TIDMINVP
RNS Number : 7407S
Investec PLC
18 November 2021
Investec Limited Investec plc
Incorporated in the Republic of South Incorporated in England and Wales
Africa Registration number 3633621
Registration number 1925/002833/06 LSE share code: INVP
JSE share code: INL JSE share code: INP
NSX share code: IVD ISIN: GB00B17BBQ50
BSE share code: INVESTEC LEI: 2138007Z3U5GWDN3MY22
ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
Reviewed combined consolidated financial results for the six
months ended 30 September 2021
Highlights for 30 September 2021 (1H2022) compared to 30
September 2020 (1H2021)
-- Revenue grew 30.5% supported by the strength of our client
franchises and improved market conditions.
-- Adjusted earnings per share increased 134.8% to 26.3p
(1H2021: 11.2p), ahead of comparable pre-COVID levels (September
2019).
-- Wealth & Investment funds under management (FUM)
increased 8.6% to GBP63.0 billion (31 March 2021: GBP58.0 billion)
underpinned by net inflows of GBP1.5 billion, market recovery and
good investment performance.
-- Loan books within Specialist Banking grew 7.2% to GBP28.3
billion (31 March 2021: GBP26.4 billion) given increased activity
levels and continued client acquisition in both geographies.
-- The cost to income ratio improved to 64.0% (1H2021: 72.0%),
with operating costs increasing 11.7%. Fixed operating expenditure
increased 3.3% reflecting continued cost discipline.
-- Pre-provision adjusted operating profit increased 61.2% to
GBP336.0 million (1H2021: GBP208.5 million), 9.3% ahead of
September 2019.
-- Expected credit loss (ECL) impairment charges were 84.5%
lower, resulting in a credit loss ratio (CLR) of 7bps (31 March
2021: 35bps; 1H2021: 47bps), reflecting strong asset quality and
higher recoveries.
-- Return on equity (ROE) was 11.2% for the period (1H2021:
5.3%) and return on tangible equity (ROTE) was 12.1% (1H2021:
5.8%).
-- Tangible net asset value (TNAV) per share increased 10.2%
(annualised) to 445.2p (31 March 2021: 423.6p). Net asset value
(NAV) per share increased 9.3% (annualised) to 479.2p (31 March
2021: 458.0p).
-- Maintained strong capital, funding, and liquidity positions.
-- The Board has proposed an interim dividend of 11.0p (1H2021:
5.5p) resulting in a payout ratio of 41.8%.
-- The Board has further resolved to distribute a 15% holding in Ninety One to shareholders.
Updated guidance for 31 March 2022 (FY2022)
-- Updated FY2022 adjusted earnings per share guidance of
between 48p and 53p (Range guided in May 2021: 36p - 41p).
Fani Titi, Group Chief Executive commented:
"The group delivered a strong first half result, underpinned by
resilient client franchises, strong revenue momentum and sound
asset quality - resulting in adjusted earnings per share of 26.3p,
ahead of comparable pre-COVID levels.
I am pleased to share that the Board has proposed an interim
dividend of 11.0p relative to 5.5p in 1H2021.
Further, in line with our strategy to optimise the allocation of
capital, the Board has resolved to distribute a 15% holding in
Ninety One to our shareholders.
I am grateful for the hard work and commitment of my colleagues,
which has enabled us to deliver this solid result.
The strength of the relationships we have built with our clients
is reflected in the trust they have continued to place in our
people and our organisation. The changes made to simplify and focus
the group are bearing fruit, positioning us well for the future.
Our resilient business model and strong balance sheet will support
our drive to achieve sustainable long-term value and growth for our
colleagues, clients, shareholders, and societies in which we
live."
Key financial data
This announcement covers the results of Investec plc and
Investec Limited (together "the Investec group" or "Investec" or
"the group") for the six months ended 30 September 2021 (1H2022).
Unless stated otherwise, comparatives relate to the group's
operations for the six-month period ended 30 September 2020
(1H2021). The average Rand/Pound Sterling exchange rate appreciated
by 9.6% relative to 1H2021.
Neutral
% currency
Performance 1H2022 1H2021 Variance change % change
------------------------------- --------- --------- -------- --------- -----------
Total operating income
before expected credit
losses (GBP'm) 951.1 729.0 222.1 30.5% 24.8%
Operating costs (GBP'm) 598.5 535.8 62.7 11.7% 7.8%
Adjusted operating profit
(GBP'm) 325.7 142.5 183.2 128.6% 116.9%
Adjusted earnings attributable
to shareholders (GBP'm) 242.3 104.4 137.9 132.2% 121.2%
Adjusted basic earnings
per share (pence) 26.3 11.2 15.1 134.8% 123.2%
Basic earnings per share
(pence) 25.0 9.6 15.4 160.4% 146.9%
Headline earnings per share
(pence) 24.7 9.2 15.5 168.5% 154.3%
Dividend per share (pence) 11.0 5.5
Dividend payout ratio 41.8% 49.1%
CLR (credit loss ratio) 0.07% 0.47%
Cost to income ratio 64.0% 72.0%
ROE (return on equity) 11.2% 5.3%
ROTE (return on tangible
equity) 12.1% 5.8%
------------------------------- ----- ----- -------- --------- -----------
Neutral
currency
Balance sheet 1H2022 FY2021 Variance % change % change
----------------------------- ------ ------ -------- ---------- -----------
Funds under management
(GBP'bn) 63.4 58.4 5.0 8.5% 8.4%
Customer accounts (deposits)
(GBP'bn) 36.4 34.4 2.0 5.5% 5.3%
Core loans and advances
(GBP'bn) 28.3 26.4 1.9 7.2% 7.0%
Cash and near cash (GBP'bn) 13.9 13.2 0.7 5.4% 5.3%
NAV per share (pence) 479.2 458.0 21.2 4.6% 4.3%
TNAV per share (pence) 445.2 423.6 21.6 5.1% 4.8%
----------------------------- ------ ------ -------- ----- ------
Neutral
Performance, capital and currency
leverage by geography 1H2022 1H2021 Variance % change % change
--------------------------- --------- -------- -------- ---------- -----------
Investec Limited (Southern
Africa)
Adjusted operating profit
(GBP'm) 191.9 99.1 92.8 93.6% 73.5%
Cost to income ratio 52.5% 58.7%
ROE 12.0% 8.1%
ROTE 12.0% 8.1%
CET1 13.9% 12.2%
Leverage 7.6% 7.6%
Investec plc (UK & Other)
Adjusted operating profit
(GBP'm) 133.8 43.4 90.4 208.6% n/a
Cost to income ratio 73.3% 81.1%
ROE 10.5% 2.8%
ROTE 12.2% 3.3%
CET1 11.1% 11.2%
Leverage 7.8% 7.9%
--------------------------- ----- ---- -------- ---------- -----------
Interim dividend
The Board has proposed an interim dividend of 11.0p (1H2021:
5.5p), translating to a 41.8% payout ratio, within the group's 30%
to 50% payout range.
Distribution of 15% holding in Ninety One
Given the group's strong capital generation; capital
optimisation strategy; and in line with previous communication that
15% of Ninety One is surplus to our capital requirements, the Board
has resolved to distribute the 15% holding to shareholders whilst
retaining an approximate 10% interest.
The distribution will be subject to regulatory, shareholder and
other approvals.
Announcements will be made in due course updating shareholders
on the distribution terms and process.
Outlook
Based on the group's performance to date, we have updated our
FY2022 adjusted earnings per share guidance to between 48p - 53p
(Range guided in May 2021: 36p - 41p). We will provide further
guidance in our March 2022 pre-close briefing.
The macro-economic environment is improving; however, global
recovery remains uneven. Underlying consumer and business
confidence in our core markets will continue to be tested by the
ongoing presence of COVID-19, along with the consequences of Brexit
in the UK and the slow progress in implementing economic reforms in
South Africa.
Enquiries
Investec Investor Relations
Results: Qaqambile Dwayi
Tel: +27 (0) 83 457 2134 (mobile)
General enquiries:
Tel: +27 (0) 11 286 7070 or investorrelations@investec.com
Brunswick (SA PR advisers)
Graeme Coetzee
Tel: +27 (0) 63 685 6053 (mobile)
Lansons (UK PR advisers)
Tom Baldock
Tel: +44 (0) 78 6010 1715 (mobile)
Presentation/conference call details
Investec management will host its interim results presentation
on Thursday 18 November at 11:00 (SA) / 09:00 (UK).
A live video webcast of the presentation will be available on
www.investec.com
About Investec
Investec partners with private, institutional, and corporate
clients, offering international banking, investments, and wealth
management services in two principal markets, South Africa, and the
UK, as well as certain other countries. The group was established
in 1974 and currently has 8,200+ employees.
Investec has a dual listed company structure with primary
listings on the London and Johannesburg Stock Exchanges.
Johannesburg and London
Sponsor: Investec Bank Limited
Group financial performance
Overview
Our performance reflects higher income levels and significantly
lower impairment charges, partly offset by increased operating
costs. The group's underlying client franchises showed resilience
with continued momentum in client acquisition in both geographies
which underpinned loan and deposit growth within banking, and net
inflows in wealth management.
The prior period was negatively impacted by the effects of
general economic contraction brought on by COVID-19 related
lockdowns which affected transactional levels, net interest
margins, valuations, and impairments. In this reporting period, we
have experienced the positive effects of higher client activity,
favourable liability repricing and sustained market improvement.
Additionally, risk management and risk reduction costs associated
with the UK structured products book were immaterial in the current
period.
Pre-provision adjusted operating profit increased 61.2% to
GBP336.0 million (1H2021: GBP208.5 million).
Revenue increased 30.5% to GBP951.1 million (1H2021: GBP729.0
million)
Net interest income increased 29.7% to GBP459.8 million (1H2021:
GBP354.4 million) driven by higher average lending books and lower
funding costs across the group as liabilities repriced and as the
UK business grew into the elevated liquidity built up in the early
months of the pandemic.
Non-interest revenue (NIR) increased by 31.2% to GBP491.4
million (1H2021: GBP374.6 million).
-- Net fee and commission income increased by 18.6% to GBP391.2
million (1H2021: GBP329.8 million) driven by improved client
activity across the specialist bank and higher average FUM in
Wealth & Investment.
-- Investment income decreased by 79.3% to GBP3.5 million
(1H2021: GBP16.9 million) due to the non-repeat of realisations in
the prior period.
-- Share of post-taxation profit of associates and joint venture
holdings increased 155.1% to GBP41.5 million (1H2021: GBP16.3
million) due to improved performance across the Group Investments'
portfolio.
-- Trading income arising from customer flow was GBP65.1 million
compared to a loss of GBP8.5 million in the prior period as risk
management and risk reduction costs associated with the UK
structured products book were c.GBP52 million lower than the prior
period (underpinned by risk mitigation strategies implemented on
the book and improving markets). We expect these costs to remain
immaterial should markets remain stable.
-- Trading income arising from balance sheet management and
other trading activities cost GBP18.5 million compared to income of
GBP8.1 million in the prior period, mainly resulting from currency
and interest rate hedges on the balance sheet.
-- Other operating income of GBP8.5 million (1H2021: GBP12.0
million) reflects the fair value movements of the Ninety One shares
held in the group's staff share scheme. These shares are reflected
on the group's balance sheet in other assets. The corresponding
liability is reflected in other liabilities with changes in the
value of the liability expensed through staff costs in operating
costs.
Expected credit loss (ECL) impairment charges decreased by 84.5%
to GBP10.2 million (1H2021: GBP66.0 million) resulting in a credit
loss ratio of 7bps (31 March 2021: 35bps; 2H2021: 24bps; 1H2021:
47bps)
Overall, the group has maintained prior period post-model
adjustments and in certain instances, introduced further
adjustments following model driven provision releases given
improved macro-economic factors. The post-model adjustments account
for risks which management believe are not reflected in the
models.
Operating costs increased 11.7% to GBP598.5 million (1H2021:
GBP535.8 million) driven by higher variable remuneration
The cost to income ratio improved to 64.0% from 72.0% in the
prior period. Operating costs increased by 11.7%, with fixed costs
increasing 3.3% in the period.
Taxation
The taxation charge on adjusted operating profit was GBP63.7
million (1H2021: GBP20.9 million), resulting in an effective tax
rate of 21.2% (1H2021: 18.8%).
In the UK, the lower effective tax rate of 11.0% (1H2021: 18.5%)
was driven by higher deferred tax assets arising from enacted
higher tax rates. We anticipate this effect to reduce in the second
half as the enacted bank surcharge reduces from 8% to 3%. The
surcharge is levied on bank profits in addition to the UK
corporation tax.
In SA, the higher rate of 27.1% (1H2021: 18.9%) was influenced
by one-off adjustments to certain deferred tax assets.
The effects of the above largely offset each other.
Profit or loss attributable to other non-controlling
interests
The profit attributable to other non-controlling interests was
GBP16.7 million compared to a loss of GBP15.3 million in the prior
period. This relates to the profit and loss attributable to
non-controlling interests in the Investec Property Fund (IPF).
Funding and liquidity
Customer deposits grew 5.5% to GBP36.4 billion (31 March 2021:
GBP34.5 billion). Cash and near cash of GBP13.9 billion (GBP7.3
billion in Investec plc and R134.6 billion in Investec Limited) at
30 September 2021 represents 38.4% of customer deposits.
The group comfortably exceeds Basel liquidity requirements for
the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio
(NSFR).
-- Investec Bank Limited (consolidated group) ended the period
to 30 September 2021 with the three-month average of its LCR at
158.0% and an NSFR of 110.6%.
-- For Investec plc, the LCR and NSFR are calculated using the
relevant EU regulation, applying our own interpretations where
required. The LCR reported to the PRA at 30 September 2021 was 284%
and the internally calculated NSFR was 127% at 30 September
2021.
Capital adequacy and leverage ratios
Capital and leverage ratios remain sound, ahead of
Board-approved minimum targets and regulatory requirements. The
CET1 and leverage ratio were 13.9% and 7.6% for Investec Limited
(partial AIRB) and 11.1% and 7.8% for Investec plc (standardised
approach) respectively.
Segmental performance
Wealth & Investment
Adjusted operating profit from the Wealth & Investment
business increased by 41.4% to GBP57.7 million (1H2021: GBP40.8
million).
Wealth & Investment Southern Africa UK & Other
1H2022 1H2021 Variance 1H2022 1H2021 Variance
% in
GBP'm GBP'm GBP'm % Rands GBP'm GBP'm GBP'm %
-------------------- ------ ------ ----- -------- -------- ------- ------- ----- --------
Operating income 49.4 36.5 12.9 35.4% 22.6% 173.9 155.1 18.8 12.1%
Operating costs (33.8) (24.5) (9.3) 38.0% 24.9% (131.7) (126.2) (5.5) 4.4%
Adjusted operating
profit 15.6 12.0 3.6 30.1% 17.8% 42.2 28.9 13.3 46.1%
-------------------- ------ ------ ----- ---- ---- ------- ------- ----- ----
Totals and variance determined in GBP'000 which may result in
rounding differences.
Southern Africa Wealth & Investment (in Rands)
Adjusted operating profit for SA Wealth & Investment
increased 17.8% (1H2021: R264 million).
The SA business reported 11.7% growth in FUM to R372.1 billion
(31 March 2021: R333.0 billion) supported by R10.1 billion of
discretionary and annuity net inflows (non-discretionary net
inflows of R6.8 billion), strong investment performance and
favourable market conditions.
Revenue grew by 22.6% supported by sustained inflows into our
offshore product range and higher average discretionary and annuity
assets.
Operating costs increased 24.9%, driven by higher variable
remuneration and increased average headcount of investment
specialists, wealth managers and information technology (IT)
personnel. The cost to income ratio increased to 68.5% (1H2021:
67.2%).
UK & Other Wealth & Investment
Adjusted operating profit for UK & Other Wealth &
Investment increased 46.1% to GBP42.2 million (1H2021: GBP28.9
million).
The business achieved record FUM during the period, reporting
GBP44.7 billion at 30 September 2021 (31 March 2021: GBP41.7
billion), supported by net inflows of GBP627 million.
Revenue grew by 12.1% supported by higher market levels,
positive net organic growth in FUM of 3.0%, as well as favourable
investment performance. Commission income returned to normalised
levels as the exceptionally high trading volumes seen at the onset
of COVID-19 were not repeated.
Operating costs were higher by 4.4% driven by continued
investment in technology, increased discretionary expenditure as
COVID-19 related restrictions eased and the normalisation of
variable staff compensation in line with business performance.
One-off costs in the base of c.GBP3.5 million (relating to
headcount reduction) were not repeated.
The UK domestic business (which accounts for 97.1% of FUM)
reported an operating margin of 26.0% (1H2021: 20.5%), while a
combined operating margin for UK & Other of 24.3% (1H2021:
18.6%) was achieved.
Specialist Banking
Adjusted operating profit from Specialist Banking increased
143.8% to GBP257.9 million (1H2021: GBP105.8 million).
Specialist Banking Southern Africa UK & Other
1H2022 1H2021 Variance 1H2022 1H2021 Variance
% in
GBP'm GBP'm GBP'm % Rands GBP'm GBP'm GBP'm %
------------------- ------- ------- ------ --------- --------- ------- ------- ------ ----------
Operating income 352.7 262.8 89.9 34.2% 21.6% 328.7 273.8 55.0 20.1%
ECL impairment
charges (4.0) (24.2) 20.2 (83.5%) (84.8%) (4.9) (39.9) 35.0 (87.8%)
Operating costs (175.6) (145.6) (29.9) 20.5% 9.1% (239.4) (221.5) (17.9) 8.1%
Loss attributable
to NCI 0.3 - 0.3 100.0% 100.0% - 0.5 (0.5) (100.0%)
Adjusted operating
profit 173.4 92.9 80.5 86.7% 69.1% 84.5 12.9 71.6 554.8%
------------------- ------- ------- ------ ----- ----- ------- ------- ------ ------
Totals and variance determined in GBP'000 which may result in
rounding differences.
Southern Africa Specialist Banking (in Rands)
Adjusted operating profit for the SA bank increased 69.1% to R3
460 million (1H2021: R2 046 million).
Strong revenue growth of 21.6%, was positively impacted by
recovery in NIR as the bank saw increased client activity levels
across the board, liability repricing, lower impairments, higher
average loan balances and good client acquisition. This was partly
offset by higher investment write-downs on certain portfolios in
the current period, mark-to-market (MTM) losses in balance sheet
management and the non-repeat of prior period gains from hedging
non-ZAR investments.
Net interest income increased 17.4% driven by lower funding
costs and higher average lending books (particularly within the
private bank).
Non-interest revenue increased 33.1% driven primarily by higher
fee income on the back of higher lending and forex (FX) turnover,
increased structuring fees and recovery in point-of-sale relative
to the prior period. Client flow trading income increased as equity
derivatives, FX and interest rate trading desks took advantage of
favourable market movements in a more predictable trading
environment.
Expected credit loss impairment charges decreased 84.8% to R81
million, resulting in a CLR of 4bps (31 March 2021: 18bps; 1H2021:
35bps). The decline was mainly driven by higher recoveries in the
period and lower specific impairments. Modelled impairments (stage
1 and 2) reduced given the improved economic outlook. Post-model
overlays were retained given the uncertainty that remains.
The cost to income ratio was lower at 49.7% (1H2021: 55.4%)
given continued cost discipline and higher revenues. Total
operating costs increased 9.1%, with fixed costs increasing by
3.7%.
Net core loans grew by 3.4% to R297.1 billion (31 March 2021:
R287.3 billion) driven primarily by the private clients' loan book.
Strong growth in corporate lending turnover was offset by elevated
repayment rates as clients used excess liquidity to pay down
facilities.
UK & Other Specialist Banking
Adjusted operating profit for the UK bank increased
substantially to GBP84.5 million (1H2021: GBP12.9 million).
Revenue grew by 20.1% influenced by lower cost of funds,
increased loan origination, FX flows, reduced structured products
book costs, and client acquisition within Private Banking.
Corporate lending activity increased across portfolios supported by
new client acquisition.
Net interest income increased 24.6% driven by lower cost of
funding and higher average lending books, partially offset by the
impact of the disposal of the Australian corporate book in March
2021.
Non-interest revenue increased 10.9% mainly attributable to:
-- Lower risk management and risk reduction costs associated
with the UK structured products book (GBP1.2 million in 1H2022 vs
GBP53.0 million in 1H2021), offset by
-- Decreased investment income due to lower net realisations in the current period, and
-- Reduced balance sheet management and other trading
activities, driven by costs associated with the early redemption of
a senior bond and interest rate hedges on the balance sheet.
Expected credit loss impairment charges decreased 87.8% to
GBP4.9 million, resulting in a credit loss ratio of 9bps (31 March
2021: 56bps; 1H2021: 60bps). Specific impairments in the period and
run-rate ECL charges on the performing book totalled GBP8.1 million
and the effect of updated macro-economic scenarios together with
the new management overlay and in-model adjustments resulted in an
ECL release of GBP3.2 million. This includes an increase in
post-model ECL overlay provisions of GBP5.0 million to GBP21.0
million, taking into consideration the uncertainties that
management believe remain in the environment.
Operating costs increased 8.1% driven by higher variable
remuneration and discretionary spend in line with revenue growth.
The increase was offset by cost savings from reduced headcount
across the business. Fixed costs were well contained, declining
3.5% over the period. The cost to income ratio reduced to 72.8%
(1H2021: 80.7%).
Net core loans grew by 11.0% (12.4% excluding Australia) to
GBP13.7 billion (31 March 2021: GBP12.3 billion) driven by strong
private clients book growth (up 19.6%) in the period and continued
client acquisition. Demand for corporate credit was strong across
several portfolios with book growth of 7.8% (9.5% excluding
Australia) since year end.
Group Investments
Group Investments includes the group's 25% holding in Ninety
One, 47.4% stake in the IEP Group, 24.31% held in the Investec
Property Fund (IPF) and some other equity investments.
Group Investments Southern Africa UK & Other
1H2022 1H2021 Variance 1H2022 1H2021 Variance
% in
GBP'm GBP'm GBP'm % Rands GBP'm GBP'm GBP'm %
------------------------- ------ ------ ------ ---------- ---------- ------ ------ ----- --------
Operating income
(net of ECL charges) 28.6 (12.7) 41.3 325.1% 306.3% 16.5 11.8 4.7 39.9%
Operating costs (0.9) (0.6) (0.3) 60.8% 44.6% - - - -
(Profit) /loss
attributable
to NCI (17.0) 14.7 (31.7) (215.5%) (206.8%) - - - -
Adjusted operating
profit 10.7 1.4 9.2 647.5% 643.7% 16.5 11.8 4.7 39.9%
------------------------- ------ ------ ------ ------ ------ ------ ------ ----- ----
Totals and variance determined in GBP'000 which may result in
rounding differences.
Adjusted operating profit from Group Investments increased by
105.5% to GBP27.2 million (1H2021: GBP13.2 million) driven by:
-- improved performance in the underlying investee companies within IEP,
-- growth in earnings from Ninety One in the period under review, and
-- lower negative fair value adjustments in the property
portfolio and the non-repeat of prior period losses in IPF's UK
associate investment.
Group Costs
Group Costs decreased by 1.7% to GBP17.0 million (1H2021:
GBP17.3 million).
Further information
Additional information on each of the business units is provided
in the group interim report published on the group's website:
http://www.investec.com.
On behalf of the boards of Investec plc and Investec Limited
Philip Hourquebie Fani Titi
Chair Group Chief Executive
17 November 2021
Notes to the commentary section above
Presentation of financial information
Investec operates under a Dual Listed Companies (DLC) structure
with primary listings of Investec plc on the London Stock Exchange
and Investec Limited on the JSE Limited.
In terms of the contracts constituting the DLC structure,
Investec plc and Investec Limited effectively form a single
economic enterprise in which the economic and voting rights of
ordinary shareholders of the companies are maintained in
equilibrium relative to each other. The directors of the two
companies consider that for financial reporting purposes, the
fairest presentation is achieved by combining the results and
financial position of both companies.
Accordingly, these interim results reflect the results and
financial position of the combined DLC group under UK adopted
International Financial Reporting Standards (IFRS) which comply
with IFRS as issued by the International Accounting Standards Board
(IASB), denominated in Pounds Sterling. In the commentary above,
all references to Investec or the group relate to the combined DLC
group comprising Investec plc and Investec Limited.
Following a review of the liquidity, capital position,
profitability, the business model and operational risks facing the
business including the ongoing impact of the COVID-19 pandemic, the
directors have a reasonable expectation that the Investec group
will be a going concern for a period of at least 12 months. The
results for the six month period ended 30 September 2021 has
accordingly been prepared on the going concern basis.
Unless the context indicates otherwise, all comparatives
included in the commentary above relate to the period ended 30
September 2020.
Amounts represented on a neutral currency basis for income
statement items assume that the relevant average exchange rates for
the period ended 30 September 2021 remain the same as those in the
prior period. Amounts represented on a neutral currency basis for
balance sheet items assume that the relevant closing exchange rates
at 30 September 2021 remain the same as those at 31 March 2021.
Neutral currency information is considered as pro-forma
financial information as per the JSE Listings Requirements and is
therefore the responsibility of the group's board of directors.
Pro-forma financial information was prepared for illustrative
purposes and because of its nature may not fairly present the
issuer's financial position, changes in equity, or results of
operations. The external auditors performed a review of the
pro-forma financial information and the opinion is available for
inspection at the registered office of Investec upon request.
Foreign currency impact
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 these
individual companies are reported in the local currencies in which
they are domiciled, including Rands, Australian Dollars, Euros and
US Dollars. These results are then translated into Pounds Sterling
at the applicable foreign currency exchange rates for inclusion in
the group's 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:
Six months to Year ended Six months to
30 September 30 September
2021 31 March 2021 2020
Currency
per GBP1.00 Closing Average Closing Average Closing Average
-------------------
South African Rand 20.29 19.94 20.36 21.33 21.58 22.05
Australian Dollar 1.86 1.85 1.81 1.82 1.80 1.85
Euro 1.16 1.16 1.17 1.12 1.10 1.12
US Dollar 1.35 1.39 1.38 1.31 1.29 1.27
------------------- ------- ------- ------- ------- ------- -------
Profit Forecast
The following matters highlighted in this announcement contain
forward-looking statements:
-- Adjusted EPS is expected to be between 48p and 53p in FY2022
The basis of preparation of this statement and the assumptions
upon which it was based are set out below. This statement is
subject to various risks and uncertainties and other factors -
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 in this Profit Forecast.
Any forward looking statements made are based on the knowledge
of the group at 17 November 2021.
This forward looking statement represents a profit forecast
under the Listing Rules. The Profit Forecast relates to the year
ending 31 March 2022.
The financial information on which the Profit Forecast was based
is the responsibility of the Directors of the group and has not
been reviewed and reported on by the group's auditors.
Basis of preparation
The Profit Forecast has been properly compiled using the
assumptions stated below, and on a basis consistent with the
accounting policies adopted in the group's 30 September 2021
reviewed interim financial statements, which are in accordance with
IFRS.
Assumptions
The Profit Forecast has been prepared on the basis of the
following assumptions during the forecast period:
Factors outside the influence or control of the Investec
Board:
-- There will be no material change in the political and/or
economic environment that would materially affect the Investec
group.
-- There will be no material change in legislation or regulation
impacting on the Investec group's operations or its accounting
policies.
-- There will be no business disruption that will have a
significant impact on the Investec group's operations, whether for
COVID-19 or otherwise.
-- The Rand/Pound Sterling and US Dollar/Pound Sterling exchange
rates and the tax rates remain materially unchanged from the
prevailing rates detailed above.
-- There will be no material changes in the structure of the
markets, client demand or the competitive environment.
Estimates and judgements
In preparation of the Profit Forecast, the group makes
estimations and applies judgement that could affect the reported
amount of assets and liabilities within the reporting period. Key
areas in which judgement is applied include:
-- Valuation of unlisted investments primarily in the private
equity, direct investments portfolios and embedded derivatives. Key
valuation inputs are based on the most relevant observable market
inputs, adjusted where necessary for factors that specifically
apply to the individual investments and recognising market
volatility.
-- The determination of ECL against assets that are carried at
amortised cost and ECL relating to debt instruments at fair value
through other comprehensive income (FVOCI) involves the assessment
of future cash flows which is judgmental in nature.
-- Valuation of investment properties is performed by
capitalising the budget net income of the property at the market
related yield applicable at the time.
-- The group's income tax charge and balance sheet provision are
judgmental in nature. This arises from certain transactions for
which the ultimate tax treatment can only be determined by final
resolution with the relevant local tax authorities. The group
recognises in its tax provision certain amounts in respect of
taxation that involve a degree of estimation and uncertainty where
the tax treatment cannot finally be determined until a resolution
has been reached by the relevant tax authority. The carrying amount
of this provision is often dependent on the timetable and progress
of discussions and negotiations with the relevant tax authorities,
arbitration processes and legal proceedings in the relevant tax
jurisdictions in which the group operates. Issues can take many
years to resolve and assumptions on the likely outcome would
therefore have to be made by the group.
-- Where appropriate, the group has utilised expert external
advice as well as experience of similar situations elsewhere in
making any such provisions. Determination of interest income and
interest expense using the effective interest rate method involves
judgement in determining the timing and extent of future cash
flows.
Accounting policies, significant judgements and disclosures
These reviewed condensed combined consolidated financial results
have been prepared in terms of the recognition and measurement
criteria of the presentation and disclosure requirements of IAS 34,
"Interim Financial Reporting" and IFRS as adopted by the UK which
comply with IFRS' as issued by the IASB. At 30 September 2021, UK
adopted IFRS are identical in all material respects to current IFRS
applicable to the group, with differences only in the effective
dates of certain standards.
The accounting policies applied in the preparation of the
results for the six months ended 30 September 2021 are consistent
with those adopted in the financial statements for year ended 31
March 2021.
The combined consolidated financial results for the period ended
30 September 2021 have been reviewed by Ernst & Young LLP and
Ernst & Young Inc., who expressed an unmodified review
conclusion. A copy of the auditors review opinion is available for
inspection at the company's registered office together with the
financial statements identified in the auditors report or on our
website.
The financial results have been prepared under the supervision
of Nishlan Samujh, the Group Finance Director. The interim
financial statements for the six months ended 30 September 2021 are
available on the group's website:
www.investec.com
Proviso
-- Please note that matters discussed in this announcement may
contain forward-looking statements which are subject to various
risks and uncertainties and other factors, including, but not
limited to:
- changes in the political and/or economic environment that
would materially affect the Investec group
- changes in the economic environment caused by the resulting
lockdowns and government programmes aimed to stimulate the
economy
- changes in legislation or regulation impacting the Investec
group's operations or its accounting policies
- changes in business conditions that will have a significant
impact on the Investec group's operations
- changes in exchange rates and/or tax rates from the prevailing
rates outlined in this announcement
- changes in the structure of the markets, client demand or the competitive environment.
-- 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 17 November 2021.
-- The information in the group's announcement for the six
months ended 30 September 2021, which was approved by the board of
directors on 17 November 2021, does not constitute statutory
accounts as defined in Section 435 of the UK Companies Act 2006.
The 31 March 2021 financial statements were filed with the
registrar and were unqualified with the audit report containing no
statements in respect of sections 498(2) or 498(3) of the UK
Companies Act.
-- The financial information on which forward-looking statements
are based is the responsibility of the directors of the group and
has not been reviewed and reported on by the group's auditors.
This announcement is available on the group's website:
www.investec.com
Definitions
-- Adjusted operating profit refers to operating profit before
goodwill, acquired intangibles and strategic actions and after
adjusting for earnings attributable to other non-controlling
interests. Non-IFRS measures such as adjusted operating profit are
considered as pro forma financial information as per the JSE
Listing Requirements. The pro forma financial information is the
responsibility of the group's Board of Directors. Pro-forma
financial information was prepared for illustrative purposes and
because of its nature may not fairly present the issuer's financial
position, changes in equity or results of operations. The external
auditors performed a review of the pro-forma financial information
and the opinion is available for inspection at the registered
office of Investec upon request.
-- Adjusted earnings is calculated by adjusting basic earnings
attributable to shareholders for the amortisation of acquired
intangible assets, non-operating items including strategic actions,
and earnings attributable to perpetual preference shareholders and
other additional tier 1 security holders.
-- Adjusted basic earnings per share is calculated as adjusted
earnings attributable to shareholders divided by the weighted
average number of ordinary shares in issue during the year.
-- Headline earnings is adjusted earnings plus the after tax
financial effect of strategic actions and the amortisation of
acquired intangible assets. Headline earnings is an earnings
measure required to be calculated and disclosed by the JSE and is
calculated in accordance with the guidance provided in Circular
1/2021.
-- Headline earnings per share (HEPS) is calculated as headline
earnings divided by the weighted average number of ordinary shares
in issue during the year.
-- Basic earnings is earnings attributable to ordinary
shareholders as defined by IAS33 Earnings Per Share.
-- Dividend payout ratio is calculated as the dividend per share
divided by adjusted earnings per share.
-- The credit loss ratio is calculated as expected credit loss
(ECL) impairment charges on gross core loans as a percentage of
average gross core loans subject to ECL.
-- The cost to income ratio is calculated as: operating costs
divided by operating income before expected credit loss impairment
charges (net of operating profits or losses attributable to other
non-controlling interests).
-- Return on average ordinary shareholders' equity (ROE) is
calculated as adjusted earnings attributable to ordinary
shareholders divided by average ordinary shareholders' equity.
-- Return on average tangible ordinary shareholders' equity
(ROTE) is calculated as adjusted earnings attributable to ordinary
shareholders divided by average tangible ordinary shareholders'
equity.
-- Core loans is defined as net loans to customers plus net own originated securitised assets.
-- NCI is non-controlling interests.
Financial assistance
Shareholders are referred to Special Resolution number 30, which
was approved at the annual general meeting held on 5 August 2021,
relating to the provision of direct or indirect financial
assistance in terms of Section 45 of the South African Companies
Act, No 71 of 2008 to related or inter-related companies.
Shareholders are hereby notified that in terms of S45(5)(a) of the
South African Companies Act, the boards of directors of Investec
Limited and Investec Bank Limited provided such financial
assistance during the period 1 April 2021 to 30 September 2021 to
various group subsidiaries.
Johannesburg and London
Sponsor: Investec Bank Limited
Exchange rates between local currencies and Pounds Sterling have
fluctuated over the period. The most significant impact arises from
the volatility of the Rand. The average Rand: Pound Sterling
exchange rate over the period has appreciated by 9.6% against the
comparative six-month period ended 30 September 2020, and the
closing rate has appreciated by 0.3% since 31 March 2021. The
following tables provide an analysis of the impact of the Rand on
our reported numbers.
Results in Pounds Sterling Results in Rands
Neutral
currency^
Six months Six months Six months Neutral Six months Six months
to 30 to 30 to 30 currency to 30 to 30
Sept Sept % Sept % Sept Sept %
2021 2020 change 2021 change 2021 2020 change
------------------ ---------- ---------- --------- ----------- ----------- ---------- ---------- ---------
Adjusted operating
profit before
taxation
(million) GBP326 GBP142 128.6% GBP308 116.9% R6 496 R3 143 106.7%
Earnings
attributable
to shareholders
(million) GBP250 GBP109 129.4% GBP236 117.4% R4 977 R2 405 106.9%
Adjusted earnings
attributable to
shareholders
(million) GBP242 GBP104 132.2% GBP230 121.2% R4 832 R2 309 109.3%
Adjusted earnings
per share 26.3 p 11.2 p134.8% 25.0p 123.2% 524c 248c 111.3%
Basic earnings
per share 25.0 p 9.6 p160.4% 23.7p 146.9% 499c 212c 135.4%
Headline earnings
per share 24.7 p 9.2 p168.5% 23.4p 154.3% 494c 213c 131.9%
------------------ --------- --------- ----- ----------- ------- ---------- ---------- -----
Results in Pounds Sterling Results in Rands
Neutral
currency^^ Neutral
At 30 At 31 At 30 currency At 30 At 31
Sept March % Sept % Sept March %
2021 2021 change 2021 change 2021 2021 change
----------------------- ------ ------ --------- ----------- ----------- ------- ------ ---------
Net asset value
per share 479.2 p458.0 p 4.6% 477.9p 4.3% 9 723c 9 326c 4.3%
Tangible net asset
value per share 445.2 p423.6 p 5.1% 443.9p 4.8% 9 033c 8 624c 4.7%
GBP5 GBP5 GBP5 R111 R108
Total equity (million) 514 312 3.8% 503 3.6% 880 161 3.4%
GBP53 GBP51 GBP53 R1 084 R1 048
Total assets (million) 454 512 3.8% 356 3.6% 593 867 3.4%
GBP28 GBP26 GBP28 R574 R538
Core loans (million) 336 438 7.2% 284 7.0% 951 320 6.8%
Cash and near cash GBP13 GBP13 GBP13 R283 R269
balances (million) 949 229 5.4% 926 5.3% 028 364 5.1%
Customer accounts GBP36 GBP34 GBP36 R737 R701
(deposits) (million) 353 449 5.5% 284 5.3% 610 446 5.2%
Funds under management GBP63 GBP58 GBP63 R1 286 R1 189
(million) 419 436 8.5% 352 8.4% 775 872 8.1%
----------------------- ----- ----- ----- ----------- ------ ------- ------ -----
^ For income statement items we have used the average Rand:
Pound Sterling exchange rate that was applied in the prior period,
i.e. 22.05.
^^ For balance sheet items we have assumed that the Rand: Pound
Sterling closing exchange rate has remained neutral since 31 March
2021.
Condensed combined consolidated income statement
Six months Six months
to to Year to
30 Sept 30 Sept 31 March
GBP'000 2021 2020^ 2021
---------------------------------------------------- ---------- ---------- -----------
Interest income 985 473 1 009 374 1 922 299
(1 144
Interest expense (525 699) (654 971) 193)
---------- ---------- ---------
Net interest income 459 774 354 403 778 106
Fee and commission income 414 181 349 668 791 153
Fee and commission expense (22 966) (19 842) (42 275)
Investment income 3 491 16 859 32 002
Share of post-taxation profit of associates
and joint venture holdings 41 502 16 272 42 459
Trading income/(loss) arising from
- customer flow 65 141 (8 527) 35 566
- balance sheet management and other trading
activities (18 452) 8 144 (18 903)
Other operating income 8 461 11 983 22 953
---------- ---------- ---------
Total operating income before expected
credit loss impairment charges 951 132 728 960 1 641 061
Expected credit loss impairment charges (10 237) (65 974) (99 438)
---------- ---------- ---------
Operating income 940 895 662 986 1 541 623
(1 164
Operating costs (598 453) (535 755) 513)
Operating profit before goodwill, acquired
intangibles and strategic actions 342 442 127 231 377 110
Impairment of goodwill - - (11 599)
Impairment of associates and joint venture
holdings - - (16 773)
Amortisation of acquired intangibles (7 773) (7 603) (15 287)
Amortisation of acquired intangibles of
associates (4 628) (4 625) (9 268)
Closure and rundown of the Hong Kong direct
investments business (596) (2 158) 7 386
Profit before taxation 329 445 112 845 331 569
Taxation on operating profit before goodwill,
acquired intangibles and strategic actions (63 720) (20 892) (74 539)
Taxation on acquired intangibles and strategic
actions 620 1 558 1 712
Profit after taxation 266 345 93 511 258 742
Loss/(profit) attributable to other non-controlling
interests (16 712) 15 255 472
Loss attributable to non-controlling interests
relating to impairments of associates - - 9 126
Earnings attributable to shareholders 249 633 108 766 268 340
---------------------------------------------------- ---------- ---------- ---------
^ Restated as detailed below.
Earnings per share
Six months Six months
to to Year to
30 Sept 30 Sept 31 March
2021 2020 2021
----------------------------------- ---------- ---------- -----------
Earnings per share - pence 25.0 9.6 25.2
Diluted earnings per share - pence 24.4 9.5 24.9
----------------------------------- ---------- ---------- ---------
Consolidated statement of total comprehensive income
Six months Six months
to to Year to
30 Sept 30 Sept 31 March
GBP'000 2021 2020 2021
----------------------------------------------- ---------- ---------- -----------
Profit after taxation 266 345 93 511 258 742
Other comprehensive income:
Items that may be reclassified to the income
statement
Fair value movements on cash flow hedges taken
directly to other comprehensive income^ (5 822) (4 427) 242
Fair value movements on debt instruments at
FVOCI taken directly to other
comprehensive income^ 4 004 84 566 152 355
Gain on realisation of debt instruments at
FVOCI recycled through the
income statement^ (847) (1 446) (717)
Foreign currency adjustments on translating
foreign operations 14 903 17 837 111 779
Items that will never be reclassified to the
income statement
Effect of rate change on deferred taxation
relating to adjustment for IFRS 9 1 049 828 380
Fair value movements on equity instruments
at FVOCI taken directly to other
comprehensive income^ 1 043 736 1 778
Remeasurement of net defined benefit pension
liability - (32) (39)
Net gain/(loss) attributable to own credit
risk^ 4 928 (1 725) (850)
Total comprehensive income 285 603 189 848 523 670
Total comprehensive income attributable to
ordinary shareholders 247 456 171 379 448 637
Total comprehensive income/(loss) attributable
to non-controlling interests 18 780 (1 159) 37 846
Total comprehensive income attributable to
perpetual preferred securities 19 367 19 628 37 187
Total comprehensive income 285 603 189 848 523 670
----------------------------------------------- ---------- ---------- ---------
^ Net of taxation of GBP3.4 million (30 September 2020: GBP22.3
million; 31 March 2021: GBP38.5 million).
Combined consolidated balance sheet
At 30 Sept 31 March 30 Sept
GBP'000 2021 2021 2020^
-------------------------------------------------- --------- --------- -----------
Assets
3 957 3 517 2 477
Cash and balances at central banks 654 100 636
2 602 2 699 3 079
Loans and advances to banks 105 317 807
Non-sovereign and non-bank cash placements 475 875 439 841 363 350
Reverse repurchase agreements and cash collateral 3 820 3 575 4 964
on securities borrowed 376 713 729
3 837 3 711 4 264
Sovereign debt securities 115 623 692
1 440 1 121
Bank debt securities 998 730 590 173
1 246 1 364 1 427
Other debt securities 231 235 174
1 206 1 714 1 885
Derivative financial instruments 299 743 399
1 085 1 024
Securities arising from trading activities 375 671 658 552
Investment portfolio 928 741 909 050 994 543
27 966 26 041 24 855
Loans and advances to customers 330 087 877
Own originated loans and advances to customers
securitised 372 602 401 912 307 532
Other loans and advances 109 006 102 135 100 659
Other securitised assets 133 690 140 087 122 892
Interests in associated undertakings and
joint venture holdings 695 756 679 157 722 227
Current taxation assets 38 141 60 325 61 523
Deferred taxation assets 216 290 246 622 256 581
1 733 2 165 1 850
Other assets 188 438 502
Property and equipment 344 729 329 972 341 343
Investment properties 788 540 832 061 799 588
Goodwill 259 842 259 805 270 991
Software 11 363 12 574 13 045
Other acquired intangible assets 51 700 58 968 66 224
Non-current assets classified as held for
sale 75 752 51 783 87 248
--------- --------- ---------
53 397 51 459 50 562
698 949 287
Other financial instruments at fair value
through profit
or loss in respect of liabilities to customers 56 662 52 405 37 178
53 454 51 512 50 599
360 354 465
Liabilities
2 294 2 403 3 319
Deposits by banks 873 712 727
1 973 2 190 1 727
Derivative financial instruments 996 487 813
Other trading liabilities 225 498 326 189 577 821
Repurchase agreements and cash collateral 1 179 1 003 1 692
on securities lent 581 312 050
36 353 34 449 32 551
Customer accounts (deposits) 007 430 697
1 971 1 892 1 815
Debt securities in issue 123 319 257
Liabilities arising on securitisation of
own originated loans and advances 155 200 160 646 73 042
Liabilities arising on securitisation of
other assets 104 215 108 281 109 107
Current taxation liabilities 54 104 78 790 95 940
Deferred taxation liabilities 19 448 40 333 50 727
2 116 2 013 2 025
Other liabilities 098 003 931
--------- --------- ---------
46 447 44 666 44 039
143 502 112
Liabilities to customers under investment
contracts 54 018 49 798 34 494
Insurance liabilities, including unit-linked
liabilities 2 644 2 607 2 684
--------- --------- ---------
46 503 44 718 44 076
805 907 290
1 436 1 480 1 447
Subordinated liabilities 763 951 948
47 940 46 199 45 524
568 858 238
Equity
Ordinary share capital 247 247 247
1 517 1 517 1 517
Ordinary share premium 852 852 852
Treasury shares (296 714) (267 508) (261 729)
Other reserves (767 299) (788 222) (910 668)
3 939 3 772 3 699
Retained income 028 628 652
--------- --------- ---------
4 393 4 234 4 045
Ordinary shareholders' equity 114 997 354
Perpetual preference share capital and premium 174 579 174 053 172 349
--------- --------- ---------
Shareholders' equity excluding non-controlling 4 567 4 409 4 217
interests 693 050 703
Other Additional Tier 1 securities in issue 373 705 335 111 296 809
Non-controlling interests 572 394 568 335 560 715
--------- --------- ---------
- Perpetual preferred securities issued by
subsidiaries 73 006 72 750 71 106
- Non-controlling interests in partially
held subsidiaries 499 388 495 585 489 609
--------- --------- ---------
5 513 5 312 5 075
Total equity 792 496 227
53 454 51 512 50 599
Total liabilities and equity 360 354 465
-------------------------------------------------- --------- --------- ---------
^ Restated as detailed below.
Condensed consolidated statement of changes in equity
Six months Six months
to to Year to
30 Sept 30 Sept 31 March
GBP'000 2021 2020 2021
------------------------------------------------ ---------- ---------- -----------
Balance at the beginning of the period 5 312 496 4 897 632 4 897 632
Total comprehensive income 285 603 189 848 523 670
Share-based payments adjustments 9 515 18 353 19 121
Dividends paid to ordinary shareholders (72 361) - (53 346)
Dividends paid to perpetual preference
shareholders included in non-controlling
interests and Other Additional Tier 1 security
holders (19 367) (19 628) (37 187)
Dividends paid to non-controlling interests (14 721) (11 029) (32 385)
Redemption of perpetual preference shares - - (6 274)
Issue of Other Additional Tier 1 securities
in issue 38 294 - 35 508
Net equity impact of non-controlling interest
movements - 1 687 (6 128)
Movement of treasury shares (26 718) (1 861) (10 161)
Net equity movements of interests in associated
undertakings 1 051 225 (17 954)
Balance at the end of the period 5 513 792 5 075 227 5 312 496
------------------------------------------------ ---------- ---------- ---------
Condensed consolidated cash flow statement
Six months Six months
to to Year to
30 Sept 30 Sept 31 March
GBP'000 2021 2020^ 2021
Net cash inflow/(outflow) from operating (2 250
activities 551 100 741) (557 837)
Net cash inflow/(outflow) from investing
activities 35 705 (6 967) 1 414
Net cash outflow from financing activities (204 181) (65 532) (134 626)
Effects of exchange rates on cash and cash
equivalents 6 554 49 930 146 030
Net increase/(decrease) in cash and cash (2 273
equivalents 389 178 310) (545 019)
Cash and cash equivalents at the beginning
of the period 6 551 511 7 096 530 7 096 530
Cash and cash equivalents at the end of
the period 6 940 689 4 823 220 6 551 511
------------------------------------------- ---------- ---------- ---------
Cash and cash equivalents is defined as including: cash and
balances at central banks, on demand loans and advances to banks
and non-sovereign and non-bank cash placements (all of which have a
maturity profile of less than three months).
^ Restated as detailed below.
Combined consolidated segmental analysis
Segmental geographical and business analysis of adjusted
operating profit before goodwill, acquired intangibles,
non-operating items, taxation and after other non-controlling
interests.
Specialist
Banking^
------------------------
Private Client
------------------------
For the six
months
to 30 September
2021
Corporate,
Investment
Wealth Private Banking Group Group Total % of
GBP'000 & Investment Banking and Other Investments costs group % change total
----------------
133
UK and Other 42 175 11 290 73 205 16 490 (9 339) 821 208.6% 41.1%
100 191
Southern Africa 15 559 735 72 644 10 674 (7 703) 909 93.6% 58.9%
Adjusted
operating 112 145 (17 325
profit 57 734 025 849 27 164 042) 730 128.6% 100.0%
Non-controlling
interest* 16 712
Adjusted
operating
profit before
non-controlling 342
interests 442
% change 41.4% 170.6% 126.6% 105.5% (1.7%) 128.6%
% of total 17.7% 34.4% 44.8% 8.3% (5.2)% 100.0%
Total assets
GBP'mn 1 369 14 970 35 293 1 822 - 53 454
Specialist
Banking^
--------------------------
Private Client
----------------------------
For the six months
to 30 September
2020^
Corporate,
Investment
Wealth Private Banking Group Group Total % of
GBP'000 & Investment Banking and Other Investments costs group total
-------------------
(10
UK and Other 28 877 (3 148) 16 051 11 791 208) 43 363 31.8%
Southern Africa 11 960 44 550 48 320 1 428 (7 135) 99 123 68.2%
Adjusted operating (17 142
profit 40 837 41 402 64 371 13 219 343) 486 100.0%
Non-controlling (15
interest* 255)
Adjusted operating
profit before
non-controlling 127
interests 231
% of total 28.7% 29.0% 45.2% 9.3% (12.2)% 100.0%
Total assets GBP'mn 1 332 12 332 34 941 1 994 - 50 599
* Profit/(loss) attributable to other non-controlling interests
predominantly relates to the Investec Property Fund Limited.
^ The results of Investec Private Banking and Investec
Corporate, Investment Banking and Other were disclosed as separate
segments for the first time in the 31 March 2021 results. Investec
Private Banking and Investec Corporate, Investment Banking and
Other were previously presented as components of the Investec
Specialist Bank. Comparatives have been restated.
Net fee and commission income
For the six months to 30 September 2021 UK and Southern
GBP'000 Other Africa Total
--------------------------------------------------------- ------- -------- ----------
Wealth & Investment net fee and commission
income 173 045 47 494 220 539
------- -------- --------
Fund management fees/fees for funds under management 152 287 27 354 179 641
Private client transactional fees 21 103 20 978 42 081
Fee and commission expense (345) (838) (1 183)
------- -------- --------
Specialist Banking net fee and commission income 57 982 87 167 145 149
------- -------- --------
Specialist Banking fee and commission income^ 64 916 100 154 165 070
Specialist Banking fee and commission expense (6 934) (12 987) (19 921)
------- -------- --------
Group Investments net fee and commission income - 25 527 25 527
------- -------- --------
Group Investments fee and commission income - 27 389 27 389
Group Investments fee and commission expense - (1 862) (1 862)
------- -------- --------
Net fee and commission income 231 027 160 188 391 215
------- -------- --------
Annuity fees (net of fees payable) 159 969 123 067 283 036
Deal fees 71 058 37 121 108 179
--------------------------------------------------------- ------- -------- --------
^ Included in Specialist Banking is fee income of GBP40.2
million (2020: GBP32.7 million) for operating lease income which is
out of the scope of IFRS 15 - Revenue from contracts with
customers.
Income statement restatements
Interest income and fee and commission income restatement
For the six months to 30 September 2020, management identified
that revenue relating to services rendered to customers (for the
facilitation of import and export transactions) was previously
reported within interest income rather than within fee and
commission income.
As a result, interest income and fee and commission income for
the prior period have been restated. The restatement has no impact
on total operating income in the income statement, headline
earnings, the statement of cash flows and the balance sheet.
The impact of the restatement on the 30 September 2020 income
statement is:
GBP'000 Six months
to Six months
30 Sept to
2020 30 Sept
as previously 2020
reported Reclassification restated
--------------------------
Interest income 1 014 392 (5 018) 1 009 374
Fee and commission income 344 650 5 018 349 668
-------------------------- -------------- ---------------- ----------
Balance sheet restatements
Current taxation assets and other assets
At 31 March 2021, current taxation assets, which were previously
reported within other assets, were reported as a separate line item
in accordance with IAS 1 Presentation of Financial Statements. As
at 30 September 2020, current taxation assets of GBP61.5 million
have been re-presented to reflect the same basis.
Gilts and total return swaps reclassification
As at 31 March 2021, amounts previously reported within
sovereign debt securities, derivative financial instruments and
securities arising from trading were corrected to present them as
reverse repurchase agreements and cash collateral on securities
borrowed. This change in accounting treatment has been made where
sovereign debt securities have been purchased at the same time as
total return swaps with the same counterparty, such that the
combined position has the economic substance of secured lending.
The prior year balance sheet has been restated to reflect the same
basis. This change has no impact on the income statement.
The impact of this change on the 30 September 2020 balance sheet
is:
At 30 Sept
2020 At 30 Sept
as previously 2020
GBP'000 reported Reclassification restated
-------------------------------------------
Assets
Reverse repurchase agreements and cash
collateral on securities borrowed 4 124 591 840 138 4 964 729
Sovereign debt securities 4 898 936 (634 244) 4 264 692
Derivative financial instruments 1 885 922 (523) 1 885 399
Securities arising from trading activities 929 143 (270 591) 658 552
50 599
Total assets 50 664 685 (65 220) 465
Liabilities
Derivative financial instruments 1 793 033 (65 220) 1 727 813
45 524
Total liabilities 45 589 458 (65 220) 238
------------------------------------------- -------------- ---------------- ----------
Cash flow statement restatements
As at 31 March 2021, amounts previously reported within loans
and advances to banks were correctly presented as cash and cash
equivalents. This change has been made to include items previously
reported as loans and advances to banks identified as short term in
nature, with a maturity date of less than three months, which
therefore meet the definition of cash and cash equivalents.
The prior year has been restated as follows:
Six months
to Six months
30 Sept to
2020 30 Sept
as previously 2020
GBP'000 reported Restatement restated
(3 038 (2 250
Net cash outflow from operating activities 706) 787 965 741)
Net cash outflow from investing activities (6 967) - (6 967)
Net cash outflow from financing activities (59 855) (5 677) (65 532)
Effects of exchange rate changes on cash
and cash equivalents 41 935 7 995 49 930
Net (decrease)/increase in cash and cash (3 063 (2 273
equivalents 593) 790 283 310)
Cash and cash equivalents at the beginning
of the period 6 193 708 902 822 7 096 530
Cash and cash equivalents at the end of
the period 3 130 115 1 693 105 4 823 220
------------------------------------------- -------------- ----------- ----------
In addition to the above, we have also re-presented the
operating section of the cash flow statement in our preliminary
financial results as the disaggregation between operating assets
and operating liabilities does not provide additional meaningful
information to users.
Contingent liabilities
The group assessed its exposure to legal proceedings and the
appropriateness of related provisions recognised on the balance
sheet as at 30 September 2021. It was concluded that the provisions
held as at 31 March 2021, in relation to the matters set out in
Note 54 of the Annual Financial Statements, continue to reflect our
best estimate of the potential financial outflows that may arise
.
Analysis of assets and liabilities by measurement category
At 30 September 2021
Non-financial
instruments
Total or
instruments scoped
at Amortised out of
GBP'000 fair value cost IFRS 9 Total
----------------------------------------
Assets
Cash and balances at central banks - 3 957 654 - 3 957 654
Loans and advances to banks - 2 602 105 - 2 602 105
Non-sovereign and non-bank cash
placements 11 747 464 128 - 475 875
Reverse repurchase agreements and
cash collateral on securities borrowed 829 570 2 990 806 - 3 820 376
Sovereign debt securities 3 249 220 587 895 - 3 837 115
Bank debt securities 852 836 588 162 - 1 440 998
Other debt securities 654 361 591 870 - 1 246 231
Derivative financial instruments 1 206 299 - - 1 206 299
Securities arising from trading
activities 1 085 375 - - 1 085 375
Investment portfolio 928 741 - - 928 741
25 563 27 966
Loans and advances to customers 2 402 915 415 - 330
Own originated loans and advances
to customers securitised - 372 602 - 372 602
Other loans and advances - 109 006 - 109 006
Other securitised assets 101 851 31 839 - 133 690
Interests in associated undertakings
and joint venture holdings - - 695 756 695 756
Current taxation assets - - 38 141 38 141
Deferred taxation assets - - 216 290 216 290
Other assets 272 394 991 181 469 613 1 733 188
Property and equipment - - 344 729 344 729
Investment properties - - 788 540 788 540
Goodwill - - 259 842 259 842
Software - - 11 363 11 363
Other acquired intangible assets - - 51 700 51 700
Non-current assets classified as
held for sale 23 373 - 52 379 75 752
------------ --------- ------------- ---------
11 618 38 850 53 397
682 663 2 928 353 698
Other financial instruments at
fair value through profit or loss
in respect of liabilities to customers 56 662 - - 56 662
11 675 38 850 53 454
344 663 2 928 353 360
Liabilities
Deposits by banks - 2 294 873 - 2 294 873
Derivative financial instruments 1 973 996 - - 1 973 996
Other trading liabilities 225 498 - - 225 498
Repurchase agreements and cash
collateral on securities lent 50 237 1 129 344 - 1 179 581
34 994 36 353
Customer accounts (deposits) 1 358 492 515 - 007
Debt securities in issue 89 476 1 881 647 - 1 971 123
Liabilities arising on securitisation
of own originated loans
and advances - 155 200 - 155 200
Liabilities arising on securitisation
of other assets 104 215 - - 104 215
Current taxation liabilities - - 54 104 54 104
Deferred taxation liabilities - - 19 448 19 448
Other liabilities 99 214 1 249 058 767 826 2 116 098
------------ --------- ------------- ---------
41 704 46 447
3 901 128 637 841 378 143
Liabilities to customers under
investment contracts 54 018 - - 54 018
Insurance liabilities, including
unit-linked liabilities 2 644 - - 2 644
------------ --------- ------------- ---------
41 704 46 503
3 957 790 637 841 378 805
Subordinated liabilities 336 750 1 100 013 - 1 436 763
42 804 47 940
4 294 540 650 841 378 568
---------------------------------------- ------------ --------- ------------- ---------
Financial instruments at fair value
The table below analyses recurring fair value measurements for
financial assets and financial liabilities. These fair value
measurements are categorised into different levels in the fair
value hierarchy based on the inputs to the valuation technique
used.
The different levels are identified as follows:
Level 1 - quoted (unadjusted) prices in active markets for
identical assets or liabilities.
Level 2 - inputs other than quoted prices included within level
1 that are observable for the asset or liability, either
directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
Fair value category
At 30 September 2021
Total instruments
at fair
GBP'000 value Level 1 Level 2 Level 3
----------------------------------------
Assets
Non-sovereign and non-bank cash
placements 11 747 - 11 747 -
Reverse repurchase agreements and
cash collateral on securities borrowed 829 570 - 829 570 -
Sovereign debt securities 3 249 220 3 249 220 - -
Bank debt securities 852 836 338 939 513 897 -
Other debt securities 654 361 76 211 489 081 89 069
Derivative financial instruments 1 206 299 4 897 1 156 603 44 799
Securities arising from trading
activities 1 085 375 1 075 735 4 628 5 012
Investment portfolio 928 741 30 692 11 319 886 730
Loans and advances to customers 2 402 915 - 1 058 205 1 344 710
Other securitised assets 101 851 - - 101 851
Other assets 272 394 272 394 - -
Non-current assets classified as
held for sale 23 373 - - 23 373
Other financial instruments at
fair value through profit or loss
in respect of liabilities to customers 56 662 56 662 - -
11 675
344 5 104 750 4 075 050 2 495 544
Liabilities
Derivative financial instruments 1 973 996 34 526 1 892 559 46 911
Other trading liabilities 225 498 92 365 133 133 -
Repurchase agreements and cash
collateral on securities lent 50 237 - 50 237 -
Customer accounts (deposits) 1 358 492 - 1 358 492 -
Debt securities in issue 89 476 - 89 476 -
Liabilities arising on securitisation
of other assets 104 215 - - 104 215
Other liabilities 99 214 - 52 876 46 338
Liabilities to customers under
investment contracts 54 018 - 54 018 -
Insurance liabilities, including
unit-linked liabilities 2 644 - 2 644 -
Subordinated liabilities 336 750 336 750 - -
4 294 540 463 641 3 633 435 197 464
Net financial assets at fair value 7 380 804 4 641 109 441 615 2 298 080
---------------------------------------- ----------------- --------- --------- ---------
Transfers between level 1 and level 2
There were no transfers between level 1 and level 2 in the
current period.
Measurement of financial assets and liabilities at level 2
The table below sets out information about the valuation
techniques used at the end of the reporting period in measuring
financial instruments categorised as level 2 in the fair value
hierarchy:
Valuation basis/techniques Main inputs
------------------------------
Assets
-----------------------------------------------------------------------------------------
Non-sovereign and non-bank Discounted cash flow Yield curves
cash placements model
----------------------------- ------------------------------ --------------------------
Reverse repurchase agreements Discounted cash flow Yield curves, discount
and cash collateral model, Hermite interpolation, rates, volatilities
on securities borrowed Black-Scholes
----------------------------- ------------------------------ --------------------------
Bank debt securities Discounted cash flow Yield curves
model
----------------------------- ------------------------------ --------------------------
Other debt securities Discounted cash flow Yield curves, NCD curves
model and swap curves, discount
rates, external prices,
broker quotes
----------------------------- ------------------------------ --------------------------
Derivative financial Discounted cash flow Discount rate, risk-free
instruments model, Hermite interpolation, rate, volatilities,
industry standard derivative forex forward points
pricing models including and spot rates, interest
Black-Scholes and Local rate swap curves and
Volatility credit curves
----------------------------- ------------------------------ --------------------------
Securities arising from Standard industry derivative Interest rate curves,
trading activities pricing model Discounted implied bond spreads,
cash flow model equity volatilities,
yield curves
----------------------------- ------------------------------ --------------------------
Investment portfolio Discounted cash flow Discount rate and fund
model, relative valuation unit price, net assets
model comparable quoted
inputs
----------------------------- ------------------------------ --------------------------
Loans and advances to Discounted cash flow Yield curves
customers model
----------------------------- ------------------------------ --------------------------
Liabilities
Derivative financial Discounted cash flow Discount rate, risk-free
instruments model, Hermite interpolation, rate, volatilities,
industry standard derivative forex forward points
pricing models including and spot rates, interest
Black-Scholes and Local rate swap curves and
Volatility credit curves
----------------------------- ------------------------------ --------------------------
Other trading liabilities Discounted cash flow Discount rate, risk-free
model, Hermite interpolation, rate, volatilities,
industry standard derivative forex forward points
pricing models including and spot rates, interest
Local Volatility rate swap curves and
credit curves
----------------------------- ------------------------------ --------------------------
Repurchase agreements Discounted cash flow Yield curves, discount
and cash collateral model, Hermite interpolation rates
on securities lent
----------------------------- ------------------------------ --------------------------
Customer accounts (deposits) Discounted cash flow Yield curves, discount
model rates
----------------------------- ------------------------------ --------------------------
Debt securities in issue Discounted cash flow Discount rate, risk-free
model, Hermite interpolation, rate, volatilities,
industry standard derivative forex forward points
pricing models including and spot rates, interest
Local Volatility rate swap curves and
credit curves
----------------------------- ------------------------------ --------------------------
Other liabilities Discounted cash flow Yield curves
model
----------------------------- ------------------------------ --------------------------
Liabilities to customers Current price of underlying Listed prices
under investment contracts unitised assets
----------------------------- ------------------------------ --------------------------
Insurance liabilities, Current price of underlying Listed prices
including unit-linked unitised assets
liabilities
----------------------------- ------------------------------ --------------------------
Level 3 instruments
The following tables show a reconciliation of the opening
balances to the closing balances for level 3 financial instruments.
All instruments are at fair value through profit or loss.
Loans and
advances Other balance
Investment to Other securitised sheet
GBP'000 portfolio customers assets assets Total
-------------------------------------- ---------- ---------- ----------------- ------------- -----------
Assets
Balance at 1 April 2021 862 528 1 047 390 107 259 176 250 2 193 427
Total gains 10 417 29 787 864 20 974 62 042
---------- ---------- ----------------- ------------- ---------
In the income statement 10 417 28 292 864 20 974 60 547
In the statement of comprehensive
income - 1 495 - - 1 495
---------- ---------- ----------------- ------------- ---------
Purchases 54 937 1 102 958 - 18 962 1 176 857
Sales (30 177) (566 082) - (18 892) (615 151)
Settlements (16 688) (315 936) (6 272) (38 868) (377 764)
Transfers into level 3 - 34 095 - - 34 095
Foreign exchange adjustments 5 713 12 498 - 3 827 22 038
Balance at 30 September
2021 886 730 1 344 710 101 851 162 253 2 495 544
-------------------------------------- ---------- ---------- ----------------- ------------- ---------
For the period ended 30 September 2021, GBP34.1 million of loans
and advances to customers measured at fair value has been
transferred from level 2 to level 3, due to inputs related to the
measurement of credit risk becoming unobservable in the market.
Liabilities
arising
on securitisation Other balance
of other sheet
GBP'000 assets liabilities Total
------------------------------------- ------------------ ------------- ---------
Liabilities
Balance at 1 April 2021 108 281 73 592 181 873
Total losses in the income statement 627 20 664 21 291
Repayment - (1 179) (1 179)
Settlements (4 693) (803) (5 496)
Foreign exchange adjustments - 975 975
Balance as at 30 September 2021 104 215 93 249 197 464
------------------------------------- ------------------ ------------- -------
The group transfers between levels within the fair value
hierarchy when the significance of the unobservable inputs change
or if the valuation methods change.
The following table quantifies the gains or (losses) included in
the income statement recognised on level 3 financial
instruments:
For the year to 30 September 2021
GBP'000 Total Realised Unrealised
------------------------------------------------
Total gains or (losses) included in the
income statement for the year
Net interest income 31 876 21 955 9 921
Fee and commission (expense) - - -
Investment income* 8 534 13 426 (4 892)
Trading income arising from customer flow (1 154) - (1 154)
Trading income arising from balance sheet
management and other trading activities - - -
39 256 35 381 3 875
Total gains or (losses) included in other
comprehensive income for the year
Gains on realisation on debt instruments
at FVOCI recycled through the income statement 302 302 -
Fair value movements on debt instruments
at FVOCI taken directly to other comprehensive
income 1 495 - 1 495
1 797 302 1 495
------------------------------------------------ ------- -------- ----------
* Included within the investment income statement balance are
unrealised gains of GBP0.3 million presented within operational
items in the income statement.
Sensitivity of fair values to reasonably possible alternative
assumptions by level 3 instrument type
The fair value of financial instruments in level 3 are measured
using valuation techniques that incorporate assumptions that are
not evidenced by prices from observable market data. The below
valuations have been considered taking the ongoing global pandemic
of COVID-19 into consideration. The following table shows the
sensitivity of these fair values to reasonably possible alternative
assumptions, determined at a transactional level:
Range Favourable Unfavourable
which changes changes
unobservable
Balance input
sheet has been
value changed
At 30 September Significant unobservable GBP'000 GBP'000
2021 GBP'000 input changed
--------- ---------- --------------
Assets
Potential impact
Other debt securities 89 069 on income statement 3 390 (6 327)
---------- ------------
Credit spreads 0.7%-1.0% 86 (219)
Cash flow adjustments CPR 6.1% 3 (63)
Other^ ^ 3 301 (6 045)
---------- ------------
Derivative financial Potential impact
instruments 44 799 on income statement 3 839 (4 309)
---------- ------------
5.3% -
Volatilities 12.6% 4 (8)
Underlying asset
value^^ ^^ 3 363 (3 363)
Cashflow adjustment CPR 6.1% 7 (7)
Other^ ^ 465 (931)
---------- ------------
Securities arising Potential impact
from trading activities 5 012 on income statement
---------- --------------
Cash flow adjustments CPR 9.8% 647 (879)
---------- ------------
Potential impact
Investment portfolio 886 730 on income statement 103 097 (135 820)
---------- ------------
Price earnings multiple 5.5x-15.5x 14 125 (26 689)
Underlying asset
value^^ ^^ 1 681 (3 356)
EBITDA ** 19 278 (19 188)
Discount rate 17.5%-18.5% 4 462 (5 379)
Cash flows ** 1 857 (1 379)
Underlying asset
value^^ ** 2 916 (3 442)
Precious and industrial
metal prices (5%)-5% 1 350 (1 350)
Property values # 39 330 (39 330)
Other^ ^ 18 098 (35 707)
---------- ------------
Loans and advances Potential impact
to customers 1 344 710 on income statement 31 560 (50 142)
---------- ------------
Credit spreads 0.2% -34.3% 8 390 (16 486)
Price earnings multiple 3.5x-4.1x 8 158 (6 011)
Underlying asset
value^^ ^^ 4 380 (8 457)
Property values ^ 5 159 (8 242)
Other^ ^ 5 473 (10 946)
Potential impact
on other comprehensive
income
---------- --------------
Credit spreads 0.3% -3.4% 5 740 (12 345)
---------- ------------
Other securitised 101 851 Potential impact
assets on income statement
---------- --------------
Cash flow adjustments CPR 6.1% 1 344 (1 247)
---------- ------------
Non-current assets Potential impact
classified as held on income statement
for sale 23 373
---------- --------------
Discount rates 13%-15% 657 (780)
Total level 3 assets 2 495 544 150 274 (211 849)
-------------------------- --------- ------------------------ ------------- ---------- ------------
Liabilities
Derivative financial Potential impact
instruments 46 911 on income statement (3 400) 3 436
---------- ------------
Volatilities 5.3% -20.5% (37) 73
Underlying asset
value^^ ^^ (3 363) 3 363
---------- ------------
Liabilities arising
on securitisation Potential impact
of other assets 104 215 on income statement
Cash flow adjustments CPR 6.1% (131) 225
Potential impact
Other liabilities 46 338 on income statement
Property values # (5 462) 5 462
Total level 3 liabilities 197 464 (8 993) 9 123
Net level 3 assets 2 298 080
-------------------------- --------- ------------------------ ------------- ---------- --------------
* The sensitivity of the fair value of liabilities arising on
securitisation of other assets has been considered together with
other securitised assets.
^ Other - The valuation sensitivity has been assessed by
adjusting various inputs such as expected cash flows, discount
rates, earnings multiples rather than a single input. It is deemed
appropriate to reflect the outcome on a portfolio basis for the
purposes of this analysis as the sensitivity of the assets cannot
be determined through the adjustment of a single input.
^^ Underlying asset values are calculated by reference to a
tangible asset, for example property, aircraft or shares.
The EBITDA, cash flows and property values have been stressed on
an investment-by-investment and loan-by-loan basis in order to
obtain favourable and unfavourable valuations.
# Property values are the underlying input for the valuations
where the capitalisation rate when valuing these properties has
been stressed by 0.25bps.
In determining the value of level 3 financial instruments, the
following are the principal input that can require judgement:
Credit spreads
Credit spreads reflect the additional yield that a market
participant would demand for taking exposure to the credit risk of
an instrument. The credit spread for an instrument forms part of
the yield used in a discounted cash flow calculation. In general a
significant increase in a credit spread in isolation will result in
a movement in fair value that is unfavourable for the holder of a
financial instrument.
Discount rates
Discount rates (including WACC) are used to adjust for the time
value of money when using a discounted cash flow valuation method.
Where relevant, the discount rate also accounts for illiquidity,
market conditions and uncertainty of future cash flows.
Volatilities
Volatility is a key input in the valuation of derivative
products containing optionality. Volatility is a measure of the
variability or uncertainty in returns for a given derivative
underlying. It represents an estimate of how much a particular
underlying instrument, parameter or index will change in value over
time.
Cash flows
Cash flows relate to the future cash flows which can be expected
from the instrument and requires judgement.
EBITDA
The company's earnings before interest, taxes, depreciation and
amortisation. This is the main input into a price earnings multiple
valuation method.
Price-earnings multiple
The price earnings ratio is an equity valuation multiple. It is
a key driver in the valuation of unlisted investments.
Property value and precious and industrial metals
The property value and precious and industrial metals is a key
driver of future cash flows on these investments.
Underlying asset value
In instances where cash flows have links to referenced assets,
the underlying asset value is used to determine the fair value. The
underlying asset valuation is derived using observable market
prices sourced from broker quotes, specialist valuers or other
reliable pricing sources
Fair value of financial assets and liabilities at amortised
cost
At 30 September 2021
Balances
where fair Fair value
values of balances
Fair value do not that do
approximates approximate not approximate
Carrying carrying carrying carrying
GBP'000 amount amount amounts amounts
----------------------------------------
Assets
Cash and balances at central banks 3 957 654 3 957 654 - -
Loans and advances to banks 2 602 105 2 596 469 5 636 5 349
Non-sovereign and non-bank cash
placements 464 128 464 128 - -
Reverse repurchase agreements and
cash collateral on securities borrowed 2 990 806 1 155 867 1 834 939 1 836 036
Sovereign debt securities 587 895 4 297 583 598 589 101
Bank debt securities 588 162 54 779 533 383 546 062
Other debt securities 591 870 160 542 431 328 434 595
25 563 12 968 12 595 12 571
Loans and advances to customers 415 122 293 064
Own originated loans and advances
to customers securitised 372 602 372 602 - -
Other loans and advances 109 006 61 954 47 052 46 845
Other securitised assets 31 839 31 839 - -
Other assets 991 181 991 011 170 165
38 850 22 819 16 031 16 029
663 264 399 217
Liabilities
Deposits by banks 2 294 873 283 588 2 011 285 2 042 693
Repurchase agreements and cash
collateral on securities lent 1 129 344 384 937 744 407 744 730
34 994 16 954 18 039 18 110
Customer accounts (deposits) 515 659 856 720
Debt securities in issue 1 881 647 291 594 1 590 053 1 617 229
Liabilities arising on securitisation
of own originated loans and advances 155 200 155 200 - -
Other liabilities 1 249 058 1 245 124 3 934 2 999
Subordinated liabilities 1 100 013 78 132 1 021 881 1 145 770
42 804 19 393 23 411 23 664
650 234 416 141
---------------------------------------- --------- ------------- ------------ ----------------
This note has been restated to separately present those items
where fair value approximates the carrying value.
Investec plc
Incorporated in England and Wales
Registration number: 3633621
LSE ordinary share code: INVP
JSE share code: INP
ISIN: GB00B17BBQ50
LEI: 2138007Z3U5GWDN3MY22
Ordinary share dividend announcement
Shareholders are referred to the company's unaudited combined
consolidated financial results for the year ended 31 March 2021 and
the accompanying dividend announcements released on SENS on 20 May
2021 and are advised that the dividend number stated in the
announcement was incorrectly disclosed as dividend number 38 and
should have referred to dividend number 37.
In terms of the DLC structure, Investec plc shareholders
registered on the United Kingdom share register may receive all or
part of their dividend entitlements through dividends declared and
paid by Investec plc on their ordinary shares and/or through
dividends declared and paid on the SA DAN share issued by Investec
Limited.
Investec plc shareholders registered on the South African branch
register may receive all or part of their dividend entitlements
through dividends declared and paid by
Investec plc on their ordinary shares and/or through
dividends declared and paid on the SA DAS share issued
by Investec Limited.
Declaration of dividend number 38
Notice is hereby given that a final dividend number 38, being a
gross dividend of 11.00000 pence (2020: 5.50000 pence) per ordinary
share has been declared by the Board from income reserves in
respect of the six months ended 30 September 2021 payable to
shareholders recorded in the shareholders' register of the company
at the close of business on Friday,
10 December 2021.
-- For Investec plc shareholders, registered on the United
Kingdom share register, through a dividend payment by Investec plc
from income reserves of 11.00000 pence per ordinary share
-- For Investec plc shareholders, registered on the South
African branch register, through a dividend payment by
Investec plc of 1.00000 pence per ordinary share and through a
dividend paid by Investec Limited, on the SA DAS share, payable
from income reserves, equivalent to 10.00000 pence per ordinary
share.
The relevant dates relating to the payment of dividend number 38
are as follows:
--------------------------------------------------------------------
Last day to trade Tuesday, 7 December
cum-dividend 2021
On the Johannesburg
Stock Exchange
(JSE)
On the London Wednesday, 8 December
Stock Exchange 2021
(LSE)
Shares commence Wednesday, 8 December
trading ex-dividend 2021
On the Johannesburg
Stock Exchange
On the London Thursday, 9 December
Stock Exchange 2021
Record date (on Friday, 10 December
the JSE and LSE) 2021
Payment date Wednesday, 22
(on the JSE and December 2021
LSE)
Share certificates on the South African branch register may not
be dematerialised or rematerialised between Wednesday, 8 December
2021 and Friday, 10 December 2021, both dates inclusive, nor may
transfers between the United Kingdom share register and the South
African branch register take place between Wednesday, 8 December
2021 and Friday, 10 December 2021, both dates inclusive.
--------------------------------------------------------------------
Additional information for South African resident shareholders
of Investec plc
-- Shareholders registered on the South African branch register
are advised that the distribution of 11.00000 pence, equivalent to
a gross dividend of 230.00000 cents per share, has been arrived at
using the Rand/Pound Sterling average buy/sell forward rate, as
determined at 11h00 (SA time) on Wednesday, 17 November 2021
-- Investec plc United Kingdom tax reference number: 2683967322360
-- The issued ordinary share capital of Investec plc is 696 082 618 ordinary shares
-- The dividend paid by Investec plc to South African resident
shareholders registered on the South African branch register and
the dividend paid by Investec Limited to Investec plc shareholders
on the SA DAS share are subject to South African Dividend Tax
(Dividend Tax) of 20% (subject to any available exemptions as
legislated)
-- Shareholders registered on the South African branch register
who are exempt from paying the Dividend Tax will receive a net
dividend of 230.00000 cents per share on the SA DAS share,
comprising 209.09091 cents per share paid by Investec Limited on
the SA DAS share and 20.90909 cents per ordinary share paid by
Investec plc.
-- Shareholders registered on the South African branch register
who are not exempt from paying the Dividend Tax will receive a net
dividend of 184.00000 cents per share (gross dividend of 230.00000
cents per share less Dividend Tax of 46.00000 cents per share)
comprising 167.27273 cents per share paid by Investec Limited on
the SA DAS share and 16.72727 cents per ordinary share paid by
Investec plc.
By order of the board
David Miller
Company Secretary
17 November 2021
Investec Limited
Incorporated in the Republic of South Africa
Registration number: 1925/002833/06
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
Ordinary share dividend announcement
Declaration of dividend number 131
Notice is hereby given that interim dividend number 131, being a
gross dividend of 230.00000 cents (2020: 112.00000 cents) per
ordinary share has been declared by the board from income reserves
in respect of the six months ended 30 September 2021 payable to
shareholders recorded in the shareholders' register of the company
at the close of business on Friday, 10 December 2021.
The relevant dates relating to
the payment of dividend number
131 are as follows:
--------------------------------------
Last day to trade cum-dividend
Tuesday, 7 December 2021
Shares commence trading ex-dividend
Wednesday, 8 December 2021
Record date
Friday, 10 December 2021
Payment date
Wednesday, 22 December 2021
The interim gross dividend of
230.00000 cents per ordinary share
has been determined by converting
the Investec plc distribution
of 11.00000 pence per ordinary
share into Rands using the Rand/Pound
Sterling average buy/sell forward
rate at 11h00 (SA time) on Wednesday,
17 November 2021.
Share certificates may not be
dematerialised or rematerialised
between Wednesday, 8 December
2021 and Friday, 10 December 2021,
both dates inclusive.
--------------------------------------
Additional information to take note of
-- Investec Limited South African tax reference number: 9800/181/71/2
-- The issued ordinary share capital of Investec Limited is 318 904 709 ordinary shares
-- The dividend paid by Investec Limited is subject to South
African Dividend Tax (Dividend Tax) of 20% (subject to any
available exemptions as legislated)
-- Shareholders who are exempt from paying the Dividend Tax will
receive a net dividend of 230.00000 cents per ordinary share
-- Shareholders who are not exempt from paying the Dividend Tax
will receive a net dividend of 184.00000 cents per ordinary share
(gross dividend of 230.00000 cents per ordinary share less Dividend
Tax of 46.00000 cents per ordinary share).
By order of the board
Niki van Wyk
Company Secretary
17 November 2021
Investec plc
Incorporated in England and Wales
Registration number: 3633621
Share code: INPP
ISIN: GB00B19RX541
LEI: 2138007Z3U5GWDN3MY22
Preference share dividend announcement
Non-redeemable non-cumulative non-participating preference
shares ('preference shares')
Declaration of dividend number 31
Notice is hereby given that preference dividend number 31 has
been declared by the board from income reserves for the period 1
April 2021 to 30 September 2021 amounting to a gross preference
dividend of 5.51508 pence per preference 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, 03 December 2021.
For shares trading on the Johannesburg Stock Exchange (JSE), the
dividend of 5.51508 pence per preference share is equivalent to a
gross dividend of 115.02306 cents per share, which has been
determined using the Rand/Pound Sterling average buy/sell forward
rate as at 11h00 (SA time) on Wednesday, 17 November 2021.
The relevant dates relating to the payment of dividend number 31
are as follows:
-------------------------------------------------------------------------
Last day to trade cum-dividend
On the Johannesburg Stock Exchange (JSE)
Tuesday, 30 November 2021
On the International Stock Exchange (TISE)
Wednesday, 1 December 2021
Shares commence trading ex-dividend
On the Johannesburg Stock Exchange (JSE)
Wednesday, 1 December 2021
On the International Stock Exchange (TISE)
Thursday, 2 December 2021
Record date (on the JSE and TISE)
Friday, 3 December 2021
Payment date (on the JSE and TISE)
Monday, 13 December 2021
Share certificates may not be dematerialised or rematerialised between
Wednesday, 1 December 2021 and Friday, 3 December 2021, both dates
inclusive, nor may transfers between the United Kingdom share register
and the South African branch register take place between Wednesday,
1 December 2021 and Friday, 3 December 2021 both dates inclusive.
-------------------------------------------------------------------------
Additional information for South African resident shareholders
of Investec plc
-- Investec plc United Kingdom tax reference number: 2683967322360
-- The issued preference share capital of Investec plc is 2 754 587 preference shares
-- The dividend paid by Investec plc to shareholders recorded on
the South African branch register is subject to South African
Dividend Tax (Dividend Tax) of 20% (subject to any available
exemptions as legislated)
-- The net dividend amounts to 92.01845 cents per preference
share for preference shareholders liable to pay the Dividend Tax
and 115.02306 cents per preference share for preference
shareholders exempt from paying the Dividend Tax.
By order of the board
David Miller
Company Secretary
17 November 2021
Investec plc
Incorporated in England and Wales
Registration number: 3633621
JSE share code: INPPR
ISIN: GB00B4B0Q974
LEI: 2138007Z3U5GWDN3MY22
Rand-denominated preference share dividend announcement
Rand-denominated non-redeemable non-cumulative
non-participating perpetual preference shares
('preference shares')
Declaration of dividend number 21
Notice is hereby given that preference dividend number 21 has
been declared by the board from income reserves for the period 1
April 2021 to 30 September 2021 amounting to a gross preference
dividend of 333.41097 cents per preference share payable to holders
of the Rand-denominated non-redeemable non-cumulative
non-participating perpetual preference shares as recorded in the
books of the company at the close of business on Friday, 10
December 2021.
The relevant dates relating to the payment of dividend number 21
are as follows:
-----------------------------------------------------------------
Last day to trade cum-dividend
Tuesday, 7 December 2021
Shares commence trading ex-dividend
Wednesday, 8 December 2021
Record date
Friday, 10 December 2021
Payment date
Monday, 13 December 2021
Share certificates may not be dematerialised or rematerialised
between Wednesday, 8 December 2021 and Friday, 10 December 2021,
both dates inclusive.
-----------------------------------------------------------------
Additional information for South African resident shareholders
of Investec plc
-- Investec plc United Kingdom tax reference number: 2683967322360
-- The issued Rand-denominated preference share capital of
Investec plc is 131 447 preference shares
-- The dividend paid by Investec plc to shareholders recorded on
the South African branch register is subject to South African
Dividend Tax (Dividend Tax) of 20% (subject to any available
exemptions as legislated)
-- The net dividend amounts to 266.72878 cents per preference
share for preference shareholders liable to pay the Dividend Tax
and 333.41097 cents per preference share for preference
shareholders exempt from paying the Dividend Tax.
By order of the board
David Miller
Company Secretary
17 November 2021
Investec Limited
Incorporated in the Republic of South Africa
Registration number: 1925/002833/06
JSE share code: INPR
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000063814
LEI: 213800CU7SM6O4UWOZ70
Preference share dividend announcement
Non-redeemable non-cumulative non-participating preference
shares ('preference shares')
Declaration of dividend number 34
Notice is hereby given that preference dividend number 34 has
been declared by the board from income reserves for the period 1
April 2021 to 30 September 2021 amounting to a gross preference
dividend of 272.94074 cents per preference 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, 10 December 2021.
The relevant dates for the payment of dividend number 34 are as
follows:
-----------------------------------------------------------------
Last day to trade cum-dividend
Tuesday, 7 December 2021
Shares commence trading ex-dividend
Wednesday, 8 December 2021
Record date
Friday, 10 December 2021
Payment date
Monday, 13 December 2021
Share certificates may not be dematerialised or rematerialised
between Wednesday, 8 December 2021 and Friday, 10 December 2021,
both dates inclusive.
-----------------------------------------------------------------
Additional information to take note of
-- Investec Limited South African tax reference number: 9800/181/71/2
-- The issued preference share capital of Investec Limited is 30 756 461 preference shares
-- The dividend paid by Investec Limited is subject to South
African Dividend Tax (Dividend Tax) of 20% (subject to any
available exemptions as legislated)
-- The net dividend amounts to 218.35259 cents per preference
share for shareholders liable to pay the Dividend Tax and 272.94074
cents per preference share for preference shareholders exempt from
paying the Dividend Tax.
By order of the board
Niki van Wyk
Company Secretary
17 November 2021
Investec plc
Incorporated in England and Wales
(Registration number 3633621)
JSE ordinary share code: INP
LSE ordinary share code: INVP
ISIN: GB00B17BBQ50
LEI: 2138007Z3U5GWDN3MY22
Registered office:
30 Gresham Street, London
EC2V 7QP, United Kingdom
Registrars in the United Kingdom:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol
BS99 6ZZ, United Kingdom
Company Secretary:
David Miller
Investec Limited
Incorporated in the Republic of South Africa
(Registration number 1925/002833/06)
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
Registered office:
100 Grayston Drive
Sandown, Sandton
2196 South Africa
Transfer secretaries in South Africa:
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank
2196 South Africa
Company Secretary:
Niki van Wyk
Directors:
Philip Hourquebie(1) (Chair)
Fani Titi(2) (Chief Executive)
Nishlan Samujh(2) (Finance Director)
Richard Wainwright(2*) (executive director)
Ciaran Whelan(3) (executive director)
Henrietta Baldock(1)
Zarina Bassa(2) (Senior Independent Director)
David Friedland(2)
Stephen Koseff(2)
Nicky Newton-King(2*)
Jasandra Nyker(2*)
Khumo Shuenyane(2)
Philisiwe Sibiya(2)
Brian Stevenson(1^)
1 British
2 South African
3 Irish
* Appointed 21 May 2021
^ Appointed 22 June 2021
Charles Jacobs resigned 30 June 2021
Perry Crosthwaite and Lord Malloch-Brown resigned 5 August
2021
Sponsor:
Investec Bank Limited
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END
IR DKOBBOBDDCDD
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