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Investec Bank - Audited summarised consolidated SA GAAP financial results in
Rands for the year ended 31 March 2005
Investec Bank Limited
(Registration number 1969/004763/06)
JSE Code: INLP ISIN: ZAE000048393
Audited summarised consolidated SA GAAP financial results in Rands for the year
ended 31 March 2005
Consolidated income statement for the year ended 31 March
2005 2004
(R millions) Audited Audited
Interest received 6,762 6,551
Interest paid (5,050) (5,242)
Net interest income 1,712 1,309
Impairment of advances (131) (173)
1,581 1,136
Other income 1,119 962
Total income 2,700 2,098
Operating expenses (1,296) (1,076)
Operating profit before taxation 1,404 1,022
Taxation (249) (131)
Operating profit after taxation 1,155 891
Earnings attributable to minority shareholders (1) (1)
Earnings attributable to shareholders 1,154 890
Calculation of headline earnings
Earnings attributable to shareholders 1,154 890
Headline adjustments 14 (3)
Loss/(profit) on disposal of subsidiaries 2 (3)
Impairment of owner occupied property 12 -
Headline earnings attributable to shareholders 1,168 887
Compulsorily convertible debenture interest (214) (268)
Preference dividends declared (131) (22)
Headline earnings attributable to
ordinary shareholders 823 597
Consolidated balance sheet at 31 March
2005 2004*
(R millions) Audited Audited
Assets
Cash and short-term funds 13,221 11,764
Short-term negotiable securities 7,982 6,336
Investment and trading securities 14,929 15,807
Other assets 708 629
Advances 42,960 36,629
Intergroup 8,455 10,548
Property and equipment 121 686
88,376 82,399
Equity and liabilities
Capital and reserves
Ordinary share capital 16 16
Perpetual preference shares 1,491 1,491
Compulsorily convertible debentures 681 1,938
Reserves 6,608 6,226
8,796 9,671
Interest of minority shareholder`s in 5 29
subsidiaries
Total shareholders` funds 8,801 9,700
Subordinated debt 2,961 2,961
11,762 12,661
Liabilities
Redeemable preference shares 1,655 1,740
Deposits and other accounts 74,492 67,866
Taxation 467 132
88,376 82,399
Statement of changes in shareholders` funds for the year ended 31 March
2005 2004
(R millions) Audited Audited
Balance at the beginning of the year 9,671 8,134
Buyback of debentures (1,257) -
Net issue of perpetual preference shares - 1,491
Earnings attributable to shareholders 1,154 890
Compulsorily convertible debenture interest (214) (268)
Preference dividends declared (131) (22)
Dividends declared (395) (500)
Movement in foreign currency translation (5) (59)
reserves
(Decrease)/increase in cashflow hedge fair (27) 10
value adjustments
Net movement in investment revaluation reserves - (5)
Balance at the end of the year 8,796 9,671
Abridged cash flow statement for the year ended 31 March
2005 2004*
(R millions) Audited Audited
Cash inflow from operating activities 889 331
Cash outflow from banking operations (741) (4,350)
Cash inflow from investing activities 530 161
Cash inflow from financing activities 779 1,199
Net increase/(decrease) in cash and short-term 1,457 (2,659)
funds
Cash and short-term funds at the beginning of 11,764 14,423
the year
Cash and short-term funds at the end of the 13,221 11,764
year
* Restated for changes to accounting policies and disclosures as detailed in
the paragraph headed `Restatements to comparative figures`.
Segmental information
For the year ended 31 March 2005
Private Treasury &
Client Specialised Investment
(R millions) Activities Finance Banking Other Total
Total income 909 711 400 682 2,702
Operating (521) (396) (118) (249) (1,284)
expenses
Operating 388 315 282 433 1,418
profits before
taxation and
headline
adjustments
Headline - - - (14) (14)
adjustments
Operating 388 315 282 419 1,404
profit before
taxation
Cost to income 52.8 55.9 28.8 35.7 45.7
ratio (%)
For the year ended 31 March 2004
Private Treasury &
Client Specialised Investment
(R millions) Activities Finance Banking Other Total
Total income 628 669 372 426 2,095
Operating (415) (353) (92) (216) (1,076)
expenses
Operating 213 316 280 210 1,019
profits before
taxation and
headline
adjustments
Headline - - - 3 3
adjustments
Operating 213 316 280 213 1,022
profit before
taxation
Cost to income 58.4 51.6 24.7 43.2 47.5
ratio (%)
Commentary
Overview of results
We are pleased to announce that Investec Bank Limited, a subsidiary of Investec
Limited, posted a solid increase in earnings attributable to shareholders of
29.7% from R890 million to R1,154 million. The bank has benefited from continued
strict focus on driving profitable growth in its key businesses, supported by
favourable economic conditions.
Salient operational features of the financial year include:
- The Private Banking division posted a significant increase in operating profit
of 82.2% to R388 million, driven by solid growth in advances and non-interest
income. Strong performances were recorded across the majority of Private Banking
activities with notable performances from Specialised Lending, Property Finance,
Growth Finance and Investment Management Activities. Since 31 March 2004, the
private client lending book has grown by 30.2% to R29,0 billion and the division
increased its retail deposit book by 30.6% to R13,5 billion.
- The Treasury and Specialised Finance division reported operating profit of
R315 million, in line with that of the prior year. The division benefited from a
relatively stable interest rate environment and an improvement in dealing
profits following a disappointing performance reported in the prior period. The
advisory and structuring businesses performed well with notable performances
from the Project Finance, Resource Finance, Structured Finance and Financial
Products divisions. These results were however offset by lower fair value
adjustments in the current year.
- The Investment Banking division recorded operating profit of R282 million, in
line with that of the prior year, benefitting from a good performance of the
Direct Investments and Private Equity portfolios.
- The Group Services and Other Activities division posted a significant increase
in operating profit from R210 million to R433 million, largely as a result of a
solid performance by the Central Funding division which benefited from an
improved capital structure and favourable capital market conditions.
For further information on the Investec group results, refer to the results of
Investec plc (incorporating the results of Investec Limited).
Basis of preparation
The financial information has been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice and in the manner required
by the South African Companies Act of 1973 and is consistent with that of the
prior year.
Restatements to comparative figures
- Investments in preference shares amounting to R903 million were classified
under investment and trading securities in the prior year. To achieve better
disclosure, the comparatives have been adjusted to reflect these assets as
advances.
- Following from the consolidation of the staff share scheme in the Investec
Limited financial statements, to achieve fairer presentation, loans amounting to
R780 million, to the staff share scheme have been reclassified from other assets
to intergroup balances.
The above reclassifications have no effect on reserves.
On behalf of the board of Investec Bank Limited
Hugh Herman
Chairman
Stephen Koseff
Chief Executive Officer
Bernard Kantor
Managing Director
Sandton
19 May 2005
These financial results have been audited by KPMG Inc. and Ernst & Young and
their unqualified audit opinion is available for inspection at the company`s
registered office.
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 4
Notice is hereby given that preference dividend number 4 amounting to 411,37
cents per share has been declared for the period 1 October 2004 to 31 March
2005. The dividend is 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 1 July 2005.
The relevant dates relating to the payment of dividend number 4 are as follows:
Last day to trade cum dividend Friday, 24 June 2005
Shares trade ex dividend Monday, 27 June 2005
Record date Friday, 1 July 2005
Payment date Monday, 4 July 2005
Share certificates may not be dematerialised or rematerialised between Monday,
27 June 2005 and Friday, 1 July 2005, both days inclusive.
By order of the board
S. Noik Sandton
Company Secretary 19 May 2005
Registered office
100 Grayston Drive
Sandown
Sandton
2196
Transfer secretaries
Computershare Investor Services
2004 (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Directors: H S Herman (Chairman), D M Lawrence* (Deputy Chairman), S Koseff*
(Chief Executive), B Kantor* (Managing), S E Abrahams,
G R Burger*, D E Jowell, M P Malungani, D R Motsepe, Dr M Z Nkosi, B Tapnack*, P
R S Thomas, F Titi, R A P Upton, *Executive
Company secretary: S Noik
Date: 19/05/2005 08:00:39 AM
Produced by the JSE SENS Department
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