Slide 1: Investor pre-close briefing
IInvestor t pre-close l briefing 15 March 2012 Proviso • Please note that matters discussed in today’s presentation may contain forward looking statements which are subject to various risks and uncertainties t i ti and d other th ffactors, t i l di including, b butt nott lilimited it d tto: – the fu
Slide 2: Operational review
Operational review • Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the eleven month period to 29 Feb 2012 and compare 1H2012 vs 2H2012 • p References to operating gp profit relate to normalised* operating p gpprofit. Trends within the divisional s
Slide 3: Overview of the year ending 31 Mar 2012
Overview of the year ending 31 Mar 2012 • Volatile markets and low levels of activity have characterised the second half of the group’s 2012 financial year • While earnings from principal activities are expected to decrease substantially, the Specialist Banking businesses are expected to benefit fro
Slide 4: Overview of the year ending 31 Mar 2012
Overview of the year ending 31 Mar 2012 • Recurring income as a percentage of total operating income is expected to be approximately 68% (2011: 62%) • Operating income is expected to decline 2% to 3% arising from: – A substantial decline in income from principal transactions – An increase in net int
Slide 5: Cash balances remain strong; Capital and ROE targets
Cash balances remain strong • Continue to focus on: Cash and near cash – diversifying funding sources – limiting concentration risk ££'mn mn – reduced reliance on wholesale 11,000 10,000 funding 9,000 – building our retail franchise 8,000 7,000 – reducing d i costt off liabilities li biliti 6,000 5,
Slide 6: Impairment trends
Impairment trends • Impairments p on core loans are expected p Impairment analysis to be lower than the prior year, with a significant decrease compared to the £’mn 250 2H2011 • Impairments in Australia remain high as 200 a decision has been taken to clear the 150 non-core portfolio as soon as possi
Slide 7: Asset Management; Wealth & Investment
Asset Management • Solid long term performance Assets under management: across investment capabilities Since 31 Mar 2011: up 6% to £62.3bn £’bn £ bn • Strong net inflows in excess of 70 £4.5bn 60 50 • Financial performance in line 40 with 1H2012 but behind 30 2H2011 mainly due to lower 20 abso u e p
Slide 8: Property Activities; Private Banking
Property Activities • Performance in line with expectations but substantially lower than the prior year 15 Private Banking • The core private banking Loans: since 31 Mar 2011: flat at £13.3bn business has returned to Deposits: since 31 Mar 2011: up 2% to £12.7bn profitability benefiting from: £’bn 1
Slide 9: Investment Banking; Capital Markets
Investment Banking • Weak market conditions resulted in a subdued overall performance • UK p performing g marginally g y behind the p prior yyear: – Reasonable performance in Corporate Finance – Improved performance in the Principal Investment portfolio – Weaker performance from securities activitie
Slide 10: Other Activities
Other Activities • Central Funding: – South Africa marginally behind the prior year – UK significantly behind the prior year largely due to debt buy-back profits of £32mn earned in Feb 2011 not repeated p p in current yyear • C t lC Central Costs t hhave d declined li d iin relation l ti tto th the
Slide 11: Other information
Other information • Effective tax rate: expected to be approximately 18.5% • Non Non-operational operational integration costs with respect to the acquisition of the Evolution Group plc expected to be approximately £13mn • Weighted number of shares in issue for the year ending 31 Mar 2012 expected t
Slide 12: Conclusion
Conclusion • The year under review has echoed the difficulties of the broader environment • We will continue to leverage off our existing platforms, platforms seeking to create additional operational efficiencies and organic growth opportunities across all the geographies in which we operate • Asset
Slide 13: Appendices: Operating environment
Appendices Operating environment % move 29 Feb 2012 30 Sep 2011 31 Mar 2011 since Mar 2011 JSE ALSI 34,215 29,674 32,204 6.2% FTSE ALSI 3,072 2,654 3,068 0.1% Australian All Ord 4,351 4,070 4,929 -11.7% SA Prime 9.00% 9.00% 9.00% - UK Clearing Banks 0.50% 0.50% 0.50% - RBA cash rate target 4.25% 4.7
Slide 14: Normalised operating profit
Normalised* operating profit: For the six months ended 30 September p 2011 UK & Europe Southern Africa Australia Total group £’000 Asset Management 28,401 37,177 - 65,578 Wealth & Investment 13,217 8,571 - 21,788 Property Activities (20) 10 453 10,453 1 255 1,255 11 688 11,688 Private Banking 3,779
Slide 15: Asset management AUM; Wealth & Investment SA FUM
Investec Asset Management: assets under management* % Change 29 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs £'million 2012 2011 2011 2010 2010 Mar 2011 UK and international , 36,075 29,171 , 30,765 , 23,727 , 21,666 , 17.3% Mutual funds 17,617 14,031 15,402 12,451 11,064 14.4% Segregated mandates 18,458
Slide 16: Wealth & Investment Non-SA funds under management
Wealth & Investment Non-SA: funds under management % Change 29 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs £'million 2012 2011 2011 2010 2010 Mar 2011 IWI - Discretionaryy 9,813 , 8,924 , 9,571 , 8,818 , 8,517 , 2.5% - Non-discretionary 3,023 2,826 3,164 3,077 3,082 (4.5%) - Other* - - - 896 1,300 - Tota
Slide 17: Private Banking deposits; Capital Markets loans and advances
Private Banking: retail deposits % Change 29 Feb 30 Sep 31 Mar 30 Sep 31 Mar YTD vs £'million 2012 2011 2011 2010 2010 Mar 2011 UK and Europe 6,235 6,063 6,100 6,127 6,308 2.2% South Africa 5,112 4,749 5,154 4,902 4,607 (0.8%) Australia 1,326 1,186 1,211 1,127 851 9.5% Total deposits 12 673 12,673 1
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 – SA: +27 (0) 11 286 7070 • E-mail: investorrelations@investec.com 35 IInvestor t pre-close l briefing 15 March 2