Investec Plc · LSE:INVP
Investec — Investec Bank — Investor Presentation (January 2020)
31 slides from Investec's investor presentation, January 2020
Slide 1: UK Specialist Bank January 2020
UK Specialist Bank January 2020 Ruth Leas, Ryan Tholet, Chris Meyer
Slide 2: Agenda
Agenda 1 UK Specialist Bank: Leadership team and overview 3-4 2 UK Specialist Bank: Investment proposition 5-15 3 Private Banking: Additional detail 17-22 4 Corporate and Investment Banking: Additional detail 23-31 Page 2
Slide 3: UK Specialist Bank: Leadership team
UK Specialist Bank: Leadership team Ruth Leas CEO of Investec Bank plc, Head UK Specialist Bank Chris Meyer Executive Director of Investec Bank plc, Head UK Corporate and Investment Banking Ryan Tholet Executive Director of Investec Bank plc, Head UK Private Banking Page 3
Slide 4: UK Specialist Bank: Overview
UK Specialist Bank: Overview UK Specialist Bank contribution to the Group We are a full-service bank, working with 200,000+ clients, from individuals through to private companies, larger corporates and institutions, supported by c. 2,400 talented out of the ordinary people based in 12 different coun
Slide 5: UK Specialist Bank: Investment proposition
UK Specialist Bank: Investment proposition Domestically relevant in the UK, internationally connected 1 Business uniquely positioned in the UK market 2 Established, full service Corporate and Investment Banking delivering strong growth 3 Private Banking fully invested – now in leverage and growth ph
Slide 6: Uniquely positioned in the UK market
Uniquely positioned in the UK market We are uniquely positioned in a segment of the market where we have strong competitive advantage with our full service offering UK Specialist Bank Investment Banking Corporate Banking Private Banking Retail Banking For UK listed corporates and financial sponsor-
Slide 7: Established, full-service CIB offering…
Established, full-service CIB offering… Consistently contributed c.35-40% of Global Specialist Bank revenues • Specialist sector clients • Private companies • 300 customers • 70,000 customers International Corporate • 35-40% of CIB revenues • 25% of CIB revenues specialist Banking franchises Investm
Slide 8: Established, full-service Corporate and Investment Banking (CIB) offering…
Established, full-service Corporate and Investment Banking (CIB) offering… CIB focused on deepening well-established franchises and balancing fees and lending CIB Sustainable earnings CIB Loan book growth CIB Revenue mix £bn 2% 3% 7 100% 4% 9% 9% 9% 8% 10% 9% 6.3 12% 13% 13% 20% 20% 5.9 90% 6 21% 38
Slide 9: …now delivering on growth strategy
…now delivering on growth strategy Key CIB growth drivers 1 2 3 4 Building on the strength of our Converting our unique existing Corporate Banking Strengthening the reputation of Creating a differentiated Investment Banking proposition franchises, focused on high- our International Specialist Fund M
Slide 10: Private Banking fully invested – now in leverage and growth phase
Private Banking fully invested – now in leverage and growth phase Private Banking in the UK - strong growth across all three client groups, which is a reflection that our proposition is resonating in the market High Net Worth client growth SA client growth Savings client growth clients earning £300k
Slide 11: Private Banking fully invested – now in leverage and growth phase
Private Banking fully invested – now in leverage and growth phase Private Banking in the UK currently leveraging new operating capabilities and driving sustainable growth UK Private Banking Loan Book growth Retail Funding from UK Private Banking £mn £mn 7,000 2.00% 10,000 1.8% 6,000 1.6% 1.6% 1.6% 8
Slide 12: Private Banking fully invested – now in leverage and growth phase
Private Banking fully invested – now in leverage and growth phase c. £67mn invested, now scaling and driving further client acquisition, loan book growth and funding Repositioning the portfolio to £mn current target market We are here Rev. Costs Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 2022
Slide 13: Diversified revenue mix provides sustainable earnings through economic cycles
Diversified revenue mix provides sustainable earnings through economic cycles Diversified, quality revenue mix contributing to sustainability of earnings Evolution of revenue mix • Increased level of annuity* income • Diversified, quality revenue mix - Annuity income* Annuity income* increase in qua
Slide 14: Current cost base sufficient to support the three year growth plan
Current cost base sufficient to support the three year growth plan Strategic realignment of business and infrastructure to meet our targets Costs and cost to income ratio • A clear path for achieving our £’mn targets: 600 100% – Investment 2% CAGR since 2011 (H1 20 annualised) in our Private Banking
Slide 15: Clear path to achieving ROE targets
Clear path to achieving ROE targets ROE track record of ongoing business excluding Banking proposition is within target range UK Specialist Bank ROE trend* • A clear path for achieving our targets: – Delivering scale while maintaining cost discipline 13.8% – Increasing capital light 13.5% revenue Ac
Slide 16: Agenda
Agenda 1 UK Specialist Bank: Leadership team and overview 3-4 2 UK Specialist Bank: Investment proposition 5-15 3 Private Banking: Additional detail 17-22 4 Corporate and Investment Banking: Additional detail 23-31 Page 16
Slide 17: UK Private Banking: Overview
UK Private Banking: Overview HNW offering Retail offering • Client led (not product) • Product led Our value proposition • High touch, relationship based • High tech, digital, self service • Expertise and speed • Innovative products Ambition • To build an aspirational HNW private bank which facilita
Slide 18: UK Private Banking: Clearly defined UK HNW target market
UK Private Banking: Clearly defined UK HNW target market Our proposition is aligned with a clearly defined target client base Size of opportunity in the UK*… 296,000 meet NAV criteria £3mn NAV Quantitative + criteria 178,000 £300k earnings Allows us to deal directly with meet NAV + clients, avoiding
Slide 19: UK Private Banking: Clear HNW opportunity in UK market
UK Private Banking: Clear HNW opportunity in UK market Traditional Retail Banks A different kind of private bank Traditional Private Banks For customers that need For clients that need a risk-partner For clients that need a homogenous product to grow their wealth wealth preservation • High volume an
Slide 20: UK Private Banking: Fully invested for the future
UK Private Banking: Fully invested for the future We have invested in talent, platforms, marketing and digital and now have a strong base on which to operate more efficiently and grow our business Stable headcount Invested into new Banking proposition and operational platforms Headcount # FTE Curren
Slide 21: UK Private Banking: Our strategic growth levers
UK Private Banking: Our strategic growth levers Our current focus is now on leveraging our new operating capabilities to drive growth across the following: Client acquisition Loan Book Growth Private Banking Deposits We are successfully growing three We have grown and diversified our We are building
Slide 22: UK Private Banking: Serving distinct, yet overlapping audiences
UK Private Banking: Serving distinct, yet overlapping audiences In Private Banking we serve a range of distinct, yet overlapping target audiences – with a growing client base of almost 75,000 Each client group serves a strategic purpose both for the UK Private Bank and the Group more broadly: c. 4,6
Slide 23: Corporate and Investment Banking: Overview
Corporate and Investment Banking: Overview We are a refreshingly human, full service Corporate & Investment Banking business, offering clients a range of capital, advisory and treasury solutions to support them on their growth path. Private Listed companies UK companies & sponsor-backed 70,000 custo
Slide 24: Corporate Banking: A leading, client-centric UK mid-market SME proposition
Corporate Banking: A leading, client-centric UK mid-market SME proposition Delivering a ‘private banking’ experience with investment banking quality of advice and service Our Corporate Banking market positioning Our focus: High-growth UK private companies Specialists Our differentiation: Agile, pers
Slide 25: Corporate Banking: Refreshingly human, high-tech proposition
Corporate Banking: Refreshingly human, high-tech proposition A Corporate Banking business that offers small to mid-sized companies the breadth of products and level of service that reflects their importance to the UK economy Capital Treasury Risk Management and Advisory Lending capability across ass
Slide 26: Corporate Banking: Growth drivers
Corporate Banking: Growth drivers A Corporate Banking business that offers small to mid-sized companies the breadth of products and level of service that reflects their importance to the UK economy Our focus Acquiring high-growth clients and deepening relationships with existing clients (currently 7
Slide 27: Investment Banking: Tailored offering to meet the needs of UK mid-market
Investment Banking: Tailored offering to meet the needs of UK mid-market Boutique service with ‘bulge bracket’ capability and award-winning franchises FTSE 250 brokerships • Tailored offering to meet the needs of UK mid-market corporates and financial sponsors Top 3 in market • We offer the capabili
Slide 28: Specialist international franchises: expertise and innovation
Specialist international franchises: expertise and innovation Differentiated by our deep expertise, relationships and ability to innovate alongside clients • Capital, advisory, risk management and treasury services • Operating across Europe, the US, Australasia and Africa • Providing tailored soluti
Slide 29: Specialist sectors: Our Fund Finance franchise
Specialist sectors: Our Fund Finance franchise Our Fund Finance franchise has evolved over 10 years into a global team that accounts for approximately 10% of the UK Bank’s loan book Our business in numbers What we do Who we are >£9bn Loans advanced 300 Global Partner of choice Lending facilities a y
Slide 30: Specialist sectors: Our Aviation franchise
Specialist sectors: Our Aviation franchise Building a world-leading aviation franchise Client • Well-established aviation franchise built on deep sector expertise and client franchise relationships Over $7.8bn of aircraft arranged and financed since 2014, including: • Qatar: arranged financing for 1
Slide 31: Specialist sectors: Distribution capability supports our sector franchises
Specialist sectors: Distribution capability supports our sector franchises Highly successful origination and distribution capability and growing fund management capability Raises Allows us to Provides Generates Investec’s Enhances punch above Increases client Maintains valuable market additional pro