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JSE INLP
INVS
INLP - Investec Bank - Reviewed Interim Condensed Consolidated Financial
Results For The Six Months To 30 September 2007 And Dividend Declaration
Investec Bank Limited
(Registration number 1969/004763/06)
JSE Code: INLP & ISIN: ZAE000048393
Reviewed interim condensed consolidated financial results for the six months to
30 September 2007
Consolidated income statement
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million 2007 2006 2007
Interest income 6,930 4,374 10,339
Interest expense (5,342) (3,174) (7,785)
Net interest income 1,588 1,200 2,554
Fees and commissions 463 342 910
income
Fees and commissions (10) (20) (46)
expense
Principal transactions 412 513 1,000
Operating income/(loss) 15 (27) (10)
from associates
Other income 880 808 1,854
Total operating income 2,468 2,008 4,408
Impairment losses on loans (3) (90) (122)
and advances
Operating income 2,465 1,918 4,286
Administrative expenses (1,280) (995) (2,150)
Depreciation and (32) (20) (51)
amortisation of property,
equipment and software
Operating profit 1,153 903 2,085
Profit on disposal of - - 39
subsidiary*
Profit before taxation 1,153 903 2,124
Taxation (311) (210) (572)
Profit after taxation 842 693 1,552
Earnings attributable to - 3 3
minority interests
Earnings attributable to 842 690 1,549
shareholders
842 693 1,552
* The group disposed of
its investment in Investec
Holdings (Botswana)
Limited during the prior
year to Investec Asset
Management Holdings (Pty)
Ltd on an arms length
basis.
Headline earnings
Earnings attributable to 842 690 1,549
shareholders
Headline adjustments - - (39)
Profit on disposal of - - (39)
subsidiary*
Headline earnings 842 690 1,510
attributable to
shareholders
Preference dividends paid (69) (59) (121)
Headline earnings 773 631 1,389
attributable to ordinary
shareholders
Consolidated balance sheet at
Reviewed Audited Reviewed
30 Sept. 31 March 30 Sept.
R` million 2007 2007 2006
Assets
Cash and balances at central 2,015 851 1,654
banks
Loans and advances to banks 13,376 20,141 13,597
Cash equivalent advances to 9,259 7,214 6,367
customers
Reverse repurchase agreements 4,307 2,916 2,121
and cash collateral on
securities borrowed
Trading securities 13,969 13,472 11,719
Derivative financial 6,853 5,693 12,630
instruments
Investment securities 2 29 27
Loans and advances to 79,083 69,174 62,241
customers
Securitised assets 12,170 11,807 8,933
Interest in associated 250 221 251
undertakings
Deferred taxation assets 273 263 250
Other assets 1,332 1,062 867
Property and equipment 105 104 99
Investment properties 3 3 1
Intangible assets 72 61 39
Loans to group companies 10,783 9,753 7,512
153,852 142,764 128,308
Liabilities
Deposits by banks 9,052 12,959 8,794
Derivative financial 6,951 5,576 10,219
instruments
Other trading liabilities 334 255 59
Repurchase agreements and cash 3,021 2,378 2,496
collateral on securities lent
Customer accounts 79,877 73,074 61,105
Debt securities in issue 23,735 19,304 18,754
Liabilities arising on 12,140 11,735 8 917
securitisation
Current taxation liabilities 456 307 244
Deferred taxation liabilities 351 284 268
Other liabilities 4,086 3,770 4,879
140,003 129,642 115,735
Subordinated liabilities 3,025 3,066 3,105
(including convertible debt)
143,028 132,708 118,840
Equity
Ordinary share capital 16 16 16
Share premium 4,732 4,732 4,732
Equity portion of convertible 229 229 229
debentures
Perpetual preference shares 1,491 1,491 1,491
Other reserves 824 738 546
Retained income 3,532 2,850 2,443
Shareholders` equity excluding 10,824 10,056 9,457
minority interests
Minority interests - - 11
Total equity 10,824 10,056 9,468
Total liabilities and equity 153,852 142,764 128,308
Condensed statement of changes in equity
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million 2007 2006 2007
Balance at the beginning of 10,056 8,812 8,812
the period
Foreign currency adjustments (5) 16 12
Earnings for the period 842 690 1,549
attributable to shareholders
Earnings for the period - 3 3
attributable to minority
interests
Share based payments - 6 -
adjustments
Dividends paid to ordinary - - (190)
shareholders
Dividends paid to perpetual (69) (59) (121)
preference shareholders
Fair value gain on available - - 2
for sale assets
Decrease in minorities on - - (5)
disposals
Dividends paid to minorities - - (6)
Balance at the end of the 10,824 9,468 10,056
period
Condensed consolidated cash flow statement
Reviewed Reviewed Audited
6 months 6 months Year
to to to
30 Sept. 30 Sept. 31 March
R` million 2007 2006 2007
Net cash inflow from operating 958 653 1,295
activities
Net cash inflow from banking 3,447 1,332 2,521
activites
Net cash outflow from investing (58) (315) (284)
activities
Net cash outflow from financing (1,035) (988) (3,251)
activities
Net increase in cash and cash 3,312 682 281
equivalents
Cash and cash equivalents at 7,960 7,679 7,679
the beginning of the period
Cash and cash equivalents at 11,272 8,361 7,960
the end of the period
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 6 months to 30 September 2007
Private
Client Capital Investment
R` million Activities Markets Banking Other Total
Operating income 969 839 216 441 2,465
Operating expenses (643) (388) (109) (172) (1,312)
Operating profit 326 451 107 269 1,153
Cost to income ratio (%) 63.8 49.6 47.0 38.7 53.2
For the 6 months to 30
September 2006
Private
Client Capital Investment
R` million Activities Markets Banking Other Total
Operating income 693 672 202 351 1,918
Operating expenses (467) (293) (76) (179) (1,015)
Operating profit 226 379 126 172 903
Cost to income ratio (%) 64.2 40.1 37.6 51.4 50.5
These consolidated interim financial results are published to provide
information to holders of Investec Bank Limited`s listed non-redeemable, non-
cumulative, non-participating preference shares.
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 22.5% from R631 million to R773 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 six months ended 30 September 2006 and
operating profit is before taxation.
Salient operational features of the period under review include:
- The Private Client Activities division posted an increase of 44.2% in
operating profit to R326 million (2006: R226 million). The Private Bank has
benefited from strong growth in advances, non-interest income and a solid
performance recorded across its areas of specialisation. Since 31 March
2007 the Private Client lending book has grown by 15.7% to R64.5 billion
and the division increased its retail deposit book by 20.7% to R31.7
billion.
- The Capital Markets division posted operating profit of R451 million (2006:
R379 million), an increase of 19.0%. Growth was underpinned by a good
performance from the division`s advisory, structuring, asset creation and
distribution activities. Since 31 March 2007 the division`s lending book
has grown by 5.7% to R21.4 billion.
- Operating profit of the Investment Banking division decreased by 15.1% to
R107 million (2006: R126 million). The Corporate Finance division benefited
from a high level of activity and the Direct Investments portfolio
performed well. The Private Equity division within the Investec Bank
Limited Group, however, recorded lower profits than in the prior period.
- Other Activities posted a 56.4% increase in operating profit to R269
million (2006: R172 million) largely as a result of a strong increase in
net interest income and a solid performance from some of the investments
within the central funding portfolio.
Accounting policies and disclosures
The interim 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 Interim Financial Reporting.
The accounting policies applied in the preparation of the results for the six
months ended 30 September 2007 are consistent with those adopted in the
financial statements for the year ended 31 March 2007.
Securitised assets and related liabilities disclosure
Securitised assets and related liabilities, which continue to be recognised on
balance sheet, are now disclosed as separate line items on the face of the
balance sheet. In prior periods, securitised assets were included within loans
and advances to customers and trading securities and liabilities arising on
securitisation were included in debt securities in issue. This change in
disclosure is to provide more relevent and useful information to users.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
15 November 2007
KPMG Inc. and Ernst & Young Inc, the company`s independent auditors, have
reviewed the interim condensed consolidated financial statements contained in
this interim report and have expressed an unmodified conclusion on the interim
condensed consolidated financial statements. Their review report is available
for inspection at the company`s registerd office.
Non-redeemable non-cumulative non-participating preference shares declaration of
dividend number 9
Notice is hereby given that preference dividend number 9 amounting to 486.47
cents per share has been declared for the period 1 April 2007 to 30 September
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 Friday 30 November 2007.
The relevant dates for the payment of dividend number 9 are as follows:
Last day to trade cum- Friday, 23 November 2007
dividend
Shares trade ex-dividend Monday, 26 November 2007
Record date Friday, 30 November 2007
Payment date Tuesday, 11 December 2007
Share certificates may not be dematerialised or rematerialised between Monday,
26 November 2007 and Friday, 30 November 2007, both dates inclusive.
By order of the board
B Coetsee Sandton
Company Secretary 15 November 2007
Registered office Transfer secretaries
100 Grayston Drive Computershare Investor
Services
Sandown 2004 (Pty) Ltd
Sandton 70 Marshall Street
2196 Johannesburg 2001
Directors: F Titi (Chairman), D M Lawrence* (Deputy Chairman),
S Koseff* (Chief Executive), B Kantor* (Managing), S E Abrahams,
G R Burger*, M P Malungani, K X T Socikwa, B Tapnack*, P R S Thomas,
C B Tshili.
*Executive
Changes to the board
D E Jowell retired as a board member with effect 30 September 2007.
Company Secretary: B Coetsee
Date: 15/11/2007 09:01:01 Produced by the JSE SENS Department.
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