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INL INP
INL INP
INP/INL - Investec Plc/Investec - Reclassifications and enhancements to the
disclosures for the results for the year ended 31 March 2011(as previously
reported)
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INP
ISIN: GB00B17BBQ50
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL
ISIN: ZAE000081949
(jointly "Investec")
As part of the dual listed company structure, Investec plc and Investec
Limited notify both the London Stock Exchange and the JSE Limited of matters
which are required to be disclosed under the Disclosure, Transparency and
Listing Rules of the United Kingdom Listing Authority (the "UKLA") and/or the
JSE Listing Requirements.
Investec plc and Investec Limited ("Investec") combined results
Reclassifications and enhancements to the disclosures for the results for the
year ended 31 March 2011(as previously reported)
Overview
In terms of Investec`s recent presentations and announcements you would be
aware that the Investec Group has positioned its` strategic discussions around
three core business areas namely, Asset Management, Wealth & Investment and
Specialist Banking.
In some respects the Group feels that it has historically overcomplicated its
external disclosures by elaborating on six core areas of business. As you
would have already seen in the Group`s recent presentations all the banking
businesses have been combined under one broader umbrella of the Specialist
Bank.
As a result the Group has chosen to refine some of its disclosures which are
explained further below.
The Group believes that these refinements provide greater clarity on the key
income and balance sheet drivers of its business.
The financial information on which this statement is based has not been
reviewed and reported on by the Group`s auditors.
Investec will be hosting a conference call at 11:00 SA time (10:00 UK time) on
11 May, 2012, to go through these refinements.
Details pertaining to the conference call can be found at www.investec.com
For further information contact:
Investec Investor Relations
Tel: +27 (0) 11 286 7070
Tel: +44 (0) 207 597 5546
email: investorrelations@investec.com
Investec plc and Investec Limited
Combined consolidated income statement
Unaudited
Commentary on income statement reclassifications
* The previously reported principal transaction income line item has been
split into the following line items:
- Investment income: income, other than margin, from securities held for the
purpose of generating interest yield, dividends and capital appreciation
- Client flow trading income: income from trading activities arising from
making and facilitating client activities
- Income from balance sheet management and other trading activities: includes
proprietary trading income and other gains and losses as well as income earned
from the balance sheet management desk
* With the continued reduction in insurance activity, it is deemed appropriate
to move the associated line items to other operating income
For the
year ended
For the 31 March 2011
year ended AS
GBP`000 31 March 2011 PREVIOUSLY
NEW FORMAT REPORTED Reclassifications
Interest income 2 238 783 2 238 783 -
Interest expense (1 557 314) (1 557 314) -
Net interest income 681 469 681 469 -
Fee and commission income 896 300 896 300 -
Fee and commission
expense (108 642) (108 642) -
Principal transactions - 418 686 (418 686)
Investment income 254 943 - 254 943
Trading income
- From customer flow 76 447 - 76 447
- From balance sheet
management and other
trading activities 87 296 - 87 296
Investment income on
assurance activities - 64 834 (64
834)
Premiums and reinsurance
recoveries on insurance
contracts - 6 110 (6
110)
Other operating income 67 173 54 003 13 170
Claims and reinsurance
premiums on insurance
business - (57 774) 57
774
Total operating income
before impairment losses
on loans and advances 1 954 986 1 954 986 -
Impairment losses on
loans and advances (318 230) (318 230) -
Operating income 1 636 756 1 636 756 -
Operating costs (1 196 865) (1 196 865) -
Depreciation on
operating leased assets (16 447) (16 447) -
Operating profit before
goodwill 423 444 423 444 -
Impairment of goodwill (6 888) (6 888) -
Amortisation of acquired
intangibles (6 341) (6 341) -
Operating profit 410 215 410 215 -
-
Profit arising from
associate converted to
subsidiary 73 465 73 465 -
Net loss on disposal of
group operations (17 302) (17 302) -
Profit before taxation 466 378 466 378 -
Taxation on operating
profit before goodwill (65 075) (65 075) -
Taxation on acquired
intangibles and
acquisition/disposal of
group operations 6 610 6 610 -
Profit after taxation 407 913 407 913 -
Operating losses
attributable to
non-controlling
interests 10 962 10 962 -
Non operating losses
attributable to
non-controlling
interests 1 641 1 641 -
Earnings attributable to
shareholders 420 516 420 516 -
Investec plc and Investec Limited
Combined consolidated balance sheet
Unaudited
Commentary on balance sheet reclassifications
The main driver behind the revision to the balance sheet is to enable a better
read of Investec`s exposures and to minimise reconciliation points to the
detailed risk disclosures in the annual report.
It is noted that there are no measurement changes nor are there any changes to
total assets, liabilities and equity.
Each category of reclassification is noted below:
Cash equivalent corporate paper
Cash equivalent advances to customers has been renamed to "non-sovereign, non-
bank cash placements". These balances represent short term placements in
corporates that run an in-house treasury function.
Loans and securitisation
To better align the balance sheet with the Group`s risk management
disclosures, loans and advances and securitised assets that form part of our
"core" lending activities has been separated from assets that are in
warehoused facilities and structured credit investments arising out of our
securitisation and principal finance activities. This has resulted in a need
to split loans and advances and securitised assets into two balance sheet
categories for each. Securitised liabilities has been split into two line
items to enable the relationship with securitised assets to be clearly
identified.
Securities reclassification
The Group`s previous balance sheet split securities (other than lending
related) into two key line items being trading and investment securities. This
classification was driven by the accounting rule sets that mainly distinguish
between instruments fair valued through profit and loss, those carried at
amortised cost (held to maturity) and those fair valued through equity
(available for sale). The Group is of the view that disclosure of the nature
of exposures on the balance sheet, distinguishing between instruments held to
manage balance sheet liquidity, as principal exposure and balance sheet
instruments arising from trading desk activities provides more meaningful
disclosure on the face of the balance sheet. The line item "securities arising
from trading securities" includes all instruments (other than derivative
instruments) that are held on balance sheet in relation to trading activities.
As at
As at 31 March 2011
31 March 2011 AS PREVIOUSLY
GBP`000 NEW FORMAT REPORTED Reclassifications
Assets
Cash and balances at
central banks 1 769 078 1 769 078 -
Loans and advances to
banks 1 468 705 1 468 705 -
Cash equivalent advances
to customers - 535 983 (535 983)
Reverse repurchase
agreements and cash
collateral on
securities borrowed 2 467 775 2 467 775 -
Non-sovereign and
non-bank cash placements 535 983 - 535 983
Sovereign debt securities 3 532 100 - 3 532 100
Bank debt securities 3 006 129 - 3 006 129
Other debt securities 267 132 - 267 132
Trading securities - 5 114 322 (5 114 322)
Securities arising from
trading activities 743 487 - 743 487
Derivative financial
instruments 1 799 204 1 799 204 -
Investment securities - 3 328 609 (3 328 609)
Loans and advances to
customers 17 692 356 18 758 524 (1 066 168)
Securitised assets - 4 924 293 (4 924 293)
Own originated loans and
advances to customers
securitised 1 065 782 - 1 065 782
Other loans and advances 1 066 168 - 1 066 168
Warehouse assets
Kensington 1 612 181 1 612 181 -
Other securitised assets 3 858 511 - 3 858 511
Investment portfolio 856 610 - 856 610
Interests in associated
undertakings 23 481 23 481 -
Deferred taxation assets 114 838 114 838 -
Other assets 1 446 066 1 410 593 35 473
Property and equipment 279 801 279 801 -
Investment property 379 527 379 527 -
Goodwill 456 608 456 608 -
Intangible assets 136 452 136 452 -
44 579 974 44 579 974 -
Other financial
instruments at fair
value through profit and
loss in respect of
liabilities to customers 6 361 296 6 361 296 -
50 941 270 50 941 270 -
Liabilities
Deposits by banks 1 858 893 1 858 893 -
Deposits by banks
Kensington 975 542 975 542 -
Derivative financial
instruments 1 486 419 1 486 419 -
Other trading liabilities 716 556 716 556 -
Repurchase agreements
and cash collateral on
securities lent 1 599 646 1 599 646 -
Customer accounts
(deposits) 24 441 260 24 441 260 -
Debt securities in issue 2 145 213 2 145 213 -
Liabilities arising on
securitisation - 4 340 864 (4 340
864)
Liabilities arising on
securitisation of own
originated loans and
advances 1 052 281 - 1 052 281
Liabilities arising on
securitisation of other
assets 3 288 583 - 3 288 583
Current taxation
liabilities 206 957 206 957 -
Deferred taxation
liabilities 148 750 148 750 -
Other liabilities 1 411 137 1 411 137 -
39 331 237 39 331 237 -
Liabilities to customers
under investment
contracts 6 358 732 6 358 732 -
Insurance liabilities,
including unit-linked
liabilities 2 564 2 564 -
45 692 533 45 692 533 -
Subordinated liabilities 1 287 635 1 287 635 -
46 980 168 46 980 168 -
Equity
Ordinary share capital 208 208 -
Perpetual preference
share capital 153 153 -
Share premium 2 242 067 2 242 067 -
Treasury shares (42 713) (42 713) -
Other reserves 315 878 315 878 -
Retained income 1 131 980 1 131 980 -
Shareholders` equity
excluding
non-controlling
interests 3 647 573 3 647 573 -
Non-controlling interest 313 529 313 529 -
- Perpetual preferred
securities issued by
subsidiaries 317 997 317 997 -
-Non-controlling
interests in partially
held subsidiaries (4 468) (4 468) -
Total equity 3 961 102 3 961 102 -
Total liabilities and
equity 50 941 270 50 941 270 -
Cash equivalent Loans and Securities
corporate paper securitisation reclassification
GBP`000
Assets
Cash and balances at
central banks - - -
Loans and advances to
banks - - -
Cash equivalent
advances to customers (535 983) - -
Reverse repurchase
agreements and cash
collateral on
securities borrowed - - -
Non-sovereign and
non-bank cash
placements 535 983 - -
Sovereign debt
securities - - 3 532 100
Bank debt securities - - 3 006 129
Other debt securities - - 267 132
Trading securities - - (5 114 322)
Securities arising
from trading
activities - - 743 487
Derivative financial
instruments - - -
Investment securities - - (3 328 609)
Loans and advances to
customers - (1 066 168) -
Securitised assets - (4 924 293) -
Own originated loans
and advances to
customers securitised - 1 065 782 -
Other loans and
advances - 1 066 168 -
Warehouse assets
Kensington - - -
Other securitised
assets - 3 858 511 -
Investment portfolio - - 858 610
Interests in
associated
undertakings - - -
Deferred taxation
assets - - -
Other assets - - 35 473
Property and equipment - - -
Investment property - - -
Goodwill - - -
Intangible assets - - -
- - -
Other financial
instruments at fair
value through profit
and loss in
respect of liabilities
to customers - - -
- - -
Liabilities
Deposits by banks - - -
Deposits by banks
Kensington - - -
Derivative financial
instruments - - -
Other trading
liabilities - - -
Repurchase agreements
and cash collateral on
securities lent - - -
Settlement Liabilities - - -
Customer accounts
(deposits) - - -
Debt securities in
issue - - -
Liabilities arising on
securitisation - (4 340 864) -
Liabilities arising on
securitisation of own
originated loans and
advances - 1 052 281 -
Liabilities arising on
securitisation of
other assets - 3 288 583 -
Current taxation
liabilities - - -
Deferred taxation
liabilities - - -
Other liabilities - - -
- - -
Liabilities to
customers under
investment contracts - - -
Insurance liabilities,
including unit-linked
liabilities - - -
- - -
Subordinated
Liabilities - - -
Equity
Ordinary share capital - - -
Perpetual preference
share capital - - -
Share premium - - -
Treasury shares - - -
Other reserves - - -
Retained income - - -
Shareholders` equity
excluding
non-controlling
interests - - -
Non-controlling
interest - - -
- Perpetual preferred
securities issued by
subsidiaries - - -
-Non-controlling
interests in partially
held subsidiaries - - -
Total equity - - -
Total liabilities and
equity - - -
Investec plc and Investec Limited
Line of business segmental income statement disclosures
Unaudited
Commentary on line of business segmental reclassifications
The Group previously reported segmental disclosures by six core business lines
as well as including a segment for the Group`s central functions. The Group is
now disclosing its segmental disclosures in three core business lines, namely,
Asset Management, Wealth & Investment and Specialist Banking. In this regard:
- The income statement format has been revised as discussed above
- The numbers as reported previously for Asset Management and Wealth &
Investment have not changed (barring the income statement reclassifications as
referred to above)
- The Property Activities, Private Banking, Investment Banking, Capital
Markets and Group Services and Other divisions have now been grouped under one
banner and collectively referred to as the Specialist Bank. The total
operating profit has however, not changed from that which was previously
reported
For the year ended 31
March 2011 NEW FORMAT Asset Wealth & Specialist
GBP`000 Management Investment Banking Total Group
Net interest income 2 989 7 281 671 199 681 469
Fee and commission
income 411 935 159 055 325 310 896 300
Fee and commission
expense (72 831) (11 414) (24 397) (108 642)
Investment income (40) 1 126 253 857 254
943
Trading income
From customer flow - (1 932) 78 379 76 447
From balance
sheet management and
other trading activities - (528) 87 824 87
296
Other operating income 2 537 2 651 61 985 67 173
Total operating
income before
impairment losses on
loans and advances 344 590 156 239 1 454 157 1 954 986
Impairment losses on
loans and advances 29 - (318 259) (318
230)
Operating income 344 619 156 239 1 135 898 1 636 756
Operating costs (216 947) (115 813) (864 105) (1 196 865)
Depreciation on
operating leased
assets - - (16 447) (16 447)
Operating profit
before goodwill and
acquired intangibles 127 672 40 426 255 346 423 444
Operating losses
attributable to
non-controlling
interests (364) - 11 326 10
962
Operating profit
before goodwill,
acquired intangibles
and after non-
controlling interests 127 308 40 426 266 672 434 406
AS PREVIOUSLY
REPORTED: Operating
profit before
goodwill, acquired
intangibles and after
non-controlling
interests 127 308 40 426 266 672
Asset Management 127 308
Wealth & Investment 40 426
Property Activities 47 708
Private Banking (91 441)
Investment Banking 67 362
Capital Markets 242 049
Group Services and
Other activities 994
Investec plc and Investec Limited
Geographical segmental income statement disclosures
Unaudited
Commentary on geographical segmental reclassifications
- The income statement format has been revised as discussed above
- Total operating profit per geography agrees to numbers as previously
disclosed
For the year ended
31 March 2011 Southern Total
NEW FORMAT UK & Europe Africa Australia Group
GBP`000
Net interest income 270 811 338 247 72 411 681 469
Fee and commission income 523 225 333 037 40 038 896 300
Fee and commission
expense (99 473) (5 280) (3 889) (108
642)
Investment income 138 193 111 904 4 846 254 943
Trading income
From customer flow 43 353 27 694 5 400 76 447
From balance sheet
management and other
trading activities 62 430 25 133 (267) 87
296
Other operating income 51 122 18 380 (2 329) 67
173
Total operating income
before impairment losses
on loans and advances 989 661 849 115 116 210 1 954 986
Impairment losses on
loans and advances (210 485) (77 538) (30 207) (318
230)
Operating income 779 176 771 577 86 003 1 636 756
Operating costs (640 282) (471 013) (85 570) (1 196
865)
Depreciation on
operating leased assets (16 447) - - (16 447)
Operating profit before
goodwill and acquired
intangibles 122 447 300 564 433 423 444
Operating losses
attributable to
non-controlling
interests 11 179 (490) 273 10
962
Operating profit before
goodwill, acquired
intangibles and after
non-
controlling interests 133 626 300 074 706 434
406
Investec plc and Investec Limited
Segmental operating profit disclosures
Commentary on segmental geographic and business analysis of operating profit
before goodwill, acquired intangibles, non-operating items, taxation and after
non-controlling interests
The Group will provide the same disclosures as it previously reported and as
reflected below:
UK & Southern Total
Europe Africa Australia group
For the year ended 31 March
2011 (GBP`000)
Asset Management 53 002 74 306 - 127 308
Wealth and Investment 25 008 15 418 - 40 426
Specialist Banking 55 616 210 350 706 266 672
Property Activities 375 40 178 7 155 47 708
Private Banking (84 041) 2 990 (10 390) (91
441)
Investment Banking 8 887 65 191 -6 716 67 362
Capital Markets 139 978 92 211 9 860 242 049
Group Services and Other
Activities (9 583) 9 780 797 994
Total group 133 626 300 074 706 434 406
Investec plc and Investec Limited
Additional income statement note disclosures
Unaudited
Commentary on additional income statement note disclosures
The Group will provide further information with respect to net interest
income, net fees and commissions and investment income as reflected below
Net interest income for the year ended 31 March 2011
Balance sheet Balance sheet
value as at Interest value as at Interest
31 March 2011 Received 31 March 2011 Received
Southern Southern
GBP`000 UK & Europe UK & Europe Africa Africa
Cash, near cash
and bank debt
and sovereign
debt
securities 4 626 562 19 642 7 147 523 306 128
Core loans and
advances 5 576 252 318 102 11 106 445 979 123
Private Client 3 378 213 178 218 8 126 148 664 934
Corporate,
institutional
and other
clients 2 198 039 139 884 2 980 297 314 189
Other debt
securities and
other loans and
advances 722 836 60 109 476 998 39 345
Other interest
earning assets 6 809 548 235 936 1 774 765 33 391
Total interest
earning assets 17 735 198 633 789 20 505 731 1 357 987
Balance sheet Balance sheet
value as at Interest value as at Interest
31 March 2011 Received 31 March 2011 Received
Total Total
GBP`000 Australia Australia Group Group
Cash, near cash
and bank debt and
sovereign debt
securities 1 005 685 45 459 12 779 770 371 229
Core loans and
advances 2 075 441 187 343 18 758 138 1 484 568
Private Client 1 820 450 158 958 13 324 811 1 002 110
Corporate,
institutional and
other clients 254 991 28 385 5 433 327 482 458
Other debt
securities and
other loans and
advances 133 466 6 746 1 333 300 106 200
Other interest
earning assets 131 649 7 459 8 715 962 276 786
Total interest
earning assets 3 346 241 247 007 41 587 170 2 238 783
Balance sheet Balance sheet
value as at Interest value as at Interest
31 March 2011 Paid 31 March 2011 Paid
Southern Southern
GBP`000 UK & Europe UK & Europe Africa Africa
Deposits by
banks and other
debt related
securities 3 585 032 70 911 3 432 229 68 150
Customer accounts 8 812 240 192 456 14 207 218 830 450
Other interest
bearing
liabilities 4 062 716 53 699 1 193 502 63 045
Subordinated
liabilities 636 468 45 912 619 385 58 095
Total interest
bearing
liabilities 17 096 456 362 978 19 452 334 1 019 740
Net interest
income 270 811 338 247
Balance sheet Balance sheet
value as at Interest value as at Interest
31 March 2011 Paid 31 March 2011 Paid
Total Total
GBP`000 Australia Australia Group Group
Deposits by banks
and other debt
related securities 1 048 452 56 577 8 065 713 195 638
Customer accounts 1 421 802 80 388 24 441 260 1 103 294
Other interest
bearing
liabilities 495 783 35 558 5 752 001 152 302
Subordinated
liabilities 31 802 2 073 1 287 655 106 080
Total interest
bearing
liabilities 2 997 839 174 596 39 546 629 1 557 314
Net interest income 72 411 681 469
Net fees and commissions for the year ended 31 March 2011
Southern Total
GBP`000 UK & Europe Africa Australia Group
Fund management fees/fees
for assets under
management 332 621 183 994 7 580 524 195
Private client
transactional fees 53 763 80 543 12 761 147 067
Corporate and
institutional
transactional and advisory
services 136 841 68 500 19 697 225 038
Fee and commission income 523 225 333 037 40 038 896 300
Fee and commission expense (99 473) (5 280) (3 889) (108
642)
Net fees and commissions 423 752 327 757 36 149 787 658
Investec plc and Investec Limited
Additional income statement note disclosures
Unaudited
Commentary on additional income statement note disclosures
The Group will provide further information with respect to net interest
income, net fees and commissions and investment income as reflected below
Investment income for the year ended 31 March 2011
Southern Total
GBP`000 UK & Europe Africa Australia Group
Realised 124 196 31 271 4 061 159 528
Unrealised 13 054 64 915 767 78 736
Dividend income 943 37 482 18 38 443
Funding costs - (21 764) - (21
764)
Investment income 138 193 111 904 4 846 254 943
Investment income for the year ended 31 March 2011
Investment Debt securities
portfolio (listed (sovereign,
and unlisted bank and Investment
GBP`000 equities) other) properties
Realised 29 610 89 385 -
Unrealised 13 217 (163)
-
Dividend income 943 - -
Funding costs - - -
Investment income: UK &
Europe 43 770 89 222 -
Other asset
GBP`000 categories Total
Realised 5 201 124
196
Unrealised - 13 054
Dividend income - 943
Funding costs - -
Investment income: UK & Europe 5 201 138
193
Investment income for the year ended 31 March 2011
Investment Debt securities
portfolio (listed (sovereign,
and unlisted bank and Investment
GBP`000 equities) other) properties
Realised 26 922 3 441 908
Unrealised 12 072 (2 141) 54 984
Dividend income 36 826 37 619
Funding costs (15 818) (107) (5
839)
Investment income:
Southern Africa 60 002 1 230 50 672
Other asset
GBP`000 categories Total
Realised - 31 271
Unrealised - 64 915
Dividend income - 37 482
Funding costs - (21
764)
Investment income: Southern Africa - 111 904
Investment income for the year ended 31 March 2011
Investment Debt securities
portfolio (listed (sovereign,
and unlisted bank and Investment
GBP`000 equities) other) properties
Realised 130 1 578 -
Unrealised 767 - -
Dividend income 18 - -
Funding costs - - -
Investment income: Australia 915 1 578 -
Other asset
GBP`000 categories Total
Realised 2 353 4 061
Unrealised - 767
Dividend income - 18
Funding costs - -
Investment income: Australia 2 353 4 846
Investec plc and Investec Limited
Other disclosures
Commentary on other disclosures
The balance of the Group`s non-financial statement disclosures will largely
remain as previously reported
Date: 11/05/2012 08:00:01 Produced by the JSE SENS Department.
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