1.0 Invested in talent, platforms, marketing and digital 0.0 FY17 FY18 FY19 FY20 FY21 M
Slide 16: Private Companies
Private Companies Scale of this underserviced market represents significant opportunity for growth Franchise Growth 2.5 £2.2bn Scale of UK private companies market 2.0 £1.9bn £2.0bn £1.7bn Book (£bn) 20,000 UK private companies identified as potential new corporate clients 1.5 £1.1bn 1.0 Breadth of
Slide 17: Private Equity
Private Equity Low capital, low cost intensity model for growth Franchise Growth £2.5bn Large addressable market 2.5 £2.4bn c. 200 Funds active across the UK, Benelux and DACH regions £2.2bn £2.0bn £2.0bn 2.0 Book* (£bn) Fully integrated Scale & diversified client proposition – capital & advice 1.5
Slide 18: Listed Companies
Listed Companies Market leading broker poised for further growth Franchise Growth 140 Top ranked UK Broker 134 Raised £3.5bn in equity fundraisings across 30 corporate clients in FY21 130 124 Breadth of capabilities # corporate clients 120 ‘Not just a broker’ – 39% multi-product clients Growing to p
Slide 19: Specialist Industry Groups
Specialist Industry Groups Deep sector expertise in our award-winning Specialist areas Aviation Power & Infrastructure Finance Real Estate Recognised international leader US & UK strength UK-focused Market recovery opportunity Strong thematic growth Resilient target market Global airlines & lessors
Slide 20: Highly successful origination and distribution capability
Highly successful origination and distribution capability Aviation Power & Infrastructure Finance Real Estate Private Equity Private Companies Broadening our pipeline of opportunities Increasing velocity Driving enhanced returns Number of deals sold Total sell-downs Total Non-interest Income Fundrai
Slide 21: Delivering sustainable and enhanced shareholder returns
Delivering sustainable and enhanced shareholder returns Priorities Proposition Delivery Focused on Clients Target ROE Growth Initiatives 10% to 13% in medium-term Cost Management Capital Discipline Target C:I <65% in medium-term Digitisation Connectivity CET1 ratio target >10% Focused on Execution I
Slide 22: Conclusion
Conclusion Simplify Focus Deliver Established with the Generate enhanced Focused and simplified capabilities and talent to shareholder value deliver Strong market position; uniquely positioned Investec 22
Slide 23: Wealth and Investment – UK & Other
UK & Other: Wealth and Investment – Ciaran Whelan, Chief Executive
Slide 24: Our business model
Our business model Clients Private clients Intermediaries Charities Investment Management Discretionary Advisory Execution Only Manage clients portfolios Client retains full control and is responsible Transactions undertaken on an on their behalf for all investment decisions “execution only” basis D
Slide 25: Market context
Market context UK Market Landscape Industry Reactions UK Long-Term Savings Assets under Administration Recent Deals Vertically integrated Growing appetite for in-house financial planning Other 12% 27% Financial Expansion of intermediary channel Planning – Outsourced Discretionary Fund Management
Slide 26: Unique market positioning drives competitive advantage in the UK market
Unique market positioning drives competitive advantage in the UK market One of the largest Wealth Managers in the UK Our key differentiators £’bn Funds under management • Single consistent global investment process, delivering tailor-made and innovative solutions across jurisdictions 140 129.3 119.9
Slide 27: Wealth industry drivers
Wealth industry drivers Wealth Industry Drivers IW&I Response Building Financial Advice capability Evolving client attitudes and preferences Fulfilling ‘One Investec’ ambitions Skills and development Move to attract growing client segments: Demographics e.g. HNW, Next Generation and female wealth In
Slide 28: Holistic advice is key to our strategy
Holistic advice is key to our strategy We offer restricted initial and ongoing financial planning advice UK & Channel Islands business • Expand financial planning and advice capabilities • Deliver as a central component of our offering £3.5bn 3,600 Our AuA Clients • Wealth planning pilot to scale ad
Slide 29: Business snapshot
Business snapshot A leading private client wealth manager in the UK with £41.7bn funds under management • Financial planning advice Our service offering Total FUM £41.7bn1 • Investment management, including bespoke portfolio management % UK Discretionary 86% • Private clients, including HNW and Inte
Slide 30: Strategic outlook
Strategic outlook Our ambition: Trusted Advisor with breadth and depth of proposition 5 Driving multichannel distribution strategy Direct | IFAs | UK Bank 4 Build deeper alternative and ESG solutions 3 Cost containment 2 Attract growing client segments 1 Advice-led proposition with broader product I
Slide 31: UK Wealth & Investment | Investment proposition
UK Wealth & Investment | Investment proposition STRONG NEW LEADERSHIP TEAM EMPOWERING CULTURE STRONG BRAND EQUITY IN A GROWING MARKET Recognised international brand which attracts investment managers and supports client acquisition EVOLUTION TO ADVICE-LED BUSINESS Developing financial planning and a
Slide 32: Closing Remarks – Ciaran Whelan
Closing Remarks– Ciaran Whelan
Slide 33: Closing observations
Closing observations STRONG BRAND EQUITY IN A GROWING MARKET SHIFTING REVENUE MIX TO ANNUITY INCOME EVOLUTION IN RISK APPETITE CONNECTED CLIENT ECOSYSTEM LEVERAGING INVESTED CAPITAL IN PRIVATE BANKING Investec 33
Slide 34: Thank you
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