Investec plc – Debt Investor Presentation July 2017 The information in this presentation relates to the year ending 31 Mar 2017, unless otherwise indicated. All information relates to Investec plc unless otherwise indicated.
Contents 1. An overview of Investec plc 2. Investec plc’s investment proposition and operating fundamentals 3. Funding profile 4. Appendix 2
An overview of Investec plc
Investec plc: overview Investec plc key facts % contribution to operating profit* • Investec plc operates as a specialist bank and asset manager, principally in the UK 25% 40% • We have a number of other distribution and origination Mar channels which support our underlying core businesses for 2017 example in Australia, Channel Islands, Hong Kong, India, Ireland, Singapore, Switzerland, Taiwan and the USA 35% • Total assets of £18.8bn; total shareholders’ equity of £2.0bn; total third party funds under management (FUM) Asset Management Wealth & Investment Specialist Banking of £97.3bn • Total loans £8.6bn; total deposits £11.0bn Funds under management • Leading private client wealth manager in the UK (top 3 by £’bn FUM): FUM £35.6bn 120 • Global specialist asset manager: £61.4bn in assets under 100 management in UK and Other business (£95.3bn globally) 80 • 60 Approximately 3,900 employees 40 • Regulated by the Prudential Regulation Authority and the 20 Financial Conduct Authority 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 • Follows the same strategic approach as the greater Investec group Asset Management Wealth & Investment Figures as at 31 March 2017. *Before goodwill, acquired intangibles, non-operating items and taxation and after other non-controlling interests. 4
Investec plc: balanced business model supporting our long-term strategy Three distinct business activities focused on well defined target clients Private client (high net worth / high income) / Corporate / Institutional / Government charities / trusts Specialist Banking Wealth & Investment Asset Management Specialist Banking Wealth & Investment (operating completely independently) Provides a broad range of services: Provides investment Provides investment Provides a broad range of services: Provides investment management services and • Lending management services management services and • Lending independent financial independent financial planning • Transactional banking • Transactional banking planning advice advice • Deposit raising activities • Treasury and trading • Treasury and trading • Advisory • Advisory • Investment activities • Investment activities Philosophy • Broadly defined we operate in two distinct spaces, specialist banking and asset management. • We live in a world where the market requires a high degree of transparency and the appropriate management of conflicts of interest. • Within Specialist Banking, we offer a broad range of services from lending, transactional banking, treasury and trading, advisory and investment activities. These services are aimed primarily at corporates, institutional and high net worth clients in our selected geographies. • We have created a global Wealth & Investment unit which provides investment management services and independent financial planning advice to private clients, charities and trusts. • Operating completely independently from these structures is Investec Asset Management. Its sole focus is the provision of investment management services to its predominantly global institutional client base. 5
Investec plc: simplified structure and main operating subsidiaries Features of Investec’s plc structure Baa1 Investec plc • Investec plc is authorised by the PRA and is regulated by the FCA Listed on LSE and the PRA on a consolidated basis. Non-SA operations • Two main operating subsidiaries: Investec Bank plc (which houses the Specialist Banking and Wealth & Investment activities) and Investec Asset Management 84%* A2 / BBB • Investec Asset The Investec group implemented a Dual Listed Companies Structure in Investec Bank July 2002 Management plc Ltd • Investec plc is the holding company of the majority of the Investec group’s non-Southern African operations Total assets: AuM: • Investec plc is a FTSE 250 company – current market cap of £18.4bn^ £61.4bn^ approximately £3.9bn Features of the Investec Group’s DLC structure • Investec operates as if it is a single unified economic enterprise with the Investec Investec Investec Investec Investec same Boards of Directors and management at the holding companies Holdings Bank Bank Irish Wealth & (Investec plc and Investec Limited) Australia (Switzerland) (Channel branch Investment AG Limited Islands) Limited • Ltd Creditors are however ring-fenced to either Investec Limited or Investec plc as there are no cross guarantees between the companies FuM: Assets under Management Mar-17 Mar-16 £35.6bn^ UK & Other • Capital and liquidity are prohibited from flowing between the two Investec Wealth & Investment £35.6bn £29.8bn entities under the DLC structure conditions Investec Asset Management £61.4bn £51.1bn Other £0.3bn £0.3bn • Shareholders have common economic and voting interests as if Investec Total third party assets under £97.3bn £81.2bn Limited and Investec plc were a single company (equivalent dividends on management a per share basis; joint electorate and class right voting) All shareholdings are 100% unless otherwise stated. Only main operating subsidiaries are indicated. *16% is held by senior management in the company. 6 ^FUM relating to Wealth & Investment, Assets under management (AUM) relating to Asset Management and Total assets relating to IBP all as at 31 Mar 2017.
Investec plc: we have realigned the business model • We have significantly realigned our business model over the past few years and focused on growing our capital light businesses • Our total capital light activities account for 63% of Investec plc’s income CAPITAL LIGHT ACTIVITIES CAPITAL INTENSIVE ACTIVITIES Third party asset management, advisory and transactional income Net interest, investment, associate and customer flow trading income • Asset management • Lending portfolios • Wealth management • Investment portfolios • Advisory services • Trading income largely from client flows as well as • Transactional banking services balance sheet management and other £1.3bn of revenue at • Funds 31 March 2017 CAPITAL LIGHT CAPITAL INTENSIVE £’mn Investec plc BUSINESSES BUSINESSES 900 800 £490mn £817mn 700 37% of total revenue 63% of total revenue 600 500 400 Net fees and commissions of Net interest income of 300 £804mn £289mn 200 62% of total revenue 22% of total revenue 100 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Investment and associate income of Other of £63mn £13mn 5% of total revenue Third party assets and advisory revenue (CAPITAL LIGHT) 1% of total revenue Net interest income, investment and trading income (CAPITAL INTENSIVE) Customer flow and other trading income of £138mn 10% of total revenue Net interest, investment, associate and Fee and commission income Types of income customer flow trading income 7
Investec plc: we have realigned the business model • We have significantly increased our third party assets under management - a key capital light annuity income driver - from the Asset Management and Wealth & Investment businesses • Strong cash flows from the wealth and asset management businesses support obligations at Investec plc holding company % contribution to operating profit* Funds under management £’bn 120 100 80 25% 24% 29% 36% 33% 40% 60 Mar Mar Mar 2017 2016 2015 40 35% 20 35% 43% 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Asset Management Wealth & Investment Specialist Banking Asset Management Wealth & Investment *Before goodwill, acquired intangibles, non-operating items and taxation and after other non-controlling interests. 8
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