Slide 1: Investor pre-close briefing
Investor pre-close briefing 20 March 2015
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 t i ti and d other th ffactors, t i l di including, b butt nott lilimited it d tto: ‒ the further development of standards and interpretati
Slide 3: Operational review
Out of the Ordinary ® -$- $ Investec Di Divider O id tipage lheading Operational hreview di i Sub-heading goes here
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 28 Feb 2015 and compare 1H2015 vs 2H2015 • References to operating profit relate to adjusted* operating profit. Trends within the divisional sections relate to adjusted ope
Slide 5: Overview of the year ending 31 Mar 2015
Overview of the year ending 31 Mar 2015 • Wealth & Investment and Asset Management are expected to report results ahead of the prior year. Both divisions have benefited from higher levels of average funds under management supported by net inflows of £2.6bn and £2.4bn, respectively • The Specialist B
Slide 6: Overview of the year ending 31 Mar 2015
Overview of the year ending 31 Mar 2015 • Overall group results have been negatively impacted by the depreciation of the average Rand: Pounds Sterling exchange rate of approximately 11% over the period • Adjusted operating profit* is expected to be ahead of the prior year in Pounds Sterling; a solid
Slide 7: Overview of the year ending 31 Mar 2015
Overview of the year ending 31 Mar 2015 • For the period 31 Mar 2014 to 28 Feb 2015: – Third party assets under management increased 12% to £123.4bn – Customer accounts (deposits): o Flat at £22.6bn o Adjusting for strategic disposals^ – an increase of 7% – Core loans and advances: o Decreased 1% to
Slide 8: Balance sheet soundness
Balance sheet soundness Liquidity and funding Cash and near cash • We have surplus liquidity in the UK following £'mn the sale of assets - and we will seek to 12 000 12,000 decrease these balances over the next few months 10,000 Average 8,000 • The cost of funds has decreased during the 6 000 6,000
Slide 9: Impairment trends
Impairment trends • The total income statement Impairment analysis impairment charge is expected to £’mn b approximately be i t l 17% lower l th than 350 the prior year 300 250 • South Africa has seen a 200 normalisation in trend, whilst 150 impairments on the UK legacy 100 portfolio remain elevated
Slide 10: Divisional review
Out of the Ordinary ® -$- $ Investec Di id page heading Divider h di Divisional review Sub-heading goes here 10
Slide 11: Asset Management
Asset Management • Net flows exceeded £2.4bn to Assets under management: end of Feb 2015 Since 31 Mar 2014: up 11% to £75.7bn • Earnings are growing albeit at a 80 £’bn modest rate 70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Feb‐15 Mutual funds Segregated mandates Trends refl
Slide 12: Wealth & Investment
Wealth & Investment • Performing ahead of the prior Funds under management: year Since 31 Mar 2014: up 14% to £47.2bn ‒ Higher average funds under £’bn management 50 45 ‒ Net inflows of £2.6bn to end 40 of Feb 2015 35 30 • Operating margins continue 25 20 to improve 15 10 • Expansion of UK business
Slide 13: Specialist Banking
Specialist Banking • Th The S i li t B Specialist k iis performing Bank f i ahead h d off th i year the prior Net interest margin Investment and trading income • Loan growth of 13% (ex sales) • Good performance from the South African • Relatively stable lending margins portfolios; sound performance
Slide 14: Specialist Banking – additional information on the UK business
Specialist Banking – additional information on the UK business • The Ongoing UK business is expected to report results slightly behind the prior year as a result of a weak performance from the Hong Kong investment portfolio • As indicated in November 2014 2014, the group has accelerated the clearanc
Slide 15: Additional aspects
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Slide 16: Other information
Other information • Effective tax rate: expected to be approximately 19% • Net loss after tax arising on deconsolidation of subsidiaries sold: approximately £42mn • Other O h non-operating i iitems llargely l iin liline with i h 1H201 1H2015 • Net non-controlling interests of approximately £32mn (pr
Slide 17: Conclusion
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Slide 18: Conclusion
Conclusion • The group’s strategic disposals have all completed successfully • The simplification achieved as a result of these disposals will provide stakeholders with a clearer view of the business’s key underlying drivers going forward • Focus remains on clearing legacy assets and growing our cor
Slide 19: Investor pre-close briefing
Investor pre-close briefing 20 March 2015
Slide 20: Contact details
Contact details For further information p 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: +2727 (0) 11 286 7070 • E-mail: investorrelations@investec.com 20
Slide 21: Appendices
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Slide 22: Operating environment
Operating environment 28 Feb 30 Sep 31 Mar % move since 2015 2014 2014 Mar 2014 JSE ALSI 53,344 49,336 47,771 11.7% FTSE ALSI 3 744 3,744 3 534 3,534 3 556 3,556 5 3% 5.3% SA Prime 9.25% 9.25% 9.00% (0.25%) UK Clearing Banks 0.50% 0.50% 0.50% - Year to date 28 Feb 2015 30 Sep 2014 31 Mar 2014 Curren
Slide 23: Adjusted operating profit: six months ended 30 Sep 2014
Adjusted* operating profit: For the six months ended 30 Sep p 2014 £’000 UK & Australia UK and Southern Total Other Other Total Africa group Asset Management 37,684 - 37,684 38,996 76,680 Wealth & Investment 26,912 - 26,912 11,126 38,038 Specialist Banking 17,959 (4,988) 12,971 113,080 126,051 Total
Slide 24: Adjusted operating profit: year ended 31 Mar 2014
Adjusted* operating profit: For the yyear ended 31 Mar 2014^ £’000 UK & Australia UK and Southern Total Other Other Total Africa group Asset Management 67,585 - 67,585 76,234 143,819 Wealth & Investment 46,065 - 46,065 20,034 66,099 Specialist p Banking g 53,461 , ((13,856) , ) 39,605 , 201,153 , 24
Slide 25: Investec Asset Management: Assets under management
Investec Asset Management: Assets under management* £’million 28 Feb 30 Sep 31 Mar 30 Sep % change 2015 2014 2014 2013 YTD vs Mar 2014 UK and other 48,844 46,175 42,006 40,266 16.3% - Mutual funds 18,949 17,372 15,386 15,541 23.2% - Segregated mandates 29,895 28,803 26,620 24,725 12.3% Southern Afri
Slide 26: Investec Wealth & Investment SA: Funds under management
Investec Wealth & Investment SA: Funds under management R’million 28 Feb 30 Sep 31 Mar 30 Sep % change 2015 2014 2014 2013 YTD vs Mar 2014 Discretionary 59,286 53,093 46,961 44,979 26.2% Non-discretionary 251,848 231,588 208,959 195,250 20.5% Total 311,134 284,681 255,920 240,229 21.6% £’million 28
Slide 27: Investec Wealth & Investment Non-SA: Funds under management
Investec Wealth & Investment Non-SA: Funds under management £’million 28 Feb 30 Sep 31 Mar 30 Sep % change 2015 2014 2014 2013 YTD vs Mar 2014 Total IWI and Europe - Discretionary 21,965 19,985 18,889 17,529 16.3% - Non-discretionary and other 7,941 8,171 8,061 7,799 (1.5%) T t l Total 29 906 29,906
Slide 28: Total group core loans
Total group core loans £’million 28 Feb 30 Sep 31 Mar 30 Sep % change 2015 2014 2014 2013 YTD vs Mar 2014 UK and Europe 6,901 6,634 6,492 6,235 6.3% Southern Africa 10,004 9,303 8,935 9,227 12.0% Australia 29* 44* 1,730* 1,929 (98.3%) Total core loans 16,934 15,981 17,157 17,391 (1.3%) Home currency
Slide 29: Total group customer deposits
Total group customer deposits £’million 28 Feb 30 Sep 31 Mar 30 Sep % change 2015 2014 2014 2013 YTD vs Mar 2014 UK and Europe p 10,414 , 10,382 , 9,407 , 9,309 , 10.7% Southern Africa 12,175 11,871 11,671 12,312 4.3% Australia -* -* 1,532* 1,610 n/a Total deposits 22,539 22,253 22,610 23,231 (0.1%)