INL/INP - Investec Limited/Investec plc - Interim Management Statement
INL INP
INL INP
INL/INP - Investec Limited/Investec plc - Interim Management Statement
released on 3 February 2012
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL
ISIN: ZAE000081949
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INP
ISIN: GB00B17BBQ50
Investec (comprising Investec plc and Investec Limited) - Interim Management
Statement released on 3 February 2012
This Interim Management Statement is issued by Investec in accordance with
the UK Listing Authority`s Disclosure and Transparency Rules. Unless stated
otherwise, key trends and figures highlighted below refer to the nine months
ended 31 December 2011 and the corresponding period in the previous year.
Performance overview
Against a backdrop of volatile markets and low levels of activity the third
quarter of the group`s 2012 financial year has proven to be challenging. The
asset management and wealth management businesses continued to see net
inflows however overall assets under management pre the acquisition of
Evolution Group plc (refer below) declined. The Specialist Banking
businesses benefited from growth in both margin and fee income but earnings
from principal activities decreased substantially.
Salient features of the nine month period to 31 December 2011 compared to
the nine month period to
31 December 2010:
* The group recorded an increase in total operating income net of
insurance claims and depreciation of leased assets of 4.6%.
- Net interest income was 7.7% ahead of the prior year.
- Net fees and commissions were 16.3% ahead of the prior year.
- Income from principal transactions was 31.3% behind the prior
year.
* Operating costs increased by 6.8% compared to the prior year.
* Operating profit before goodwill, acquired intangibles, non-
operating items and taxation and after non-controlling interests
is 5.6% behind the prior year.
* The credit loss charge as a percentage of average gross loans and
advances annualised for the period amounted to 1.00% (31 March
2011: 1.27%).
* Recurring income as a percentage of total operating income
amounted to approximately 69%.
* As at 31 December 2011 the capital adequacy ratio of Investec plc
(applying UK Financial Services Authority rules to its capital
base) was 17.2% and the capital adequacy ratio of Investec Limited
(applying South African Reserve Bank rules to its capital base)
was 15.8%. The ratio for Investec plc takes into account the
implementation of Basel 2.5 which became effective on 31 December
2011. The ratio for Investec Limited is pre Basel 2.5 which only
became effective on 1 January 2012. The impact of Basel 2.5 on
Investec Limited is not significant.
* The group had approximately GBP9.5 billion of cash and near cash
available to support its activities.
* Since 31 March 2011 (the end of the group`s financial year):
- Third party assets under management increased 1.9% to GBP90.6
billion - an increase of 8.2% on a currency neutral basis.
These numbers include GBP6.9 billion acquired from the
Evolution Group plc.
- Customer accounts (deposits) decreased 0.7% to GBP24.3
billion - an increase of 5.6% on a currency neutral basis.
- Core loans and advances decreased 3.2% to GBP18.2 billion -
an increase of 4.7% on a currency neutral basis.
* Core advances (excluding own originated securitised assets) as a
percentage of customer deposits were 70.6% (31 March 2011:72.4%).
Significant transactions during the period
On 9 September 2011, the Board of Directors of the Evolution Group plc and
Investec plc announced that they had reached agreement on the terms of a
recommended share offer, to be implemented by way of a Court sanctioned
scheme of arrangement under Part 26 of the UK Companies Act 2006 (the
"Scheme"), under which it was proposed that Investec plc would acquire the
entire issued ordinary share capital of the Evolution Group plc. The Scheme
became effective on 22 December 2011, whereupon Investec plc issued
53,800,540 Ordinary Shares at a value of 326.8 pence each as consideration
for the acquisition of the entire issued ordinary share capital of the
Evolution Group plc.
The group will be holding a pre-close briefing on 15 March 2012.
On behalf of the board
Fani Titi (Joint Chairman), Sir David Prosser (Joint Chairman), Stephen
Koseff (Chief Executive Officer) and Bernard Kantor (Managing Director)
Notes:
1. The financial information on which this statement is based has not
been reviewed and reported on by the group`s auditors.
2. Please note that matters highlighted above 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 International Financial Reporting Standards (IFRS)
applicable to past, current and future periods, evolving
practices with regard to the interpretation and
application of standards under IFRS.
- domestic and global economic and business conditions.
- market related risks.
* A number of these factors are beyond the group`s control.
* These factors may cause the group`s actual future results,
performance or achievements in the markets in which it
operates to differ from those expressed or implied.
* Any forward looking statements made are based on the
knowledge of the group at 3 February 2012.
3. The group`s reporting currency is Pounds Sterling. Certain of the
group`s operations are conducted by entities outside the UK. The
results of operations and the financial condition of the group`s
individual companies are reported in the local currencies in which
they are domiciled, including Rands, Australian Dollars, Euros and
Dollars. These results are then translated into Pounds Sterling at
the applicable foreign currency exchange rates for inclusion in
our combined consolidated financial statements. In the case of the
income statement, the weighted average rate for the relevant
period is applied and, in the case of the balance sheet, the
relevant closing rate is used. The following table sets out the
movements in certain relevant exchange rates against Pounds
Sterling over the period:
Nine months to Year to Nine months to
31-Dec-11 31-Mar-11 31-Dec-10
Currency Period Average Period Average Period Average
end end end
per
GBP1.00
South 12.49 11.74 10.88 11.16 10.30 11.18
African
Rand
Australian 1.52 1.53 1.55 1.65 1.53 1.67
Dollar
Euro 1.19 1.14 1.13 1.17 1.16 1.18
US Dollar 1.55 1.61 1.60 1.55 1.55 1.54
4. The following disclosures are made with respect to Basel quarterly
disclosure requirements:
The group holds capital in excess of regulatory requirements
targeting a minimum tier one capital ratio of 11% and a total
capital adequacy ratio range of 14% to 17% on a consolidated basis
for each of Investec plc and Investec Limited. As per the table
below, all regulated entities met these targets at the reporting
date.
Investec IBP* IBAL* Investec IBL*
plc Limited
As at 31 Dec 2011 GBP `mn GBP `mn A$`mn ZAR `mn ZAR `mn
Primary capital 523 21,427 19,965
(Tier 1) 1,552 1,322
Other capital (Tier 99 7,850 7,850
2) 760 616
622 29,277 27,815
2,312 1,938
Less: deductions -88 -82 -93 -519 -519
Net qualifying 529 28,758 27,296
capital 2,224 1,856
Risk-weighted 12,955 11,482 3,247 182,329 174,162
assets (banking and
trading)
Capital
requirements 1,036 919 422 17,322 16,545
Credit risk
797 731 361 12,881 12,745
Securitisation
exposures 23 23 - 358 358
Equity risk
27 27 8 2,134 2,085
Market risk
59 55 4 163 122
Operational risk
130 83 49 1,786 1,235
Capital adequacy 17.2% 16.2% 16.3% 15.8% 15.7%
ratio
Tier 1 ratio 11.8% 11.3% 13.4% 11.6% 11.3%
*IBP is Investec Bank plc; IBAL is Investec Bank (Australia) Limited and IBL
is Investec Bank Limited. Investec plc includes IBP. IBP includes IBAL.
Investec Limited includes IBL.
Timetable:
Pre-close briefing: 15 March 2012
Year-end: 31 March 2012
Release of year-end results: 17 May 2012
For further information please contact:
Investec Investor Relations
UK: +44 (0) 207 597 5546
South Africa: +27 (0) 11 286 7070
investorrelations@investec.com
About Investec
Investec is an international specialist bank and asset manager that provides
a diverse range of financial products and services to a niche client base in
three principal markets, the United Kingdom, South Africa and Australia as
well as certain other countries. The group was established in 1974 and
currently has approximately 7 400 employees.
Investec focuses on delivering distinctive profitable solutions for its
clients in six core areas of activity namely, Asset Management, Wealth &
Investment, Property Activities, Private Banking, Investment Banking and
Capital Markets.
In July 2002 the Investec group implemented a dual listed company structure
with listings on the London and
Johannesburg Stock Exchanges. The combined group`s current market
capitalisation is approximately GBP3.3 billion.
Sponsor:
Investec Bank Limited
Date: 03/02/2012 09:00:42 Produced by the JSE SENS Department.
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