| Thu 21 May 2009, 8:01 | | INLP - Investec Bank Limited - Reviewed Preliminary Condensed Consolidated |
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JSE INLP
INLP
INLP - Investec Bank Limited - Reviewed Preliminary Condensed Consolidated
Financial Results for the Year Ended 31 March 2009
Investec Bank Limited
(Registration number 1969/004763/06)
JSE Code: INLP & ISIN: ZAE000048393
Reviewed preliminary condensed consolidated financial results for the year ended
31 March 2009
Consolidated income statement
Year to 31 March
Reviewed Audited
R` million 2009 2008
Interest income 20,861 15,731
Interest expense (16,834) (12,216)
Net interest income 4,027 3,515
Fee and commission income 1,087 1,084
Fee and commission expense (61) (30)
Principal transactions 1,560 1,202
Operating loss from associates (1) (1)
Other income 2,585 2,255
Total operating income 6,612 5,770
Impairment losses on loans and advances (756) (466)
Operating income 5,856 5,304
Administrative expenses (3,113) (2,713)
Depreciation and amortisation of property, (78) (69)
equipment and intangibles
Operating profit 2,665 2,522
Loss on disposal of group entities - (38)
Profit before taxation 2,665 2,484
Taxation (600) (686)
Profit after taxation 2,065 1,798
Earnings attributable to minority interests 3 -
Earnings attributable to shareholders 2,062 1,798
Headline earnings
Earnings attributable to shareholders 2,062 1,798
Preference dividends paid (167) (142)
Earnings attributable to ordinary 1,895 1,656
shareholders
Headline adjustments, net of taxation 6 38
Gain on realisation of available for sale (56) -
financial assets
Impairment of associate 62 -
Loss on disposal of group entities - 38
Headline earnings attributable to ordinary 1,901 1,694
shareholders
Consolidated balance sheet
At 31 March
Reviewed Audited*
R` million 2009 2008
Assets
Cash and balances at central banks 3,158 2,811
Loans and advances to banks 10,063 14,418
Cash equivalent advances to customers 5,203 7,782
Reverse repurchase agreements and cash 6,914 5,752
collateral on securities borrowed
Trading securities 19,938 17,913
Derivative financial instruments 9,950 9,668
Investment securities 993 350
Loans and advances to customers 112,155 95,021
Securitised assets 4,512 6,275
Interest in associated undertakings 166 195
Deferred taxation assets 307 285
Other assets 892 1,056
Property and equipment 168 144
Investment properties 5 5
Intangible assets 88 75
Loans to group companies 6,776 5,812
181,288 167,562
Liabilities
Deposits by banks 12,159 9,427
Derivative financial instruments 10,482 10,152
Other trading liabilities 701 266
Repurchase agreements and cash collateral on 2,290 1,533
securities lent
Customer accounts 127,139 115,654
Debt securities in issue 954 2,524
Liabilities arising on securitisation 3,186 5,637
Current taxation liabilities 849 697
Deferred taxation liabilities 558 323
Other liabilities 3,684 3,679
162,002 149,892
Subordinated liabilities (including 5,091 4,710
convertible debt)
167,093 154,602
Equity
Ordinary share capital 22 19
Share premium 9,056 8,277
Equity portion of convertible debentures - 22
Other reserves 101 911
Retained income 5,011 3,731
Shareholders` equity excluding minority 14,190 12,960
interest
Minority interest 5 -
Total equity 14,195 12,960
Total liabilities and equity 181,288 167,562
* As restated for reclassifications detailed in the commentary section of this
report.
Condensed consolidated statement of changes in equity
Year to 31 March
Reviewed Audited
R` million 2009 2008
Balance at the beginning of the year 12,960 10,056
Foreign currency adjustments - 1
Earnings for the year attributable to 2,062 1,798
shareholders
Earnings for the year attributable to minority 3 -
interests
Fair value movement on available for sale (67) 47
assets
Fair value movement on cash flow hedges 2 -
Total recognised gains and losses for the year 2,000 1,846
Dividends paid to ordinary shareholders (1,100) (650)
Dividends paid to perpetual preference (167) (142)
shareholders
Issue of shares 500 2,057
Redemption of compulsory convertible - (207)
debentures
Increase in minorities 2 -
Balance at the end of the year 14,195 12,960
Condensed consolidated cash flow statement
Year to 31 March
Reviewed Audited
R` million 2009 2008
Net cash inflow from operating activities 3,327 2,793
Net cash outflow from banking activities (4,554) (3,017)
Net cash outflow from investing activities (149) (100)
Net cash (outflow)/inflow from financing (386) 2,678
activities
Net (decrease)/increase in cash and cash (1,762) 2,354
equivalents
Cash and cash equivalents at the beginning of 10,314 7,960
the year
Cash and cash equivalents at the end of the 8,552 10,314
year
Cash and cash equivalents are 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).
Condensed consolidated segmental information
Year to 31 March 2009
Reviewed Private
Client Capital Investment
R` million Activities Markets Banking Other Total
Operating 1,792 1,878 1,195 991 5,856
income
Operating (1,348) (1,007) (429) (407) (3,191)
expenses
Operating 444 871 766 584 2,665
profit
Cost to income 65.8 45.1 34.3 37.6 48.3
ratio (%)
Year to 31 March 2008
Audited Private
Client Capital Investment
R` million Activities Markets Banking Other Total
Operating 2,139 1,780 542 843 5,304
income
Operating (1,322) (849) (217) (394) (2,782)
expenses
Operating 817 931 325 449 2,522
profit
Cost to income 57.8 41.5 38.6 45.2 48.2
ratio (%)
These preliminary condensed consolidated 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
Investec Bank Limited, a subsidiary of Investec Limited, posted an increase in
headline earnings attributable to ordinary shareholders of 12.2% to R1.901
million (2008: R1.694 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 2008. Operating profit is
before taxation and headline adjustments.
Salient operational features of the period under review include:
- The Private Client Activities division posted a decrease in operating
profit of 45.7% to R444 million (2008: R817 million). Higher average
advances and a diversified set of revenues continued to drive operating
income. However, activity levels have declined and impairment losses on
loans and advances have increased as a result of the weaker credit
environment. The private client core lending book grew by 14.3% to R76.1
billion (2008: R66.6 billion) and the division increased its retail deposit
book by 13.1% to R40.6 billion (2008: R35.9 billion). Funds under advice
decreased 15.1% to R21.9 billion (2008: R25.8 billion).
- The Capital Markets division posted a decrease in operating profit of 6.4%
to R871 million (2008: R931 million). The division benefited from a good
performance from its advisory, treasury and trading activities, as well as
higher average advances. The division`s results were, however, negatively
impacted by losses incurred on listed and unlisted investments. The
division`s lending book has grown by 21.2% to R32.5 billion (2008: R26.8
billion).
- Operating profit of the Investment Banking division increased significantly
to R766 million (2008: R325 million). The performance of the Corporate
Finance division was negatively impacted as a result of fewer transactions
completed compared to the prior year. The investments held within the
Direct Investment and Private Equity portfolios performed well.
- Other Activities contributed R584 million (2008: R449 million) largely as a
result of increased cash holdings and higher average interest rates.
Accounting policies and disclosures
The preliminary condensed consolidated financial statements of Investec Bank
Limited ("the Bank") for the year ended 31 March 2009 comprise the Bank and its
subsidiaries ("the Group").
The Bank`s principal accounting policies have been applied consistently over the
current and prior financial years except as noted below.
The group has elected to early adopt IFRS 8 (Operating Segments) as of 1 April
2008. This standard requires disclosure of information about the group`s
operating segments on the same basis as is used internally for evaluating
operating segment performance and deciding how to allocate resources to
operating segments. Adoption of this standard did not have any impact on the
financial position or performance of the group. The group determined that
operating segments were the same as the business segments previously identified
under IAS 14 (Segment Reporting).
IAS 39 (Financial Instruments: Recognition and Measurement) was amended with
effect from October 2008. Following the amendment, a non-derivative financial
asset held for trading may be transferred out of the fair value through profit
and loss category in the following circumstances:
- In rare circumstances, the asset is no longer held for the purpose of
selling or repurchasing in the near term; or
- The asset is no longer held for the purpose of selling or repurchasing in
the near term, it would have met the definition of a loan and receivable at
initial recognition and the group has the intention and ability to hold it for
the foreseeable future or until maturity.
The initial value of the financial asset that has been reclassified, per the
above, is the fair value at the date of reclassification. The group has not
applied the initial transitional rules. This change in accounting policy has had
no impact on the prior or current financial year.
These preliminary condensed consolidated financial statements have been prepared
in terms of the recognition and measurement criteria of International Financial
Reporting Standards, and the presentation and disclosure requirements of IAS 34,
Interim Financial Reporting.
Reclassifications
The group had previously included the par value and share premium received on
the issue of perpetual preference shares (an equity instrument) in a single line
item within equity on the balance sheet. The presentation has been amended to
include the share premium received of R1,491 million (2008: R1,491 million)
within the share premium account. This change in presentation has no impact on
overall equity, assets and liabilities.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
20 May 2009
Review conclusion
KPMG Inc. and Ernst & Young Inc, the Group`s independent auditors, have reviewed
the preliminary condensed consolidated financial statements, and have issued an
unmodified review conclusion on the preliminary condensed consolidated financial
statements, which is available for inspection at the company`s registered
office.
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 12
Notice is hereby given that preference dividend number 12 has been declared for
the period 01 October 2008 to 31 March 2009 amounting to 555.82 cents per share
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, 19 June 2009.
The relevant dates for the payment of dividend number 12 are as follows:
Last day to trade cum-dividend Thursday, 11 June 2009
Shares commence trading ex-dividend Friday, 12 June 2009
Record date Friday, 19 June 2009
Payment date Thursday, 2 July 2009
Share certificates may not be dematerialised or rematerialised between Friday,
12 June 2009 and Friday, 19 June 2009, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
Sandton
20 May 2009
Registered office
100 Grayston Drive
Sandown
Sandton
2196
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Directors: F Titi (Chairman), D M Lawrence* (Deputy Chairman),
S Koseff* (Chief Executive), B Kantor* (Managing Director),
S E Abrahams, G R Burger*, R M W Dunne, M P Malungani,
K X T Socikwa, B Tapnack*, P R S Thomas, C B Tshili.
*Executive
Company Secretary: B Coetsee
R M W Dunne was appointed to the board of directors with effect from 2 June
2008.
Date: 21/05/2009 08:01:02 Produced by the JSE SENS Department.
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