Investec Plc · LSE:INVP
Investec — Corporate Update (March 2016)
31 slides from Investec's corporate update, Mar 18, 2016
Slide 1: Investor pre-close briefing
Investor pre-close briefing 18 March 2016
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® an ‘? Investec
Slide 4: Proviso: basis of figures and reporting date
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the eleven month period to 29 Feb 2016 and compare 1H2016 vs 2H2016 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted ope
Slide 5: Overview of the operating environment
Overview of the operating environment • The second half of the group’s financial year has seen increased macro uncertainty in our key operating geographies • Currency and equity market weakness and volatility over recent months have impacted our overall results, particularly our Wealth & Investment
Slide 6: Overview of the year ending March 2016
Overview of the year ending 31 Mar 2016 • The Specialist Banking business is expected to report results ahead of the prior year: ‒ The UK Specialist Banking business is expected to report results substantially higher than the prior year ‒ The South African Specialist Banking business is expected to
Slide 7: Overview of the year ending March 2016
Overview of the year ending 31 March 2016 • Overall group results have been negatively impacted by the depreciation of the average Rand: Pounds Sterling exchange rate of approximately 17% over the period • Adjusted operating profit* is expected to be marginally ahead of the prior year in Pounds Ster
Slide 8: Overview of the year ending March 2016
Overview of the year ending 31 March 2016 • For the period 31 Mar 2015 to 29 Feb 2016: – Third party assets under management decreased 6% to £116.2bn o flat on a neutral currency^ basis – Customer accounts (deposits) increased 2% to £23.0bn o an increase of 14% on a neutral currency^ basis – Core lo
Slide 9: Balance sheet soundness
Balance sheet soundness Liquidity and funding • The group remains very liquid Cash and near cash • We have continued to see good £'mn progress from Investec Cash 12,000 Investments in South Africa leading 10,000 Average to higher cash balances 8,000 • The cost of funds has remained 6,000 broadly sta
Slide 10: Impairment trends
Impairment trends • The total income statement impairment charge is expected Impairment analysis to be approximately 20% lower £’mn than the prior year 350 300 • Impairments on the UK legacy 250 portfolio continue to decline 200 150 • Impairments in South Africa are 100 expected to be ahead of the 5
Slide 11: Loan book growth
Loan book growth UK and Other Southern Africa Loan book at Feb 2016: £7 959mn £’mn Loan book at Feb 2016: R219bn R’bn Total growth from Mar 15 to Feb 16 900 Total growth from Mar 15 to Feb 16 37 (rounded to closest million) (rounded to closest billion) Mortgage loans to private clients 200 Mortgage
Slide 12: Divisional review
Divisional review Out of the Ordinary® an ‘? Investec
Slide 13: Asset Management
Asset Management • Positive net inflows of £3.2bn to end of Feb 2016 Assets under management: Since 31 Mar 2015: down 7% to £72.4bn • Earnings negatively impacted by - flat on a neutral currency^ basis market and currency movements £’bn 90 80 • The UK & International business 70 is expected to repor
Slide 14: Wealth & Investment
Wealth & Investment • Solid net inflows of £1.2bn to end of Feb 2016 Funds under management: Since 31 Mar 2015: down 6% to £43.2bn - flat on a neutral currency^ basis • Funds under management £’bn negatively impacted by weaker 50 equity markets 45 40 35 30 • Overall performance of the 25 global busi
Slide 15: Specialist Banking – Ongoing business
Specialist Banking – Ongoing business • The Ongoing Specialist Bank is performing ahead of the prior year Net interest margin Investment and trading income • Net interest increase in the ongoing UK and South • Investment income ahead of the prior year: African businesses supported by book growth of
Slide 16: Specialist Banking – UK legacy business
Specialist Banking – UK legacy business • The Legacy business is expected to report a smaller loss than the prior year as a result of an overall reduction in both impairments and costs • Impairments marginally ahead of 1H2016 due to accelerated clearance of the Irish planning portfolio Legacy portfo
Slide 17: Additional aspects
Additional aspects Out of the Ordinary® an ‘? Investec
Slide 18: Other information
Other information • Effective tax rate: expected to be approximately 19% - 20% • Net non-controlling interests of approximately £43mn (profits attributable) relating to the Asset Management business, FX hedge accounting and the consolidation of the Property Fund • Weighted number of shares in issue
Slide 19: Conclusion
Conclusion Out of the Ordinary® an ‘? Investec
Slide 20: Conclusion
Conclusion • We are positive about our current positioning and believe we are winning market share as evidenced by the neutral currency growth in our key earnings drivers • We have a solid client franchise and continue to make progress in the roll out of our digital strategy • Our diversified and ba
Slide 21: Investor pre-close briefing
Investor pre-close briefing 18 March 2016
Slide 22: 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.com 22
Slide 23: Appendices
Appendices Out of the Ordinary® an ‘? Investec
Slide 24: Operating environment
Operating environment 29 Feb 30 Sep 31 Mar % move since 2016 2015 2015 Mar 2015 JSE ALSI 49,415 50,089 52,182 (5.3%) FTSE ALSI 3,346 3,336 3,664 (8.7%) SA Prime 10.25% 9.50% 9.25% 0.75% UK Clearing Banks 0.50% 0.50% 0.50% - Year to date 29 Feb 2016 30 Sep 2015 31 Mar 2015 Currency per £1.00 Close Av
Slide 25: Adjusted operating profit: six months ended Sep 2015
Adjusted* operating profit: For the six months ended 30 Sep 2015 £’000 UK & Southern Total group Other Africa Asset Management 40,127 30,427 70,554 Wealth & Investment 25,896 11,954 37,850 Specialist Banking 63,263 130,389 193,652 Specialist Banking - Ongoing 98,786 Specialist Banking - Legacy busin
Slide 26: Adjusted operating profit: year ended Mar 2015
Adjusted* operating profit: For the year ended 31 Mar 2015 £’000 UK & Southern Total group Other Africa Asset Management 75,491 73,484 148,975 Wealth & Investment 56,871 21,910 78,781 Specialist Banking 41,795 262,918 304,713 Specialist Banking - Ongoing 129,341 Specialist Banking - Legacy business
Slide 27: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 29 Feb 30 Sep 31 Mar 30 Sep % change 2016 2015 2015 2014 YTD vs Mar 2015 UK and international 49,449 47,327 50,622 46,175 (2.3%) - Mutual funds 17,620 18,102 19,398 17,372 (9.2%) - Segregated mandates 31,829 29,225 31,224 28,803 1.9% Sout
Slide 28: Investec Wealth & Investment: Funds under management
Investec Wealth & Investment total: Funds under management £’million 29 Feb 30 Sep 31 Mar 30 Sep % change 2016 2015 2015 2014 YTD vs Mar 2015 UK and Other 29,162 28,451 29,562 27,443 (1.4%) Southern Africa 14,024 14,899 16,514 15,149 (15.1%) Total 43,186 43,350 46,076 42,592 (6.3%) Investec Wealth &
Slide 29: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 29 Feb 30 Sep 31 Mar 30 Sep % change 2016 2015 2015 2014 YTD vs Mar 2015 Discretionary 100,950 94,883 89,382 81,798 12.9% Non-discretionary 208,958 217,243 207,379 195,890 0.8% Total 309,908 312,126 296,761 277,688 4.4% £’million 29 F
Slide 30: Total group core loans
Total group core loans £’million 29 Feb 30 Sep 31 Mar 30 Sep % change 2016 2015 2015 2014 YTD vs Mar 2015 UK and Other 7,959 7,210 7,061 6,678 12.7% Southern Africa 9,911 9,520 10,128 9,303 (2.1%) Total core loans 17,870 16,730 17,189 15,981 3.9% Home currency 29 Feb 30 Sep 31 Mar 30 Sep % change ’m
Slide 31: Total group customer deposits
Total group customer deposits £’million 29 Feb 30 Sep 31 Mar 30 Sep % change 2016 2015 2015 2014 YTD vs Mar 2015 UK and Other 10,475 9,719 10,298 10,382 1.7% Southern Africa 12,540 11,940 12,317 11,871 1.8% Total customer deposits 23,015 21,659 22,615 22,253 1.8% Home currency 29 Feb 30 Sep 31 Mar 3