| Thu 19 Nov 2009, 9:01 | | INLP - Investec Bank - Reviewed interim condensed consolidated financial results |
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JSE INLP
INLP
INLP - Investec Bank - Reviewed interim condensed consolidated financial results
for the six months to 30 September 2009
Investec Bank Limited
(Registration number 1969/004763/06)
Share Code: INLP
ISIN: ZAE000048393
Reviewed interim condensed consolidated financial results for the six months to
30 September 2009
Consolidated income statement
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million 2009 2008 2009
Interest income 7,581 10,498 20,861
Interest expense (5,796) (8,416) (16,834)
Net interest income 1,785 2,082 4,027
Fee and commission income 413 486 1,087
Fee and commission expense (21) (22) (61)
Principal transactions 974 854 1,560
Operating loss from (41) (27) (1)
associates
Other income 1,325 1,291 2,585
Total operating income 3,110 3,373 6,612
before impairment losses on
loans and advances
Impairment losses on loans (415) (178) (756)
and advances
Operating income 2,695 3,195 5,856
Administrative expenses (1,432) (1,445) (3,113)
Depreciation, amortisation (53) (35) (78)
and impairment of property,
equipment and intangibles
Profit before taxation 1,210 1,715 2,665
Taxation (209) (410) (600)
Profit after taxation 1,001 1,305 2,065
Loss/(earnings) attributable 2 - (3)
to minority interests
Earnings attributable to 1,003 1,305 2,062
shareholders
Headline earnings
Earnings attributable to 1,003 1,305 2,062
shareholders
Preference dividends paid (83) (80) (167)
Earnings attributable to 920 1,225 1,895
ordinary shareholders
Headline adjustments, net of (12) - 6
taxation
Gain on realisation of (12) - (56)
available for sale financial
assets
Impairment of associate - - 62
Headline earnings 908 1,225 1,901
attributable to ordinary
shareholders
Condensed consolidated statement of total comprehensive income
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million 2009 2008 2009
Profit after taxation 1,001 1,305 2,065
Fair value movements on cash (7) - 2
flow hedges
Fair value movements on 14 6 (67)
available for sale assets
Foreign currency adjustments (326) - -
Total recognised income and 682 1,311 2,000
expenses
Consolidated balance sheet
Reviewed Audited Reviewed
30 Sept. 31 March 30 Sept.
R` million 2009 2009 2008
Assets
Cash and balances at central banks 3,493 3,158 3,103
Loans and advances to banks 6,595 10,063 14,944
Cash equivalent advances to 5,830 5,203 6,972
customers
Reverse repurchase agreements and 2,478 6,914 8,223
cash collateral on securities
borrowed
Trading securities 32,026 19,938 18,021
Derivative financial instruments 8,818 9,950 7,771
Investment securities 1,372 993 478
Loans and advances to customers 112,597 112,155 105,535
Securitised assets 3,783 4,512 5,675
Interest in associated undertakings 145 166 167
Deferred taxation assets 315 307 290
Other assets 1,005 892 1,037
Property and equipment 159 168 178
Investment properties 5 5 5
Intangible assets 78 88 73
Loans to group companies 10,899 6,776 5,717
189,598 181,288 178,189
Liabilities
Deposits by banks 10,177 12,159 9,332
Derivative financial instruments 8,294 10,482 7,673
Other trading liabilities 442 701 805
Repurchase agreements and cash 3,856 2,290 6,306
collateral on securities lent
Customer accounts 136,766 127,139 122,162
Debt securities in issue 1,122 954 3,201
Liabilities arising on 3,216 3,186 5,185
securitisation
Current taxation liabilities 920 849 733
Deferred taxation liabilities 580 558 490
Other liabilities 3,730 3,684 3,515
169,103 162,002 159,402
Subordinated liabilities 5,091 5,091 5,091
174,194 167,093 164,493
Equity
Ordinary share capital 24 22 21
Share premium 10,054 9,056 8,557
Other reserves (218) 101 152
Retained income 5,541 5,011 4,961
Shareholders` equity excluding 15,401 14,190 13,691
minority interests
Minority interests 3 5 5
Total equity 15,404 14,195 13,696
Total liabilities and equity 189,598 181,288 178,189
Condensed consolidated statement of changes in equity
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million 2009 2008 2009
Balance at the beginning of 14,195 12,960 12,960
the period
Foreign currency adjustments (326) - -
Earnings for the period 1,003 1,305 2,062
attributable to shareholders
(Loss)/earnings for the (2) - 3
period attributable to
minority interests
Fair value movements on 14 6 (67)
available for sale assets
Fair value movements on cash (7) - 2
flow hedges
Total recognised gains and 682 1,311 2,000
losses for the period
Dividends paid to ordinary (390) (500) (1,100)
shareholders
Dividends paid to perpetual (83) (80) (167)
preference shareholders
Issue of shares 1,000 - 500
Increase in minorities - 5 2
Balance at the end of the 15,404 13,696 14,195
period
Condensed consolidated cash flow statement
Reviewed Audited Reviewed
6 months Year 6 months
to to to
30 Sept. 31 March 30 Sept.
R` million 2009 2009 2008
Net cash inflow from operating 1,268 3,327 1,724
activities
Net cash outflow from banking (511) (4,554) (838)
activities
Net cash outflow from investing (54) (149) (67)
activities
Net cash inflow/(outflow) from 527 (386) (180)
financing activities
Net increase/(decrease) in cash 1,230 (1,762) 639
and cash equivalents
Cash and cash equivalents at the 8,552 10,314 10,314
beginning of the period
Cash and cash equivalents at the 9,782 8,552 10,953
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).
Condensed consolidated segmental information
For the six months to 30 September 2009
Reviewed Private
Client Capital Investment Other
R` million Activities Markets Banking Activities Total
Operating 709 795 481 710 2,695
income
Operating (615) (472) (152) (246) (1,485)
expenses
Operating 94 323 329 464 1,210
profit
Cost to 65.8 53.8 31.6 30.1 47.7
income
ratio (%)
For the
six months
to 30
September
2008
Reviewed Private
Client Capital Investment Other
R` million Activities Markets Banking Activities Total
Operating 1,004 904 695 592 3,195
income
Operating (704) (455) (146) (175) (1,480)
expenses
Operating 300 449 549 417 1,715
profit
Cost to 63.5 47.9 21.0 28.3 43.9
income
ratio (%)
These condensed 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
Investec Bank Limited, a subsidiary of Investec Limited, posted a decrease in
headline earnings attributable to ordinary shareholders of 25.9% to R908 million
(2008: R1,225 million). The bank strengthened its capital base with the capital
adequacy ratio increasing to 15.1% (31 March 2009: 14.21%) and the Tier 1 ratio
increasing to 11.3% (31 March 2009: 10.5%). 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 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
68.7% to R94 million (2008: R300 million). 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 1.8% to R77.5
billion (31 March 2009: R76.1 billion) and the division increased its retail
deposit book by 21.0% to R49.1 billion (31 March 2009: R40.6 billion). Funds
under advice decreased 10.5% to R19.6 billion (31 March 2009: R21.9 billion).
The Capital Markets division posted a decrease in operating profit of 28.1% to
R323 million (2008: R449 million). In line with the bank`s liquidity management
policies, the Central Treasury division has been successful in increasing the
bank`s cash and near cash balances held. Given the declining rate environment,
the division`s results have been impacted by a reduced return on the excess cash
held as well as by lower levels of activity. The division`s lending book has
declined by 3.0% to R31.5 billion (31 March 2009: R32.5 billion).
Operating profit of the Investment Banking division decreased by 40.1% to R329
million (2008: R549 million). The performance of the Corporate Finance division
was in line with the prior period. The investments held within the Principal
Investment portfolio generated a steady performance. The division, however,
recorded lower revaluations and fewer realisations in the current period.
Other Activities contributed R464 million (2008: R417 million) largely as a
result of an increased return on some of the investments held within the Central
Funding portfolio and foreign currency translation gains.
Accounting policies and disclosures
The interim condensed consolidated financial results of Investec Bank Limited
("the Bank") for the six month period ended 30 September 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 periods except for the adoption of the following
standards and interpretations:
IAS 1 Presentation of Financial Statements (revised)
IFRIC 13 Customer Loyalty Programmes
The adoption of these standards and interpretations had no material effect on
the results and no resulting prior period restatements.
These interim condensed consolidated financial results have been prepared in
terms of the recognition and measurement criteria of International Financial
Reporting Standards, and the presentation and disclosure requirements of IAS34,
Interim Financial Reporting.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
18 November 2009
Review conclusion
KPMG Inc. and Ernst & Young Inc., the company`s independent auditors, have
reviewed the condensed consolidated interim financial statements contained in
this interim report and have expressed an unmodified conclusion on the condensed
consolidated interim 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 13
Notice is hereby given that preference dividend number 13 has been declared for
the period 1 April 2009 to 30 September 2009 amounting to 427.40 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, 27 November 2009.
The relevant dates for the payment of dividend number 13 are as follows:
Last day to trade cum-dividend Friday, 20 November 2009
Shares commence trading ex-dividend Monday, 23 November 2009
Record date Friday, 27 November 2009
Payment date Tuesday, 08 December 2009
Share certificates may not be dematerialised or rematerialised between Monday,
23 November 2009 and Friday, 27 November 2009, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
18 November 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*, M P
Malungani, K X T Socikwa, B Tapnack*, P R S Thomas, C B Tshili.
*Executive
RMW Dunne resigned from the Board of Directors on 12 August 2009.
Company Secretary: B Coetsee
Date: 19/11/2009 09:01:01 Produced by the JSE SENS Department.
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