Wrap Text
INLP - Investec Bank Limited - Reviewed interim condensed consolidated financial
results for the six months to 30 September 2011
Investec Bank Limited
(Registration number 1969/004763/06)
Share Code: INLP ISIN: ZAE000048393
Reviewed interim condensed consolidated financial results
for the six months to 30 September 2011
Consolidated income statement
Reviewed Reviewed Audited
Six months to Six months to Year to
30 September 30 September 31 March
R`million 2011 2010 2011
Interest income 8 003 7 878 14 932
Interest expense (5 759) (5 953) (11 062)
Net interest income 2 244 1 925 3 870
Fee and commission income 639 374 948
Fee and commission expense (14) (47) (39)
Principal transactions 316 729 1 670
Operating loss from - (17) (17)
associates
Other operating income - - 15
Other income 941 1 039 2 577
Total operating income before 3 185 2 964 6 447
impairment losses on loans
and advances
Impairment losses on loans (357) (373) (852)
and advances
Operating income 2 828 2 591 5 595
Operating costs (1 667) (1 504) (3 181)
Profit before taxation 1 161 1 087 2 414
Taxation (157) (192) (132)
Profit after taxation 1 004 895 2 282
Loss attributable to non- - - 4
controlling interests
Earnings attributable to 1 004 895 2 286
shareholders
Headline earnings
Earnings attributable to 1 004 895 2 286
shareholders
Preference dividends paid (53) (61) (120)
Earnings attributable to 951 834 2 166
ordinary shareholders
Headline adjustments, net of - 25 25
taxation
Impairment of associate - 25 25
Headline earnings 951 859 2 191
attributable to ordinary
shareholders
Condensed consolidated statement of total comprehensive income
Reviewed Reviewed Audited
Six months to Six months to Year to
30 September 30 September 31 March
R`million 2011 2010 2011
Profit after taxation 1 004 895 2 282
Other comprehensive income:
Cash flow hedge movements (335) (4) 82
taken directly to other
comprehensive income*
Fair value movements on (18) - 23
available-for-sale assets
taken directly to other
comprehensive income*
Foreign currency adjustments 341 (85) (128)
on translating foreign
operations
Total comprehensive income 992 806 2 259
Total comprehensive loss - - (4)
attributable to non-
controlling interests
Total comprehensive income 992 806 2 263
attributable to ordinary
shareholders
Total comprehensive income 992 806 2 259
*Net of taxation of (R137 million) (Six months to 30 September 2010: (R1
million), Year to 31 March 2011: R41 million).
Consolidated balance sheet
Reviewed Audited Restated
30 September 31 March 30 September
R`million 2011 2011 2010**
Assets
Cash and balances at central 6 932 6 813 3 770
banks
Loans and advances to banks 12 641 4 918 9 514
Cash equivalent advances to 5 025 5 829 5 805
customers
Reverse repurchase agreements 5 501 8 157 3 761
and cash collateral on
securities borrowed
Trading securities 50 691 44 352 47 948
Derivative financial 18 917 11 487 11 279
instruments
Investment securities 22 622 14 214 7 339
Loans and advances to 118 723 115 223 113 719
customers
Securitised assets 3 473 2 176 3 287
Interest in associated 89 135 128
undertakings
Deferred taxation assets 40 42 21
Other assets 1 362 981 808
Property and equipment 287 286 170
Investment properties 5 5 5
Intangible assets 110 108 100
Loans to group companies 5 255 6 836 5 500
251 673 221 562 213 154
Liabilities
Deposits by banks 9 399 10 956 11 845
Derivative financial 18 224 10 495 10 383
instruments
Other trading liabilities 398 389 303
Repurchase agreements and 15 635 10 733 6 202
cash collateral on securities
lent
Customer accounts (deposits) 172 079 154 772 151 222
Debt securities in issue 1 827 2 489 2 729
Liabilities arising on 3 628 2 174 2 336
securitisation
Current taxation liabilities 1 074 1 024 787
Deferred taxation liabilities 437 349 654
Other liabilities 2 061 2 478 2 092
224 762 195 859 188 553
Subordinated liabilities 6 866 6 866 6 866
231 628 202 725 195 419
Equity
Ordinary share capital 28 27 26
Share premium 12 793 11 845 11 645
Other reserves (83) (100) (152)
Retained income 7 307 7 065 6 212
Shareholders` equity 20 045 18 837 17 731
excluding non-controlling
interests
Non-controlling interests - - 4
Total equity 20 045 18 837 17 735
Total liabilities and equity 251 673 221 562 213 154
** As restated for reclassifications detailed in the commentary section of this
report.
Condensed consolidated statement of changes in equity
Reviewed Audited Reviewed
Six months to Year to Six months to
30 September 31 March 30 September
R`million 2011 2011 2010
Balance at the beginning of 18 837 16 454 16 454
the period
Total comprehensive income 992 2 259 806
for the period
Issue of ordinary shares 949 1 300 1 099
Issue of perpetual preference - 17 17
shares
Dividends paid to ordinary (680) (1 073) (580)
shareholders
Dividends paid to perpetual (53) (120) (61)
preference shareholders
Balance at the end of the 20 045 18 837 17 735
period
Condensed consolidated cash flow statement
Reviewed Audited Reviewed
Six months to Year to Six months to
30 September 31 March 30 September
R`million 2011 2011 2010
Net cash inflow from 1 395 2 492 553
operating activities
Net cash outflow from (4) (226) (59)
investing activities
Net cash inflow from 216 1 649 2 000
financing activities
Effects of exchange rate 213 (21) (32)
changes on cash and cash
equivalents
Net increase in cash and cash 1 820 3 894 2 462
equivalents
Cash and cash equivalents at 14 468 10 574 10 574
the beginning of the period
Cash and cash equivalents at 16 288 14 468 13 036
the end of the period
Cash and cash equivalents are defined as including: cash and balances at central
banks, on demand loans and advances to banks and cash equivalent advances to
customers (all of which have a maturity profile of less than three months).
Condensed consolidated segmental information for the six months to 30 September
2011
Reviewed Group Services
Private Investment Capital and Other
R`million Banking Banking Markets Activities Total
Operating income 894 213 1 220 501 2 828
Operating (714) (94) (593) (266) (1 667)
expenses
Profit before 180 119 627 235 1 161
taxation
Cost to income 55.6 47.7 45.2 68.2 52.3
ratio (%)
Condensed consolidated segmental information for the six months to 30 September
2010
Reviewed Group Services
Private Investment Capital and Other
R`million Banking Banking Markets Activities Total
Operating income 854 519 944 274 2 591
Operating (688) (98) (508) (210) (1 504)
expenses
Profit before 166 421 436 64 1 087
taxation
Cost to income 59.0 19.0 53.5 63.3 50.7
ratio (%)
These reviewed interim condensed consolidated financial results are published to
provide information to holders of Investec Bank Limited`s listed non-redeemable,
non-cumulative, non-participating preference shares.
Commentary
Overview of results
Investec Bank Limited, a subsidiary of Investec Limited, posted an increase in
headline earnings attributable to ordinary shareholders of 10.7% toR951 million
(2010: R859 million).
The balance sheet remains strong with a capital adequacy ratio of 15.7% (31
March 2011: 15.6%).
For full information on the Investec group results, refer to the combined
results of Investec plc and Investec Limited on the group`s website
http://www.investec.com
Business unit review
Unless the context indicates otherwise, all comparatives referred to in the
business unit review relate to the six months ended 30 September 2010. Operating
profit is before taxation and headline adjustments.
Salient operational features of the year under review include:
- Private Banking operating profit increased by 8.4% to R180 million (2010: R166
million) supported by growth in the loan portfolio and improved margins. Since
31 March 2011 the private client core lending book grew by 6.6% from R83.0
billion to R88.4 billion and the deposit book grew by 6.9% from R56.1 billion to
R59.9 billion.
- Investment Banking operating profit declined by 71.7% to R119 million (2010:
R421 million). Weaker economic and trading conditions have negatively impacted
the timing of realisations, dividends received and the performance of the listed
principal investment portfolio. The Corporate Finance division has performed
well posting a strong increase in net fees and commissions earned.
- Capital Markets operating profit increased by 43.8% to R627 million (2010:
R436 million) benefiting from a strong deal pipeline and improved margins. The
bank continued to hold significant surplus liquidity and remains a net provider
of liquidity to the South African interbank market.
- Group Services and Other Activities operating profit increased significantly
from R64 million to R235 million largely as a result of an improved performance
from investments held within the Central Funding portfolio and a reduced
required central provision.
Accounting policies and disclosures
These reviewed interim condensed consolidated financial results have been
prepared in terms of the recognition and measurement criteria of International
Financial Reporting Standards, and the presentation and disclosure requirements
of IAS 34, Interim Financial Reporting, the AC500 Standards as issued by the
Accounting Practices Board and the Companies Act 71 of 2008 which came into
effect on 1 May 2011.
The accounting policies applied in the preparation of the results for the period
ended 30 September 2011 are consistent with those adopted in the financial
statements for the year ended 31 March 2011. The financial results have been
prepared under the supervision of Glynn Burger, the Group Risk and Finance
Director.
Restatements and presentation of information
Redeemable preference shares
At 31 March 2011 the group disclosed a restatement to the balance sheet to
present redeemable preference share liabilities as a component of debt
securities in issue rather than other liabilities. The impact of this
presentational amendment to 30 September 2010 and 30 September 2009 is noted
below:
Changes to
30 September 2010 As previously previously
R`million Restated reported reported
Debt securities in issue 2 729 1 574 1 155
Other liabilities 2 092 3 247 (1 155)
Changes to
30 September 2009 As previously previously
R`million Restated reported reported
Debt securities in issue 2 326 1 122 1 204
Other liabilities 2 526 3 730 (1 204)
The above changes have no impact to the income statement, balance sheet (other
than as noted above) or cash flow statement.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
16 November 2011
Review conclusion
KPMG Inc. and Ernst & Young Inc., the Group`s independent auditors, have
reviewed the interim condensed consolidated financial results and have expressed
an unmodified review conclusion on the interim condensed consolidated financial
results, which is available for inspection at the company`s registered office.
Investec Bank Limited
Dividend announcement
Registration number: 1969/004763/06
Share code: INLP
ISIN: ZAE000048393
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 17
Notice is hereby given that preference dividend number 17 has been declared for
the period 01 April 2011 to 30 September 2011 amounting to 338.42 cents per
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, 02 December 2011.
The relevant dates for the payment of dividend number 17 are as follows:
Last day to trade cum-dividend Friday, 25 November 2011
Shares commence trading ex-dividend Monday, 28 November 2011
Record date Friday, 02 December 2011
Payment date Tuesday, 13 December 2011
Share certificates may not be dematerialised or rematerialised between Monday,
28 November 2011 and Friday, 02 December 2011, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
16 November 2011
Registered office
100 Grayston Drive
Sandown, Sandton 2196
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg 2001
Directors:
F Titi (Chairman)
D M Lawrence* (Deputy Chairman)
S Koseff* (Chief Executive)
B Kantor* (Managing Director)
S E Abrahams
G R Burger*
M P Malungani
Sir D J Prosser+
K X T Socikwa
B Tapnack*
P R S Thomas
C B Tshili.
*Executive
+British
Company Secretary:
B Coetsee
www.investec.com
Date: 17/11/2011 09:02:46 Supplied by www.sharenet.co.za
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