Investec Plc · LSE:INVP
Investec — Investor Presentation (September 2013)
30 slides from Investec's investor presentation, Sep 17, 2013
Slide 1: Investor pre-close briefing
Investor pre pre-close close briefing 17 September 2013 1
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
Out of the Ordinary® o Investec Operational review ——_—
Slide 4: Proviso: basis of figures in the operational review
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 Aug 2013 and compare 1H2014 vs 1H2013 • References to operating profit relate to normalised* operating profit. Trends within the divisional sections relate to normalised o
Slide 5: Overview of the six months to 30 Sep 2013
Overview of the six months to 30 Sep 2013 • The Asset Management and Wealth and Investment businesses have continued to see net inflows and have benefited from higher average funds under management, both divisions are expected to record results ahead of the prior year • The Specialist Banking busine
Slide 6: Overview of the six months to 30 Sep 2013
Overview of the six months to 30 Sep 2013 • Against this backdrop, operating profit* is expected to be marginally behind the prior year. An increase of approximately 8% in Rands • Revenue (net of depreciation on operating leased assets) is expected to be in line with the prior year • Recurring incom
Slide 7: Overview of the six months to 30 Sep 2013
Overview of the six months to 30 Sep 2013 • For the period 31 Mar 2013 to 31 Aug 2013: – Third party assets under management decreased 4% to £106.2bn – an increase of 1% on a currency neutral^ basis – Customer accounts (deposits) decreased 5% to £23.4bn - an increase of 3% on a currency neutral^ bas
Slide 8: Funding and liquidity
Funding and liquidity • We have continued to diversify Cash and near cash our funding sources £'mn 10,000 • The cost of funds has started to Average 8,000 improve, notably in our UK and A t li operations Australian ti 6,000 4,000 • Cash balances remain strong g 2 000 2,000 - • Advances as a percenta
Slide 9: Capital ratios
Capital ratios • We have implemented Basel 3 in our South African and Australian businesses, with moderate impact on our ratios • Our UK business is reporting in terms of Basel 2.5 and capital ratios remain stable ‒ We await the outcome of the PRA PRA’ss consultation (CP5/13: Strengthening capital s
Slide 10: Impairment trends
Impairment trends • The total income statement Impairment analysis impairment charge is expected to be approximately 25% lower £’mn £ mn than the prior year 250 200 • We expect the credit loss ratio 150 on total average core loans and advances to be between 0.60% 100 to 0.70% ((Mar 2013: 0.84%;; 50
Slide 11: Divisional review
Out of the Ordinary® o Investec Divisional review _—_ 11
Slide 12: Asset Management
Asset Management • Investment performance Assets under management: remains solid but financial Since 31 Mar 2013: down 5% to £66.4bn; markets are volatile currency neutral^ flat £’bn • Positive net inflows to end 80 Aug of £1.2bn 70 60 50 • Financial performance 40 should be marginally ahead 30 of 1
Slide 13: Wealth & Investment
Wealth & Investment • Performing well ahead of the Funds under management: prior year Since 31 Mar 2013: down 2% to £39.4bn; currency y neutral^ up p 3% ‒ Higher average funds under management 45 £’bn ‒ Net inflows of £0.3bn to 40 35 end of A Augg 30 25 • Margins beginning to improve 20 15 10 5 0 20
Slide 14: Specialist Banking
Specialist Banking The Specialist Bank is performing behind the prior year • South Africa has p performed well ahead of the p prior yyear • UK is performing behind the prior year ‒ We continue to concentrate on realigning costs with revenue and certain businesses have been rationalised ‒ Results rem
Slide 15: Specialist Banking
Specialist Banking Net interest margin Investment and trading income • Loan growth of 3% in neutral currencies • Strong performance from the South African • Stable lending margins unlisted investment portfolio • Cost of funds reducing in UK and Australia • Lower earnings from the fixed income • Lowe
Slide 16: Additional aspects
Out of the Ordinary® & Investec Additional aspects —_ 16
Slide 17: Other information
Other information • Effective tax rate: expected to be approximately 17%- 18% • Weighted number of shares in issue for the six months ending is expected to be approximately 859mn 17
Slide 18: Conclusion
Out of the Ordinary® @ Investec Conclusion —_ 18
Slide 19: Conclusion
Conclusion • Markets and economic conditions around the world remain mixed and it’s difficult to predict the direction in which they are moving • The developed world economies seem to be improving but the air of optimism will only sustain if the broader geopolitical issues are resolved and the US an
Slide 20: Investec pre-close briefing
Investec pre pre-close close briefing 17 September 2013 20
Slide 21: 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 21
Slide 22: Appendices
Out of the Ordinary® o Investec Appendices —_ 22
Slide 23: Operating environment
Operating environment 31 Aug 31 Mar 30 Sep % move since 2013 2013 2012 Mar 2013 JSE ALSI 42,228 , 39,861 , 35,758 , 5.9% FTSE ALSI 3,410 3,381 2,999 0.9% Australian All Ord 5,125 4,980 4,406 2.9% SA Prime 8.50% 8.50% 8.50% - UK Clearing Banks 0.50% 0.50% 0.50% - RBA cash rate target 2.50% 3.00% 3.50
Slide 24: Normalised operating profit: year ended Mar 2013
Normalised* operating profit: For the year ended 31 Mar 2013 £’000 UK & Southern Australia Total Europe Africa group Asset Management 59,341 80,823 - 140,164 Wealth & Investment 33,910 16,757 - 50,667 Specialist Banking 51,156 187,782 3,401 242,339 Total group 144,407 285,362 3,401 433,170 Non-contr
Slide 25: Normalised operating profit: six months ended Sep 2012
Normalised* operating profit: For the six months ended 30 Sep 2012 £’000 UK & Southern Australia Total Europe p Africa group g p Asset Management 28,081 39,116 - 67,197 Wealth & Investment 14,223 8,628 - 22,851 Specialist Banking 47,264 87,352 4,755 139,371 Total group 89,568 135,096 4,755 229,419 N
Slide 26: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 31 Aug 31 Mar 30 Sep 31 Mar % change YTD 2013 2013 2012 2012 vs Mar 2013 UK and international 40,596 41,569 36,034 36,154 (2.3%) - Mutual funds 15,625 17,004 16,150 17,490 (8.1%) - Segregated mandates 24,971 24,565 19,884 18,664 1.7% Sout
Slide 27: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 31 Aug 31 Mar 30 Sep 31 Mar % change YTD 2013 2013 2012 2012 vs Mar 2013 Di Discretionary ti 41 336 41,336 36 352 36,352 30 947 30,947 26 809 26,809 13 7% 13.7% Non-discretionary 187,337 181,668 159,514 142,546 3.1% Total 228,673 218,
Slide 28: Investec Wealth & Investment Non-SA: Funds under management
Investec Wealth & Investment Non-SA: Funds under management £’million 31 Aug 31 Mar 30 Sep 31 Mar % change YTD vs 2013 2013 2012 2012 Mar 2013 Total IWI and Europe - Discretionary 16,903 16,381 14,786 14,187 3.2% - Non-discretionary and other 8,114 8,352 7,706 6,782 (2.8%) Total 25,017 24,733 22,492
Slide 29: Total group core loans
Total group core loans £’million 31 Aug 31 Mar 30 Sep 31 Mar % change YTD 2013 2013 2012 2012 vs Mar 2013 UK and Europe 6 104 6,104 6 045 6,045 5 778 5,778 5 788 5,788 1 0% 1.0% Southern Africa 9,343 10,165 9,983 10,490 (8.1%) Australia 1,930 2,205 1,991 1,948 (12.5%) Total core loans 17,377 18,415
Slide 30: Total group customer deposits
Total group customer deposits £’million 31 Aug 31 Mar 30 Sep 31 Mar % change YTD 2013 2013 2012 2012 vs Mar 2013 UK and Europe 9,476 9,561 9,673 9,459 (0.9%) Southern Africa 12,276 13,278 13,371 14,348 (7.5%) Australia 1,600 1,693 1,644 1,537 (5.5%) Total deposits p 23,352 , 24,532 , 24,688 , 25,344