UK Specialist Bank January 2020 Ruth Leas, Ryan Tholet, Chris Meyer - PowerPoint PPT Presentation

UK Specialist Bank January 2020 Ruth Leas, Ryan Tholet, Chris Meyer

Agenda 1 UK Specialist Bank: Leadership team and overview 3-4 2 UK Specialist Bank: Investment proposition 5-15 3 Private Banking: Additional detail 17-22 4 Corporate and Investment Banking: Additional detail 23-31 Page 2

UK Specialist Bank: Leadership team Ruth Leas CEO of Investec Bank plc, Head UK Specialist Bank Chris Meyer Executive Director of Investec Bank plc, Head UK Corporate and Investment Banking Ryan Tholet Executive Director of Investec Bank plc, Head UK Private Banking Page 3

UK Specialist Bank: Overview UK Specialist Bank contribution to the Group We are a full-service bank, working with 200,000+ clients, from individuals through to private companies, larger corporates and institutions, supported by c. 2,400 talented out of the ordinary people based in 12 different countries % Contribution to % Contribution to Employees adjusted operating profit* loan book UK UK of Investec Bank and Wealth of Investec Bank and Wealth Wealth & Specialist Investment Bank 27% 42% c.2,400 UK Specialist Bank Loan growth over time ^ £’ bn CAGR: 12% 12 SA SA Wealth & Specialist 10 Investment Bank 8 6 10.8 10.5 9.4 8.1 4 7.2 2 0 2016 2017 2018 2019 H1 2020 *Operating profit before goodwill, acquired intangibles and strategic actions, less profit attributable to other non-controlling interests. ^Loan growth shown above on an ongoing basis (excluding UK Specialist Bank legacy assets and businesses sold), Page 4 except for FY 2019 and H1 2020 which are on statutory basis.

UK Specialist Bank: Investment proposition Domestically relevant in the UK, internationally connected 1 Business uniquely positioned in the UK market 2 Established, full service Corporate and Investment Banking delivering strong growth Private Banking fully invested – now in leverage and growth phase 3 4 Diversified, quality revenue mix provides sustainable earnings 5 Current cost base sufficient to support the three year growth plan – growth with efficiency 6 Clear path to achieving ROE targets Page 5

Uniquely positioned in the UK market We are uniquely positioned in a segment of the market where we have strong competitive advantage with our full service offering UK Specialist Bank Investment Banking Corporate Banking Private Banking Retail Banking For UK listed corporates and financial sponsor- backed businesses looking For UK private companies For high net worth clients Award-winning, innovative for boutique service with who require agile, that need a banking-partner Savings products for mass ‘bulge bracket’ capability, as personalised service, tailored to grow their wealth affluent clients well as international to meet their needs specialist sector clients seeking deep expertise Lending, capital, savings, transactional banking, and Capital, advice and ideas, risk management and treasury foreign exchange solutions Diverse and high-quality revenue mix driven by our full service offering, fuelled by our ability to capitalise on under-serviced parts of the market across the spectrum Page 6

Established, full- service CIB offering… Consistently contributed c.35-40% of Global Specialist Bank revenues • Specialist sector clients • Private companies • 300 customers • 70,000 customers International Corporate • 35-40% of CIB revenues • 25% of CIB revenues specialist Banking franchises Investment Banking • Listed companies and sponsor-backed businesses • 300 customers • 35-40% of CIB revenues Page 7

Established, full- service Corporate and Investment Banking (CIB) offering… CIB focused on deepening well-established franchises and balancing fees and lending CIB Sustainable earnings CIB Loan book growth CIB Revenue mix £bn 7 100% 2% 3% 4% 8% 9% 9% 9% 9% 10% 12% 13% 13% 6.3 20% 20% 5.9 90% 6 21% 38% 23% 45% 31% 5.1 23% 80% 33% 33% 32% 5 32% 4.3 70% 4 3.7 61% 60% 60% 60% 98% 3.2 97% 3.0 91% 91% 55% 3 2.6 80% 80% 52% 50% 75% 68% 64% 62% 61% 2 58% 57% 55% 56% 55% 40% 40% 37% 34% 1 30% 0 20% Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Client revenue Proprietary and one-off revenue Lending Client flow Advisory Net book size Net book size as a % of total UK net core loans 97% of earnings made up of 14% CAGR Balanced and diversified, client revenue of the loan book since 2012 quality revenue mix Page 8

…now delivering on growth strategy Key CIB growth drivers 1 2 3 4 Building on the strength of our Converting our unique existing Corporate Banking Strengthening the reputation of Creating a differentiated Investment Banking proposition franchises, focused on high- our International Specialist Fund Management Platform , – a full-service UK Investment growth clients and deepening Franchises by being at the giving investors unique access to Bank with international reach and relationships with existing clients cutting edge of constantly our International Specialist a client-partnership model – into - currently 71% are single changing industries. Sector expertise. pre-eminence in the mid-market. product. • • • • Growing existing business by using Grow our listed clients at around Deliver a 10% CAGR in the next We currently have >£4.5bn third- existing origination channels and 12% per annum over the next five three years from Aviation, Power & party AUM driving multi-product sales years, through a smart build and buy Infrastructure Finance, Fund Finance • We have a clear ambition to develop plan and Resources revenues • Enhancing existing products and our fund management capability to • expanding into new product Grow our PE clients by around 15% support our other asset classes, and capabilities , including working over the next five years and continue in doing so significantly grow our capital, digital deposits and business to convert them to using multiple AUM current accounts solutions , growing our sponsor- • Why it matters to investors backed revenues by 12% per annum • Developing digital product suite , o Access to differentiated including online lending, current alternative strategies account, FX and payments o Leverage strong origination • team The recent £15mn BCR funding award is enabling us to accelerate o Superior risk return the build out of our proposition o Strong alignment of interest While leveraging our strong distribution capability to support our client growth Page 9

Private Banking fully invested – now in leverage and growth phase Private Banking in the UK - strong growth across all three client groups, which is a reflection that our proposition is resonating in the market High Net Worth client growth SA client growth Savings client growth clients earning £300k+ and with £3m NAV who are actively creating High Income Investec SA clients clients with £10k+ to deposit wealth 99,200 7000 14000 100000 6,500 12,500 6000 12000 80000 5000 10000 4,600 61,400 4,000 56,200 7,500 60000 4000 8000 6,900 3000 6000 40000 2000 4000 20000 1000 2000 0 0 Mar 17 Mar 18 Mar 19 Sep 19 Mar 22 Mar 17 Mar 18 Mar 19 Sep 19 Mar 22 0 (minimum (minimum Mar 17 Mar 18 Mar 19 Sep 19 Mar 22 target) target) (target) Market proposition: Market proposition: Market proposition: A different type of private banking. A seamless offshore banking solution Highly competitive and award winning Refreshingly human with a high service level integrated into One Investec through One innovative products, digitally focused and – an ability to deal with complexity and with the opportunity to ‘self serve’ flexibly Place execute quickly Notes: 1. Projected retail client numbers are based on current balance sheet make up of average balance per account, average number of accounts per client. This can change based on wider funding needs across the bank, and potential for more vanilla retail deposits raised across a higher number of clients in lower denominations 2. Client numbers rebased to reflect refined methodology Page 10

Private Banking fully invested – now in leverage and growth phase Private Banking in the UK currently leveraging new operating capabilities and driving sustainable growth UK Private Banking Loan Book growth Retail Funding from UK Private Banking £mn £mn 7,000 2.00% 10,000 1.8% 6,000 1.6% 1.6% 1.6% 8,000 1.6% 1.50% 5,000 6,000 4,000 1.00% 3,000 4,000 2,000 0.50% 2,000 1,000 0 0.00% 0 Mar 16 Mar 17 Mar 18 Mar 19 Sep 19 Mar 22 Mar 16 Mar 17 Mar 18 Mar 19 Sep 19 Mar 22 (Target) (Target) Lending Collateralised by Property HNW & Other Private Client Mortgages UK Private Banking Deposits Corporate & Other Lending Net Loan Interest Margin Grown, diversified and reduced the risk of our loan book Scalable retail funding that we can grow efficiently while maintaining net interest margin Page 11