| Thu 19 May 2011, 9:01 | | 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 2011
Investec Bank Limited
(Registration number 1969/004763/06)
Share Code: INLP
ISIN: ZAE000048393
Investec Bank Limited
Reviewed preliminary condensed consolidated financial results for the year ended
31 March 2011
Consolidated income statement
Year to 31 March Reviewed Audited*
R`million 2011 2010
Interest income 14 932 15 530
Interest expense (11 062) (11 599)
Net interest income 3 870 3 931
Fee and commission income 948 921
Fee and commission expense (39) (49)
Principal transactions 1 670 1 629
Operating loss from associates (17) (47)
Other operating income 15 -
Other income 2 577 2 454
Total operating income before impairment 6 447 6 385
losses on loans and advances
Impairment losses on loans and advances (852) (858)
Operating income 5 595 5 527
Operating costs (3 181) (3 001)
Profit before taxation 2 414 2 526
Taxation (132) (520)
Profit after taxation 2 282 2 006
Loss attributable to non-controlling 4 1
interests
Earnings attributable to shareholders 2 286 2 007
Headline earnings
Earnings attributable to shareholders 2 286 2 007
Preference dividends paid (120) (149)
Earnings attributable to ordinary 2 166 1 858
shareholders
Headline adjustments, net of taxation 25 (13)
Gain on realisation of available for sale - (13)
financial assets
Impairment of associate 25 -
Headline earnings attributable to ordinary 2 191 1 845
shareholders
* As restated for reclassifications detailed in the commentary section of this
report.
Condensed consolidated statement of total comprehensive income
Year to 31 March Reviewed Audited
R`million 2011 2010
Profit after taxation 2 282 2 006
Other comprehensive income:
Cash flow hedge movements taken directly to 82 18
other comprehensive income**
Fair value movements on available for sale 23 29
assets taken directly to other comprehensive
income**
Gain on realisation of available for sale - (13)
assets recycled through income statement**
Foreign currency adjustments on translating (128) (359)
foreign operations
Total comprehensive income 2 259 1 681
Total comprehensive income attributable to (4) (1)
non-controlling interests
Total comprehensive income attributable to 2 263 1 682
ordinary shareholders
Total comprehensive income 2 259 1 681
** Net of taxation of R41 million (2010: R10 million).
Consolidated balance sheet
At 31 March Reviewed Audited*
R`million 2011 2010
Assets
Cash and balances at central banks 6 813 3 660
Loans and advances to banks 4 918 13 245
Cash equivalent advances to customers 5 829 6 455
Reverse repurchase agreements and cash 8 157 3 776
collateral on securities borrowed
Trading securities 44 352 36 375
Derivative financial instruments 11 487 7 829
Investment securities 14 214 3 605
Loans and advances to customers 115 223 111 919
Securitised assets 2 176 3 531
Interest in associated undertakings 135 180
Deferred taxation assets 42 22
Other assets 981 924
Property and equipment 286 164
Investment properties 5 5
Intangible assets 108 96
Loans to group companies 6 836 6 093
221 562 197 879
Liabilities
Deposits by banks 10 956 9 554
Derivative financial instruments 10 495 7 144
Other trading liabilities 389 454
Repurchase agreements and cash collateral on 10 733 6 281
securities lent
Customer accounts (deposits) 154 772 143 390
Debt securities in issue 2 489 2 758
Liabilities arising on securitisation 2 174 2 707
Current taxation liabilities 1 024 857
Deferred taxation liabilities 349 444
Other liabilities 2 478 2 495
195 859 176 084
Subordinated liabilities 6 866 5 341
202 725 181 425
Equity
Ordinary share capital 27 25
Share premium 11 845 10 530
Other reserves (100) (156)
Retained income 7 065 6 051
Shareholders` equity excluding non- 18 837 16 450
controlling interests
Non-controlling interests - 4
Total equity 18 837 16 454
Total liabilities and equity 221 562 197 879
* 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 2011 2010
Balance at the beginning of the year 16 454 14 195
Total comprehensive income for the year 2 259 1 681
Issue of ordinary shares 1 300 1 450
Issue of perpetual preference shares 17 27
Dividends paid to ordinary shareholders (1 073) (750)
Dividends paid to perpetual preference (120) (149)
shareholders
Balance at the end of the year 18 837 16 454
Condensed consolidated cash flow statement
Year to 31 March Reviewed Audited
R`million 2011 2010
Net cash inflow from operating activities 2 492 1 368
Net cash outflow from investing activities (226) (127)
Net cash inflow from financing activities 1 649 828
Effects of exchange rate changes on cash and (21) (47)
cash equivalents
Net increase in cash and cash equivalents 3 894 2 022
Cash and cash equivalents at the beginning of 10 574 8 552
the year
Cash and cash equivalents at the end of the 14 468 10 574
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).
Condensed consolidated segmental information for the year ended 31 March 2011
Group
Services
Reviewed Private Investment Capital and Other
R`million Banking Banking Markets Activities Total
Operating income 1 459 1 067 2 222 847 5 595
Operating expenses (1 412) (276) (1 003) (490) (3 181)
Profit before 47 791 1 219 357 2 414
taxation
Cost to income 56.5 25.9 48.5 60.0 49.3
ratio (%)
Condensed consolidated segmental information for the year ended 31 March 2010
Group
Services
Audited Private Investment Capital and Other
R`million Banking Banking Markets Activities Total
Operating income 1 675 752 1 805 1 295 5 527
Operating expenses (1 339) (219) (967) (476) (3 001)
Profit before 336 533 838 819 2 526
taxation
Cost to income 61.8 28.0 50.4 31.3 47.0
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 18.8% to R2 191
million (2010: R1 845 million).
The balance sheet remains strong with a capital adequacy ratio of 15.6% (31
March 2010: 15.5%).
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 year ended 31 March 2010. Profit is before
taxation and headline adjustments.
Salient operational features of the year under review include:
- Private Banking posted a decrease in profit before taxation of 86.0% to R47
million (2010: R336 million) largely as a result of low activity levels and
increased impairments. The private client core lending book grew by 4.2% from
R79.6 billion to R83.0 billion and the deposit book grew by 9.6% from R51.2
billion to R56.1 billion.
- Profit before taxation of Investment Banking increased by 48.4% to R791
million (2010: R533 million). The investments held within the Principal
Investment portfolio generated a solid performance. Corporate Finance has
performed well, posting a strong increase in net fees and commissions earned.
- Capital Markets posted an increase in profit before taxation of 45.5% to R1
219 million (2010: R838 million) benefitting from a recovery in loans previously
impaired. Corporate activity levels, however, remain depressed and the
division`s lending book decreased 3.5% to R27.8 billion (2010: R28.8 billion).
The bank continued to hold significant surplus liquidity and remains a net
provider of liquidity to the South African interbank market.
- Profit before taxation from the Group Services and Other Activities decreased
by 56.4% from R819 million to R357 million largely as a result of a lower return
generated on cash balances held within the Central Funding portfolio and lower
foreign currency gains.
- The effective tax rate decreased due to the resolution of matters for which a
provision was previously held.
Accounting policies and disclosures
These reviewed preliminary condensed consolidated financial results for the year
ended 31 March 2011 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
and the Companies Act 61 of 1973 and the Companies Act 71 of 2008 (as
applicable) which came into effect on 1 May 2011.
The accounting policies applied in the preparation of the results for the year
ended 31 March 2011 are consistent with those adopted in the financial statement
for the year ended 31 March 2010.
Restatements and presentation of information
Net interest income
On review, it was detected that the gross interest income and expense, as
reported at 31 March 2010, had not appropriately netted certain intergroup
interest income and expense between the two line items. Whilst net interest
income was correctly reported, the restatement to interest income and expense is
noted below:
Changes to
31 March 2010 As previously previously
R`million Restated reported reported
Interest income 15 530 23 494 (7 964)
Interest expense (11 599) (19 563) 7 964
Net interest income 3 931 3 931 -
The above change has no impact to the income statement (other than as noted
above), balance sheet or cash flow statement.
Cumulative redeemable preference shares
The bank had previously included cumulative redeemable preference shares as a
component of other liabilities. For improved disclosure, the presentation has
been amended to include the cumulative redeemable preference shares as a
component of debt securities in issue.
Changes to
31 March 2010 As previously previously
R`million Restated reported reported
Debt securities in issue 2 758 1 559 1 199
Other liabilities 2 495 3 694 (1 199)
Changes to
31 March 2009 As previously previously
R`million Restated reported reported
Debt securities in issue 2 270 954 1 316
Other liabilities 2 368 3 684 (1 316)
The above change has no impact to the income statement, balance sheet (other
than as noted above) or cash flow statement.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
18 May 2011
Review conclusion
KPMG Inc. and Ernst & Young Inc., the Group`s independent auditors, have
reviewed the preliminary condensed consolidated financial results and have
expressed an unmodified review conclusion on the preliminary condensed
consolidated financial results, which is available for inspection at the
company`s registered office.
Investec Bank Limited
Preference share dividend announcement
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 16
Notice is hereby given that preference dividend number 16 has been declared for
the period 01 October 2010 to 31 March 2011 amounting to 341.61 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, 17 June 2011.
The relevant dates for the payment of dividend number 16 are as follows:
Last day to trade cum-dividend Thursday, 09 June 2011
Shares commence trading ex-dividend Friday, 10 June 2011
Record date Friday, 17 June 2011
Payment date Thursday, 30 June 2011
Share certificates may not be dematerialised or rematerialised between Friday,
10 June 2011 and Friday, 17 June 2011, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
18 May 2011
Registered office Transfer secretaries
100 Grayston Drive Computershare Investor Services (Pty) Limited
Sandown, Sandton 2196 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
Company Secretary:
B Coetsee
www.investec.com
Date: 19/05/2011 09:01:01 Produced by the JSE SENS Department.
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