Interim Management Statement

RNS Number : 5115I

Investec PLC

26 July 2012

 



Investec Limited Incorporated in the Republic of South Africa Registration number 1925/002833/06 JSE share code: INL ISIN: ZAE000081949

Investec plc Incorporated in England and Wales Registration number 3633621 JSE share code: INP ISIN: GB00B17BBQ50

Investec (comprising Investec plc and Investec Limited) - Interim Management Statement released on 26 July 2012

This Interim Management Statement is issued by Investec in accordance with the UK Listing Authority's Disclosure and Transparency Rules. Unless stated otherwise, key trends and figures highlighted below refer to the three months ended 30 June 2012 and the corresponding period in the previous year.

Salient features of the three month period to 30 June 2012 compared to the three month period to 30 June 2011:

·      Operating profit before goodwill, acquired intangibles, non-operating items and taxation and after non-controlling interests is in line with the prior year.

·      The group's South African operations have performed strongly in home currency. Sterling results have been negatively impacted by the 17% depreciation of the average Rand: Sterling exchange rate from 11.02 in the prior period to 12.85 in the current period.

·      The operating results referred to above have been affected by the ongoing weakness in the macro-economic environment.

·      The credit loss charge as a percentage of average gross loans and advances annualised for the period amounted to 0.61% (31 March 2012: 1.12%).

·      Recurring income as a percentage of total operating income amounted to approximately 72% (2011: 71%), supported by higher average funds under management.

·      As at 30 June 2012 the capital adequacy ratio of Investec plc (applying UK Financial Services Authority rules to its capital base) was 16.9% and the capital adequacy ratio of Investec Limited (applying South African Reserve Bank rules to its capital base) was 15.8%.

·      The group had approximately GBP9.0 billion of cash and near cash available to support its activities. 

·      Since 31 March 2012 (the end of the group's financial year):

o  Third party assets under management were flat at GBP96.6 billion - an increase of 2.0% on a currency neutral basis. The group recorded net inflows of GBP1.6 billion.

o  Customer accounts (deposits) decreased 2.7% to GBP24.7 billion - flat on a currency neutral basis.

o  Core loans and advances remained flat at GBP18.2 billion - an increase of 2.5% on a currency neutral basis.

·      Loans and advances as a percentage of customer deposits were 69.9% (31 March 2012:67.8%).

The group will be holding a pre-close briefing on 13 September 2012.

On behalf of the board

Fani Titi (Joint Chairman), Sir David Prosser (Joint Chairman), Stephen Koseff (Chief Executive Officer) and Bernard Kantor (Managing Director)

Notes:

1.   The financial information on which this statement is based has not been reviewed and reported on by the group's auditors.

2.   Please note that matters highlighted above may contain forward looking statements which are subject to various risks and uncertainties and other factors, including, but not limited to:

-      the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS.

-      domestic and global economic and business conditions.

-      market related risks.

•       A number of these factors are beyond the group's control.

•       These factors may cause the group's actual future results, performance or achievements in the markets in which it operates to differ from those expressed or implied.

•       Any forward looking statements made are based on the knowledge of the group at 26 July 2012.

3.   The group's reporting currency is Pounds Sterling. Certain of the group's operations are conducted by entities outside the UK. The results of operations and the financial condition of the group's individual companies are reported in the local currencies in which they are domiciled, including Rands, Australian Dollars, Euros and Dollars. These results are then translated into Pounds Sterling at the applicable foreign currency exchange rates for inclusion in our combined consolidated financial statements. In the case of the income statement, the weighted average rate for the relevant period is applied and, in the case of the balance sheet, the relevant closing rate is used. The following table sets out the movements in certain relevant exchange rates against Pounds Sterling over the period:

	Three months to		Year to		Three months to
	30-Jun-12		31-Mar-12		30-Jun-11
Currency	Period end	Average	Period end	Average	Period end	Average
per GBP1.00
South African Rand	12.88	12.85	12.27	11.85	10.85	11.02
Australian Dollar	1.53	1.56	1.54	1.52	1.50	1.53
Euro	1.24	1.23	1.2	1.16	1.11	1.13
US Dollar	1.57	1.58	1.60	1.60	1.61	1.64

4.   The following disclosures are made with respect to Basel quarterly disclosure requirements:

The group holds capital in excess of regulatory requirements targeting a minimum tier one capital ratio range of 11% to 12% and a total capital adequacy ratio range of 15% to 18% on a consolidated basis for each of Investec plc and Investec Limited. As per the table below, all regulated entities met these targets at the reporting date.  

Basel 2.5	Investec plc^	IBP*^	IBAL*	Investec Limited^	IBL*
As at 30 Jun 2012	GBP 'mn	GBP 'mn	A$'mn	ZAR 'mn	ZAR 'mn
Primary capital (Tier 1)	1,517	1,315	584	23,456	21,542
Other capital (Tier 2)	776	622	93	8,716	8,716
	2,293	1,937	677	32,172	30,258
Less: deductions	-36	-26	-153	-374	-374
Net qualifying capital	2,257	1,911	524	31,798	29,884
Risk-weighted assets (banking and trading)	13,347	11,982	3,163	201,468	182,887
Capital requirements	1,068	959	411	19,139	18,325
Credit risk	809	745	350	13,867	13,703
Securitisation exposures	17	17	-	410	410
Equity risk	39	39	7	2,615	2,564
Market risk	65	61	4	445	404
Operational risk	138	97	50	1,802	1,244
Capital adequacy ratio	16.9%	15.9%	16.5%	15.8%	15.5%
Tier 1 ratio	11.4%	11.0%	13.8%	11.5%	11.1%

*IBP is Investec Bank plc; IBAL is Investec Bank (Australia) Limited and IBL is Investec Bank Limited. ^Investec plc includes IBP. IBP includes IBAL. Investec Limited includes IBL.

Timetable:

Pre-close briefing: 13 September 2012

Interim period: 30 September 2012

Release of interim results: 20 November 2012

For further information please contact:

Investec Investor Relations                                                                     

UK: [phone]                                                          

South Africa: [phone]

[e-mail]

 

About Investec

Investec is an international specialist bank and asset manager that provides a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia as well as certain other countries. The group was established in 1974 and currently has approximately 7 800 employees.

Investec focuses on delivering distinctive profitable solutions for its clients in three core areas of activity namely, Asset Management, Wealth & Investment and Specialist Banking.

In July 2002 the Investec group implemented a dual listed company structure with listings on the London and Johannesburg Stock Exchanges. The combined group's current market capitalisation is approximately GBP3.5 billion.

26 July 2012

 

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