| Thu 28 Jul 2011, 10:38 | | INL/INP - Investec - Interim Management Statement |
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INL INP
INL INP
INL/INP - Investec - Interim Management Statement released on 28 July 2011
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL
ISIN: ZAE000081949
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INP
ISIN: GB00B17BBQ50
Investec (comprising Investec plc and Investec Limited) - Interim Management
Statement released on 28 July 2011
This Interim Management Statement is issued by Investec in accordance with the
UK Listing Authority`s Disclosure and Transparency Rules. Unless stated
otherwise, key trends and figures highlighted below refer to the three months
ended 30 June 2011 and the corresponding period in the previous year.
Performance overview
Against a backdrop of poor economic fundamentals and weak debt and equity
markets, operating conditions have been more difficult than anticipated in the
first quarter of the group`s 2012 financial year. The Asset Management and
Wealth Management businesses have continued to perform well as a result of
increased average funds under management and net inflows. The Specialist
Banking businesses have benefited from growth in margin and fee income but
earnings from principal activities have been under pressure. The group`s
geographical and operational diversity has, however, supported a stable
operational performance.
Salient features of the three month period to 30 June 2011 compared to the
three month period to 30 June 2010:
- The group has recorded strong growth in net interest income and net fees
and commissions, whilst principal transaction income has decreased.
- Operating profit before goodwill, acquired intangibles, non-operating
items and taxation and after non-controlling interests is marginally
ahead of the prior year.
- The credit loss charge as a percentage of average gross loans and
advances annualised for the period amounted to 0.82% (31 March 2011:
1.27%).
- Recurring income as a percentage of total operating income amounted to
approximately 71%.
- As at 30 June 2011 the capital adequacy ratio of Investec plc (applying
UK Financial Services Authority rules to its capital base) was 16.8% and
the capital adequacy ratio of Investec Limited (applying South African
Reserve Bank rules to its capital base) was 15.8%.
- The group had approximately GBP9.4 billion of cash and near cash
available to support its activities.
- Since 31 March 2011 (the end of the group`s financial year) core loans
and advances increased by 3% to GBP19.4 billion, customer deposits
increased by 2% to GBP24.9 billion and third party assets under
management increased by 2% to GBP91 billion.
- Core advances (excluding own originated securitised assets) as a
percentage of customer deposits were 73.7% (31 March 2011:72.4%).
The group will be holding a pre-close briefing on 15 September 2011 at which
it will provide further detail on the performance of its businesses.
On behalf of the board
Hugh Herman (Chairman), Stephen Koseff (Chief Executive Officer) and Bernard
Kantor (Managing Director)
Notes:
1. The financial information on which this statement is based has not been
reviewed and reported on by the group`s auditors.
2. Please note that matters highlighted above may contain forward looking
statements which are subject to various risks and uncertainties and other
factors, including, but not limited to:
- the further development of standards and interpretations under
International Financial Reporting Standards (IFRS) applicable
to past, current and future periods, evolving practices with
regard to the interpretation and application of standards under
IFRS.
- domestic and global economic and business conditions.
- market related risks.
* A number of these factors are beyond the group`s control.
* These factors may cause the group`s actual future results,
performance or achievements in the markets in which it operates to
differ from those expressed or implied.
* Any forward looking statements made are based on the knowledge of
the group at 28 July 2011.
3. The group`s reporting currency is Pounds Sterling. Certain of the group`s
operations are conducted by entities outside the UK. The results of
operations and the financial condition of the group`s individual
companies are reported in the local currencies in which they are
domiciled, including Rands, Australian Dollars, Euros and Dollars. These
results are then translated into Pounds Sterling at the applicable
foreign currency exchange rates for inclusion in our combined
consolidated financial statements. In the case of the income statement,
the weighted average rate for the relevant period is applied and, in the
case of the balance sheet, the relevant closing rate is used. The
following table sets out the movements in certain relevant exchange rates
against Pounds Sterling over the period:
Three months to Year to Three months to
30-Jun-11 31-Mar-11 30-Jun-10
Currency Period Average Period Average Period Average
end end end
per
GBP1.00
South 10.85 11.02 10.88 11.16 11.48 11.24
African
Rand
Australian 1.50 1.53 1.55 1.65 1.77 1.69
Dollar
Euro 1.11 1.13 1.13 1.17 1.22 1.17
US Dollar 1.61 1.64 1.60 1.55 1.50 1.50
4. The following disclosures are made with respect to Basel II quarterly
disclosure requirements:
The group holds capital in excess of regulatory requirements targeting a
minimum tier one capital ratio of 11% and a total capital adequacy ratio
range of 14% to 17% on a consolidated basis for each of Investec plc and
Investec Limited. As per the table below, all regulated entities met
these targets at the reporting date.
Investec IBP* IBAL* Investec IBL*
plc Limited
As at 30 Jun GBP `mn GBP A$`mn ZAR `mn ZAR `mn
2011 `mn
Primary 1,488 559 21,532 19,774
capital (Tier 1,308
1)
Other capital 752 613 108 7,019 7,019
(Tier 2)
2,240 1,921 667 28,551 26,793
Less: -81 -74 -67 -532 -532
deductions
Net qualifying 2,159 1,847 600 28,019 26,261
capital
Risk-weighted 12,823 11,389 3,481 177,056 167,242
assets
(banking and
trading)
Capital
requirements 1,026 911 452 16,820 15,888
Credit risk
801 738 392 12,280 12,016
Securitisation
exposures 20 20 - 423 423
Equity risk
20 20 7 2,224 2,142
Market risk
55 50 6 124 81
Operational
risk 130 83 47 1,769 1,226
Capital 16.8% 16.2% 17.2% 15.8% 15.7%
adequacy ratio
Tier 1 ratio 11.4% 11.3% 14.3% 12.0% 11.7%
*IBP is Investec Bank plc; IBAL is Investec Bank (Australia) Limited and IBL
is Investec Bank Limited. Investec plc includes IBP. IBP includes IBAL.
Investec Limited includes IBL.
Timetable:
Pre-close briefing: 15 September 2011
Interim results: 30 September 2011
Release of interim results: 17 November 2011
For further information please contact:
Investec Investor Relations
UK: +44 (0) 207 597 5546
South Africa: +27 (0) 11 286 7070
investorrelations@investec.com
About Investec
Investec is an international specialist bank and asset manager that provides a
diverse range of financial products and services to a niche client base in
three principal markets, the United Kingdom, South Africa and Australia as
well as certain other countries. The group was established in 1974 and
currently has approximately 7 300 employees.
Investec focuses on delivering distinctive profitable solutions for its
clients in six core areas of activity namely, Asset Management, Wealth and
Investment, Property Activities, Private Banking, Investment Banking and
Capital Markets.
In July 2002 the Investec group implemented a dual listed company structure
with listings on the London and Johannesburg Stock Exchanges. The combined
group`s current market capitalisation is approximately GBP4.1 billion.
Johannesburg and London
28 July 2011
Sponsor:
Investec Bank Limited
Date: 28/07/2011 10:30:01 Produced by the JSE SENS Department.
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