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JSE INLP
INVS
INLP - Investec Bank - Reviewed Condensed Consolidated Financial Results
For The Year Ended 31 March 2007 and dividend declaration
Investec Bank Limited
Incorporated in the Republic of South Africa
Registration number 1969/004763/06
JSE share code: INLP
ISIN: ZAE000048393
Reviewed condensed consolidated financial results for the year ended 31
March 2007
Consolidated income statement
Year to Year to
31 March 31 March
(R` millions) 2007 2006
Interest receivable 10,339 7,827
Interest payable (7,785) (5,827)
Net interest income 2,554 2,000
Fees and commissions receivable 910 647
Fees and commissions payable (46) (28)
Principal transactions 1,000 637
Operating loss from associates (10) -
Other income 1,854 1,256
Total operating income 4,408 3,256
Impairment losses on loans and advances (122) 17
Operating income 4,286 3,273
Administrative expenses (2,150) (1,722)
Depreciation and impairment of property, (51) (38)
equipment and software
Operating profit 2,085 1,513
Profit on disposal of subsidiary* 39 -
Profit before taxation 2,124 1,513
Taxation (572) (305)
Profit after taxation 1,552 1,208
Earnings attributable to minority interests 3 32
Earnings attributable to shareholders 1,549 1,176
1,552 1,208
Calculation of headline earnings
Earnings attributable to shareholders 1,549 1,176
Headline adjustments (39) (1)
Realisation of available for sale - (1)
instrument
Profit on disposal of subsidiaries (39) -
Headline earnings attributable to 1,510 1,175
shareholders
Preference dividends paid (121) (121)
Headline earnings attributable to ordinary 1,389 1,054
shareholders
* The group disposed of its investment in Investec Holdings (Botswana)
Limited during the year to Investec Asset Management Holdings (Pty)
Limited on an arms length basis. The sale had no material effect on the
group`s financial results and position.
Consolidated balance sheet at
31 March 31 March
(R` millions) 2007 2006
Assets
Cash and balances at central banks 851 1,930
Loans and advances to banks 20,783 12,473
Cash equivalent advances to customers 7,214 5,217
Reverse repurchase agreements and cash
collateral on securities borrowed
2,916 1,224
Trading securities 15,401 12,208
Derivative financial instruments 5,693 9,032
Investment securities 29 31
Loans and advances to customers 78,588 62,885
Investment in associated undertakings 221 -
Deferred taxation assets 263 241
Other assets 884 682
Property and equipment 104 83
Investment properties 3 7
Intangible assets 61 26
Loans to group companies 9,753 6,508
142,764 112,547
Liabilities
Deposits by banks 12,959 7,776
Derivative financial instruments 5,576 7,138
Other trading liabilities 255 266
Repurchase agreements and cash collateral on 2,378 919
securities lent
Customer accounts 73,074 56,201
Debt securities in issue 30,870 23,502
Current taxation liabilities 307 422
Deferred taxation liabilities 284 164
Other liabilities 3,939 4,207
129,642 100,595
Subordinated liabilities (including 3,066 3,140
convertible debt)
132,708 103,735
Equity
Ordinary share capital 16 16
Share premium 4,732 4,732
Equity portion of convertible debentures 229 229
Perpetual preference shares 1,491 1,491
Other reserves 738 512
Retained income 2,850 1,824
Shareholders` equity excluding minority 10,056 8,804
interests
Minority interests - 8
Total equity 10,056 8,812
Total liabilities and equity 142,764 112,547
Statement of changes in equity
Year Year
to to
31 March 31 March
(R` millions) 2007 2006
Balance at the beginning of the year 8,812 8,459
Foreign currency adjustments 12 (6)
Earnings for the year attributable to 1,549 1,176
shareholders
Earnings for the year attributable to 3 32
minority interests
Dividends paid to ordinary shareholders (190) (640)
Dividends paid to perpetual preference (121) (121)
shareholders
Fair value gain on available for sale assets 2 -
Decrease in minorities on disposals (5) (104)
Dividends paid to minorities (6) -
Cash flow hedge fair value gain - 16
Balance at the end of the year 10,056 8,812
Consolidated cash flow statement
Year to Year to
31 March 31 March
(R` millions) 2007 2006
Net cash inflow from operating activities 1,295 470
Net cash inflow/(outflow) from banking 2,521 (82)
activities
Net cash outflow from investing activities (284) (33)
Net cash (outflow)/inflow from financing (3,251) 1,966
activities
Net increase in cash and cash equivalents 281 2,321
Cash and cash equivalents at the beginning of 7,679 5,358
the year
Cash and cash equivalents at the end of the 7,960 7,679
year
Cash and cash equivalents is defined as including: cash and balances at
central banks, on demand loans and advances to banks and cash equivalent
advances to customers (all of which have a maturity profile of less than
three months).
Segmental information
For the year to 31 March 2007
Private Group
Client Capital Investment Services
(R` millions) Activities Markets Banking and Other Total
Operating 1,550 1,448 584 704 4,286
income
Operating (995) (608) (204) (394) (2,201)
expenses
Operating 555 840 380 310 2,085
profit
Cost to 61,7 40.3 34.9 56.2 49.9
income ratio
(%)
For the year to 31 March 2006
Private Group
Client Capital Investment Services
(R` millions) Activities Markets Banking and Other Total
Operating 1,110 909 643 610 3,272
income
Operating (729) (468) (159) (403) (1,759)
expenses
Operating 381 441 484 207 1,513
profit
Cost to 66.1 48.0 25.0 76.0 54.3
income ratio
(%)
Commentary
Overview of results
We are pleased to announce that Investec Bank Limited, a subsidiary of
Investec Limited, posted an increase in headline earnings attributable
to ordinary shareholders of 31.8% from R1,054 million to R1,389 million.
For full information on the Investec group results, refer to the
combined results of Investec plc and Investec Limited.
Business unit review
Unless the context indicates otherwise, all comparatives referred to in
the business unit review, relate to the year ended 31 March 2006.
Operating profit is before taxation and headline adjustments.
Salient operational features of the year under review include:
* The Private Client Activities division posted an increase of 45.7% in
operating profit to R555 million (2006: R381 million). The Private Bank
has benefited from strong growth in advances, non-interest income and a
solid performance recorded across its areas of specialisation. The
private client lending book has grown by 36.9% to R55.8 billion (2006:
R40.7 billion) and the division increased its retail deposit book by
48.6% to R26.3 billion (2006: R17.7 billion).
* The Capital Markets (formerly known as Treasury and Specialised
Finance) division posted operating profit of R840 million (2006: R441
million), an increase of 90.5%. Growth was underpinned by a strong
performance from the division`s advisory, structuring, trading, asset
creation and distribution activities.
* Operating profit of the Investment Banking division decreased by 21.5%
to R380 million (2006: R484 million). The Corporate Finance division
benefited from a high level of activity. The results of the Private
Equity division are not comparable to the previous period as certain of
the recent Private Equity investments have been acquired by other
subsidiaries of Investec Limited. However, the entrepreneurial
investment component of the Direct Investment division generated less
revenue than in prior years.
* Other Activities posted a 49.8% increase in operating profit to R310
million (2006: R207 million) largely as a result of a stronger
performance from some of the investments within the central funding
portfolio.
Accounting policies
The year end results are prepared in accordance with the recognition and
measurement requirements of International Financial Reporting Standards
and the presentation and disclosure requirements of IAS 34. The
accounting policies applied in the preparation of the results for the
year ended 31 March 2007 are consistent with those adopted in the
financial statements for the year ended 31 March 2006, except for the
adoption of accounting standards interpretations issued with effect from
1 January 2006. The adoption of these interpretations has had no
material reportable impact on the financial results, position or cash
flows of the group.
On behalf of the board of Investec Bank Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
Sandton
17 May 2007
KPMG Inc and Ernst & Young Inc, the group`s independent joint auditors,
have reviewed the preliminary financial statements contained in the
preliminary report, and have expressed an unmodified conclusion on the
preliminary financial statements. Their review report is available for
inspection at the company`s registered office.
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 8
Notice is hereby given that preference dividend number 8 amounting to
459.04 cents per share has been declared for the period 01 October 2006
to 31 March 2007. The dividend is payable to holders of the non-
redeemable non-cumulative non-participating preference shares as
recorded in the books of the company at the close of business on 29 June
2007.
The relevant dates for the payment of dividend number 8
are as follows:-
Last day to trade cum-dividend Friday, 22 June 2007
Shares trade ex-dividend Monday, 25 June 2007
Record date Friday, 29 June 2007
Payment date Wednesday, 04 July 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 25 June 2007 and Friday, 29 June 2007, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
17 May 2007
Registered office
100 Grayston Drive
Sandown
Sandton
2196
Transfer secretaries
Computershare Investor Services
2004 (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Investec Bank Limited
(Registration number 1969/004763/06)
JSE share code: INLP ISIN: ZAE000048393
Directors: H S Herman (Chairman), D M Lawrence^ (Deputy Chairman),
S Koseff^ (Chief Executive), B Kantor^ (Managing), S E Abrahams,
G R Burger^, D E Jowell, M P Malungani, K X T Socikwa, B Tapnack^,
P R S Thomas, F Titi, C B Tshili.
^Executive
Company secretary: B Coetsee
Date: 17/05/2007 08:01:01 Produced by the JSE SENS Department.
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