Investec Plc · LSE:INVP
Investec — Corporate Update (March 2019)
28 slides from Investec's corporate update, Mar 15, 2019
Slide 1: Investor Pre-Close Briefing
INVESTOR PRE-CLOSE BRIEFING 15 March
Slide 2: Operational Review
OPERATIONAL REVIEW Out of the Ordinary 1% @ Investec
Slide 3: Recap of strategic priorities
Recap of strategic priorities Bank and Wealth Focused on enhancing effectiveness of operating platform to better serve clients and deliver long-term shareholder returns • Increase discipline in capital allocation • Manage the cost base for greater efficiencies • Accelerate revenue growth • Expanding
Slide 4: Overview of operating environment
Overview of operating environment 125% Half Year • The operating environment has remained 120% challenging over the period 115% Exchange 110% • Global equity markets experienced a rates 105% sharp decline at the end of the 2018 100% 95% calendar year before showing some 90% recovery £/AUD £/EUR £/ZA
Slide 5: Overall group performance for the year ending March 2019
Overall group performance for the year ending 31 March 2019 • Revenue is expected to be in line with the prior year • Substantial net inflows and sound loan book growth over the year • Annuity income as a percentage of total operating income is expected to be approximately 77% (2018: 76%) • The ECL
Slide 6: Snapshot of divisional results for the year ending March 2019
Snapshot of divisional results for the year ending 31 March 2019 Bank and Wealth • The Bank and Wealth business is expected to report results ahead of the prior year Asset Management • The Asset Management business is expected to report results marginally behind the prior year 6
Slide 7: Key earnings drivers
Key earnings drivers For the period 31 Mar 2018 to 28 Feb 2019: • Third party assets under management increased 1.9% to £163.7bn - An increase of 5.8% on a currency neutral* basis • Core loans and advances decreased 0.9% to £24.9bn - An increase of 6.0% on a currency neutral* basis • Customer accoun
Slide 8: Balance sheet overview
Balance sheet overview Liquidity Cash and near cash • The group has maintained solid liquidity levels • The loans to customer deposits ratio at 28 Feb 2019 was 78.2% (31 Mar 2018: 79.6%) Average Capital • Investec Limited and Investec plc CET1 ratios are expected to remain in line with the group’s t
Slide 9: Divisional Review
DIVISIONAL REVIEW 1% @ Investec
Slide 10: Bank and Wealth: Specialist Banking
Bank and Wealth: Specialist Banking The Specialist Bank results are expected to be well ahead of the prior year: − The UK Specialist Bank is expected to report results significantly ahead the prior year − The South African Specialist Bank is expected to report results behind the prior year Net inter
Slide 11: Bank and Wealth: Wealth & Investment
Bank and Wealth: Wealth & Investment Wealth & Investment Assets under management: Since 31 March 2018: down 4.0% to £53.8bn • The Wealth & Investment business is expected - down 0.6% on a currency neutral^ basis to report results behind the prior year £’bn • Net inflows of £0.5bn to end of Feb 2019
Slide 12: Asset management
Asset management • Substantial net inflows of £6.4bn to end of Feb Assets under management: 2019 Since 31 Mar 2018: up 5.2% to £109.2bn - up 9.2% on a currency neutral^ basis • Revenue growth was dampened by considerable market volatility during the second £’bn half of the year 120 100 • Earnings ha
Slide 13: Additional Aspects
ADDITIONAL ASPECTS Out of the Ordinary 1% @ Investec
Slide 14: Other Information
Other Information • Effective tax rate: expected to be approximately 13% compared to 9.6% in the prior year • Net non-controlling interests of approximately £91mn (profits attributable) relating to the Asset Management business and the consolidation of the Investec Property Fund • Weighted number of
Slide 15: Conclusion
CONCLUSION Out of the Ordinary 1% @ Investec
Slide 16: Conclusion
Conclusion • The group’s performance has been supported by growth in assets under management and substantial net inflows, good loan book growth, and significantly improved performance from the UK Specialist Banking business • The group is committed to a strategy of simplification, focus, and growth
Slide 17: Appendices
APPENDICES 7 Out of the Ordinary 1% @ Investec
Slide 18: 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 18
Slide 19: Operating environment
Operating environment 28 Feb 2019 30 Sep 2018 31 Mar 2018 % move since Mar 2018 JSE ALSI 58 325 55 709 55 475 5.1% FTSE ALSI 3 982 4128 3 894 2.3% SA Prime 10.25% 10.00% 10.00% UK Clearing Banks 0.75% 0.75% 0.50% Year to date 28 Feb 2019 30 Sep 2018 31 Mar 2018 Currency per £1.00 Close Ave Close Ave
Slide 20: Adjusted operating profit for the six months ended September 2018
Adjusted* operating profit for the six months ended 30 September 2018 £’000 UK & Other Southern Africa Total group Asset Management 56 840 34 686 91 526 Wealth & Investment 32 864 13 544 46 408 Specialist Banking 80 756 164 625 245 381 170 460 212 855 383 315 Group costs (17 227) (6 821) (24 048) To
Slide 21: Adjusted operating profit for the year ended March 2018
Adjusted* operating profit for the year ended 31 March 2018 £’000 UK & Other Southern Africa Total group Asset Management 103 918 74 127 178 045 Wealth & Investment 69 269 29 296 98 565 Specialist Banking 59 958 320 535 380 493 233 145 423 958 657 103 Group costs (33 789) (15 809) (49 598) Total gro
Slide 22: Specialist Banking: core loans
Specialist Banking: core loans £’million % change YTD vs Mar 28-Feb-19 30-Sep-18 31-Mar-18 2018 UK and Other 10 510 10 056 9 687 8.5% Southern Africa 14 401 14 134 15 445 (6.8%) Total core loans 24 911 24 190 25 132 (0.9%) Home currency % change YTD vs Mar 28-Feb-19 30-Sep-18 31-Mar-18 R’million 201
Slide 23: Specialist Banking: customer deposits
Specialist Banking: customer deposits £’million % change YTD vs Mar 28-Feb-19 30-Sep-18 31-Mar-18 2018 UK and Other 13 230 12 362 11 624 13.8% Southern Africa 18 094 17 987 19 363 (6.6%) Total customer deposits 31 324 30 349 30 987 1.1% Home currency % change YTD vs Mar 28-Feb-19 30-Sep-18 31-Mar-18
Slide 24: Wealth & Investment: assets under management
Wealth & Investment: assets under management £’million % change YTD 28-Feb-19 30-Sep-18 31-Mar-18 vs Mar 2018 UK and international 37 544 39 355 36 923 1.7% -Discretionary 30 078 31 108 28 638 5.0% -Non-discretionary 7 466 8 247 8 285 (9.9%) Southern Africa 16 239 17 332 19 125 (15.1%) -Discretionar
Slide 25: Asset Management: assets under management
Asset Management: assets under management £’million % change YTD 28-Feb-19 30-Sep-18 31-Mar-18 vs Mar 2018 UK and international 74 267 74 978 69 371 7.1% - Mutual funds 29 623 30 351 29 615 0.0% - Segregated mandates 44 644 44 627 39 756 12.3% Southern Africa 34 974 34 226 34 491 1.4% - Mutual funds
Slide 26: Proviso
Proviso Profit forecasts for the group, Bank and Wealth and Asset Management • The following matters as discussed in the briefing and highlighted above contain forward-looking statements: − the group’s operating profit (refer to the definition in the notes) is expected to be ahead of the prior year;
Slide 27: Proviso (cont'd)
Proviso (cont’d) Assumptions The Profit Forecast has been prepared on the basis of the following assumptions during the forecast period: Factors outside the influence or control of the Investec Board: • There will be no material change in the political and/or economic environment that would material
Slide 28: Proviso (cont'd)
Proviso (cont’d) Definitions • References to operating profit relate to adjusted operating profit, where adjusted operating profit refers to net profit before tax, goodwill, acquired intangibles and non- operating items but after adjusting for earnings attributable to other non-controlling interests