To view the PDF file, sign up for a MySharenet subscription.

INLP - Investec Bank Limited - Reviewed preliminary condensed consolidated

Release Date: 17/05/2012 08:00
Code(s): JSE INLP
Wrap Text

INLP - Investec Bank Limited - Reviewed preliminary condensed consolidated financial results for the year ended 31 March 2012 Investec Bank Limited (Registration number 1969/004763/06) Share code: INLP ISIN: ZAE000048393 Reviewed preliminary condensed consolidated financial results for the year ended 31 March 2012 Consolidated income statement Year to 31 March Reviewed Restated* R`million 2012 2011 Interest income 15 850 14 932 Interest expense (11 581) (11 062) Net interest income 4 269 3 870 Fee and commission income 1 146 948 Fee and commission expense (91) (39) Investment income 589 1 208 Trading income - Arising from customer flow 259 209 - Arising from balance sheet management and other 175 253 trading activities Other operating income/(loss) 10 (2) Total operating income before impairment losses 6 357 6 447 on loans and advances Impairment losses on loans and advances (833) (852) Operating income 5 524 5 595 Operating costs (3 351) (3 181) Profit before taxation 2 173 2 414 Taxation (215) (132) Profit after taxation 1 958 2 282 Loss attributable to non-controlling interests - 4 Earnings attributable to shareholders 1 958 2 286 Headline earnings Earnings attributable to shareholders 1 958 2 286 Preference dividends paid (104) (120) Earnings attributable to ordinary shareholders 1 854 2 166 Headline adjustments, net of taxation (42) 25 Gain on realisation of available-for-sale (42) - financial assets Impairment of associate - 25 Headline earnings attributable to ordinary 1 812 2 191 shareholders * As restated for reclassifications detailed in the commentary section of this report. Condensed consolidated statement of total comprehensive income Year to 31 March Reviewed Audited R`million 2012 2011 Profit after taxation 1 958 2 282 Other comprehensive income: Cash flow hedge movements taken directly to other (354) 82 comprehensive income** Fair value movements on available-for-sale assets 84 23 taken directly to other comprehensive income** Gain on realisation of available-for-sale assets (42) - recycled through the income statement Foreign currency adjustments on translating 229 (128) foreign operations Total comprehensive income 1 875 2 259 Total comprehensive loss attributable to non- - (4) controlling interests Total comprehensive income attributable to 1 875 2 263 shareholders Total comprehensive income 1 875 2 259 ** Net of taxation of (R105 million) (2011: R41 million). Consolidated balance sheet At 31 March Reviewed Restated* Restated* R`million 2012 2011 2010 Assets Cash and balances at central banks 9 303 6 813 3 660 Loans and advances to banks 19 191 4 918 13 245 Non-sovereign and non-bank cash 7 885 5 829 6 455 placements Reverse repurchase agreements and cash 5 098 8 157 3 776 collateral on securities borrowed Sovereign debt securities 30 222 29 118 18 668 Bank debt securities 27 695 18 169 13 305 Other debt securities 6 284 4 888 2 003 Derivative financial instruments 10 595 11 487 7 829 Securities arising from trading 1 628 625 624 activities Investment portfolio 6 036 5 766 5 380 Loans and advances to customers 122 615 114 439 110 894 Own originated loans and advances to 2 302 934 1 369 customers securitised Other loans and advances 669 784 1 025 Other securitised assets 1 057 1 242 2 162 Interest in associated undertakings 38 135 180 Deferred taxation assets 46 42 22 Other assets 1 074 981 924 Property and equipment 308 286 164 Investment properties 5 5 5 Intangible assets 96 108 96 Loans to group companies 3 805 6 836 6 093 Total assets 255 952 221 562 197 879 Liabilities Deposits by banks 13 933 10 956 9 554 Derivative financial instruments 8 570 10 495 7 144 Other trading liabilities 172 389 454 Repurchase agreements and cash 18 174 10 733 6 281 collateral on securities lent Customer accounts (deposits) 176 094 154 772 143 390 Debt securities in issue 1 738 2 489 2 758 Liabilities arising on securitisation 2 933 931 1 487 of own originated loans and advances Liabilities arising on securitisation 492 1 243 1 220 of other assets Current taxation liabilities 1 113 1 024 857 Deferred taxation liabilities 9 349 444 Other liabilities 3 082 2 478 2 495 226 310 195 859 176 084 Subordinated liabilities 8 709 6 866 5 341 Total liabilities 235 019 202 725 181 425 Equity Ordinary share capital 29 27 25 Share premium 13 527 11 845 10 530 Other reserves (119) (100) (156) Retained income 7 496 7 065 6 051 Shareholders` equity excluding non- 20 933 18 837 16 450 controlling interests Non-controlling interests - - 4 Total equity 20 933 18 837 16 454 Total liabilities and equity 255 952 221 562 197 879 * As restated for reclassifications detailed in the commentary section of this report. Condensed consolidated statement of changes in equity Year to 31 March Reviewed Audited R`million 2012 2011 Balance at the beginning of the year 18 837 16 454 Total comprehensive income for the year 1 875 2 259 Issue of ordinary shares 1 684 1 300 Issue of perpetual preference shares - 17 Dividends paid to ordinary shareholders (1 359) (1 073) Dividends paid to perpetual preference (104) (120) shareholders Balance at the end of the year 20 933 18 837 Condensed consolidated cash flow statement Year to 31 March Reviewed Audited R`million 2012 2011 Net cash inflow from operating activities 8 353 2 492 Net cash outflow from investing activities (37) (226) Net cash inflow from financing activities 2 064 1 649 Effects of exchange rate changes on cash and cash 146 (21) equivalents Net increase in cash and cash equivalents 10 526 3 894 Cash and cash equivalents at the beginning of the 14 468 10 574 year Cash and cash equivalents at the end of the year 24 994 14 468 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). These reviewed preliminary 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 a decrease in headline earnings attributable to ordinary shareholders of 17.3% to R1,812 million (2011: R2,191 million). The balance sheet remains strong with a capital adequacy ratio of 16.1% (2011: 15.6%). For full information on the Investec Group results, refer to the combined results of Investec plc and Investec Limited or the group`s website http://www.investec.com Financial review Unless the context indicates otherwise, all comparatives referred to in the financial review relate to the year ended 31 March 2011. Operating profit is before taxation and headline adjustments. Salient operational features of the year under review include: - Total operating income before impairment losses on loans and advances decreased by 1.4% to R6,357 million (2011: R6,447 million). The components of operating income are analysed further below: - Net interest income increased by 10.3% to R4,269 million (2011: R3,870 million) largely as a result of improved margins and a sound performance from the bank`s fixed income portfolio, partially offset by higher costs on subordinated liabilities. - Net fee and commission income increased by 16.1% to R1,055 million (2011: R909 million) supported by increased activity in the corporate and advisory divisions. - Investment income decreased by 51.2% to R589 million (2011: R1,208 million) largely due to a weaker performance from the bank`s listed principal investments portfolio. - Trading income arising from customer flow increased by 23.9% to R259 million (2011: R209 million) whilst trading income arising from other trading activities decreased by 30.8% to R175 million (2011: R253 million) reflecting lower activity on the balance sheet management desk. - Since 31 March 2011 the level of defaults has improved resulting in a 2.2% decline in impairments on loans and advances to R833 million (2011: R852 million). The credit loss charge as a percentage of average gross loans and advances has improved from 0.74% at 31 March 2011 to 0.69%. The percentage of default loans (net of impairments but before taking collateral into account) to core loans and advances amounts to 2.79% (2011: 4.13%). The ratio of collateral to default loans (net of impairments) remains satisfactory at 1.68 times (2011: 1.49 times). - The ratio of total operating costs to total operating income amounts to 52.7% (2011: 49.3%). Total operating expenses grew by 5.3% to R3,351 million (2011: R3,181 million) largely as a result of inflationary adjustments. - As a result of the foregoing factors operating profit decreased by 10.0% to R2,173 million (2011: R2,414 million). Accounting policies and disclosures These reviewed preliminary condensed consolidated financial results for the year ended 31 March 2012 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 AC 500 Standards as issued by the Accounting Practices Board and the Companies Act 71 of 2008. The accounting policies applied in the preparation of the results for the year ended 31 March 2012 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. The audited financial statements and the annual report for the year ended 31 March 2012 will be posted to stakeholders on 29 June 2012. These accounts will be available on the group`s website at the same date. Restatements In terms of Investec`s recent presentations and announcements, the Investec group has positioned its strategic discussions around three core business areas namely, Asset Management, Wealth & Investment and Specialist Banking. In some respects the group believes that it has historically overcomplicated its external disclosures by elaborating on six core areas of business. As you would have already seen in the group`s recent presentations, all the banking businesses have been combined under one broader umbrella of Specialist Banking. As a result the group has chosen to refine some of its disclosures, which have impacted the disclosures for Investec Bank Limited, and are explained further below. The group believes that these refinements provide greater clarity on the key income and balance sheet drivers of its business. Consolidated income statement - The previously reported principal transaction income line item has been split into the following line items: - Investment income: income, other than margin, from securities held for the purpose of generating interest yield, dividends and capital appreciation. - Client flow trading income: income from trading activities arising from making and facilitating client activities. - Income from balance sheet management and other trading activities: includes proprietary trading income and other gains and losses as well as income earned from the balance sheet management desk. For the year ended 31 March As 2011 New previously R`million format reported Reclassifications Interest income 14 932 14 932 - Interest expense (11 062) (11 062) - Net interest income 3 870 3 870 - Fee and commission income 948 948 - Fee and commission expense (39) (39) - Principal transactions - 1 670 (1 670) Investment income 1 208 - 1 208 Trading income - From customer flow 209 - 209 - From balance sheet 253 - 253 management and other trading activities Operating loss from associates - (17) 17 Other operating income/(loss) (2) 15 (17) Total operating income before 6 447 6 447 - impairment losses on loans and advances Consolidated balance sheet The main driver behind the revision to the balance sheet is to enable a better understanding of Investec`s exposures and to minimise reconciliation points to the detailed risk disclosures in the annual report. It is noted that there are no measurement changes nor are there any changes to total assets, liabilities and equity and cash flow statement. Each category of reclassification is noted below: - Cash equivalent corporate paper - Cash equivalent advances to customers has been renamed to "non-sovereign, non- bank cash placements". These balances represent short-term placements in corporates that run an in-house treasury function. - Loans and securitisation - To better align the balance sheet with the bank`s risk management disclosures, loans and advances and securitised assets that form part of our "core" lending activities has been separated from assets that are in warehoused facilities and structured credit investments arising out of our securitisation and principal finance activities. This has resulted in a need to split loans and advances and securitised assets into two balance sheet categories for each. Securitised liabilities has been split into two line items to enable the relationship with securitised assets to be clearly identified. - Securities reclassification - The bank`s previous balance sheet split securities (other than lending related) into two key line items being trading and investment securities. This classification was driven by the accounting rule sets that mainly distinguish between instruments fair valued through profit or loss, those carried at amortised cost (held to maturity) and those fair valued through equity (available-for-sale). The bank is of the view that disclosure of the nature of exposures on the balance sheet, distinguishing between instruments held to manage balance sheet liquidity, as principal exposure and balance sheet instruments arising from trading desk activities provides more meaningful disclosure on the face of the balance sheet. The line item "Securities arising from trading activities" includes all instruments (other than derivative instruments) that are held on balance sheet in relation to trading activities. As Total
At 31 March 2011 New previously reclassi- R`million format reported fications Total assets reclassified Cash equivalent advances to - 5 829 (5 829) customers Non-sovereign and non-bank cash 5 829 - 5 829 placements Sovereign debt securities 29 118 - 29 118 Bank debt securities 18 169 - 18 169 Other debt securities 4 888 - 4 888 Trading securities - 44 352 (44 352) Securities arising from trading 625 - 625 activities Investment portfolio 5 766 - 5 766 Investment securities - 14 214 (14 214) Loans and advances to customers 114 439 115 223 (784) Securitised assets - 2 176 (2 176) Own originated loans and advances 934 - 934 to customers securitised Other loans and advances 784 - 784 Other securitised assets 1 242 - 1 242 181 794 181 794 - Total liabilities reclassified Liabilities arising on - 2 174 (2 174) securitisation Liabilities arising on 931 - 931 securitisation of own originated loans and advances Liabilities arising on 1 243 - 1 243 securitisation of other assets 2 174 2 174 - Cash Loans
equivalent and Securities At 31 March 2011 corporate securiti- reclassi- R`million paper sation fication Total assets reclassified Cash equivalent advances to (5 829) - - customers Non-sovereign and non-bank cash 5 829 - - placements Sovereign debt securities - - 29 118 Bank debt securities - - 18 169 Other debt securities - - 4 888 Trading securities - - (44 352) Securities arising from trading - - 625 activities Investment portfolio - - 5 766 Investment securities - - (14 214) Loans and advances to customers - (784) - Securitised assets - (2 176) - Own originated loans and advances - 934 - to customers securitised Other loans and advances - 784 - Other securitised assets - 1 242 - - - - Total liabilities reclassified Liabilities arising on - (2 174) - securitisation Liabilities arising on - 931 - securitisation of own originated loans and advances Liabilities arising on - 1 243 - securitisation of other assets - - -
As Total At 31 March 2010 New previously reclassi- R`million format reported fications Total assets reclassified Cash equivalent advances to - 6 455 (6 455) customers Non-sovereign and non-bank cash 6 455 - 6 455 placements Sovereign debt securities 18 668 - 18 668 Bank debt securities 13 305 - 13 305 Other debt securities 2 003 - 2 003 Trading securities - 36 375 (36 375) Securities arising from trading 624 - 624 activities Investment portfolio 5 380 - 5 380 Investment securities - 3 605 (3 605) Loans and advances to customers 110 894 111 919 (1 025) Securitised assets - 3 531 (3 531) Own originated loans and advances 1 369 - 1 369 to customers securitised Other loans and advances 1 025 - 1 025 Other securitised assets 2 162 - 2 162 161 885 161 885 - Total liabilities reclassified Liabilities arising on - 2 707 (2 707) securitisation Liabilities arising on 1 487 - 1 487 securitisation of own originated loans and advances Liabilities arising on 1 220 - 1 220 securitisation of other assets 2 707 2 707 -
Cash Loans equivalent and Securities At 31 March 2010 corporate securiti- reclassi- R`million paper sation fication Total assets reclassified Cash equivalent advances to (6 455) - - customers Non-sovereign and non-bank cash 6 455 - - placements Sovereign debt securities - - 18 668 Bank debt securities - - 13 305 Other debt securities - - 2 003 Trading securities - - (36 375) Securities arising from trading - - 624 activities Investment portfolio - - 5 380 Investment securities - - (3 605) Loans and advances to customers - (1 025) - Securitised assets - (3 531) - Own originated loans and advances - 1 369 - to customers securitised Other loans and advances - 1 025 - Other securitised assets - 2 162 - - - -
Total liabilities reclassified Liabilities arising on - (2 707) - securitisation Liabilities arising on - 1 487 - securitisation of own originated loans and advances Liabilities arising on - 1 220 - securitisation of other assets - - - Commentary on line of business segmental reclassifications The Investec Group previously reported segmental disclosures by six core business lines as well as including a segment for the group`s central functions. The group is now disclosing its segmental disclosures in three core business lines, namely, Asset Management, Wealth & Investment and Specialist Banking. In this regard: - The income statement format has been revised as discussed above. - To align with the information provided to the Chief Operating Decision Maker, the Private Banking, Investment Banking, Capital Markets and Group Services and Other divisions have now been grouped under one banner and collectively referred to as Specialist Banking for Investec Bank Limited. Accordingly no additional disclosures have been provided regarding the segmental results as the bank only has one segment. Significant information was provided in the income statement and balance sheet for this segment. The total operating profit has, however, not changed from that which was previously reported. On behalf of the Board of Investec Bank Limited Fani Titi Stephen Koseff Bernard Kantor Chairman Chief Executive Officer Managing Director 16 May 2012 Review conclusion KPMG Inc. and Ernst & Young Inc., the Group`s independent auditors, have reviewed the preliminary condensed consolidated financial results and have expressed an unmodified review conclusion on the preliminary condensed consolidated financial results, which is available for inspection at the company`s registered office. Investec Bank Limited Preference share dividend announcement Registration number 1969/004763/06 Share code: INLP ISIN: ZAE000048393 Non-redeemable non- cumulative non-participating preference shares ("preference shares") Declaration of dividend number 18 Notice is hereby given that preference dividend number 18 has been declared for the period 01 October 2011 to 31 March 2012 amounting to a gross dividend of 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, 15 June 2012. The relevant dates for the payment of dividend number 18 are as follows: Last day to trade cum-dividend Friday, 08 June 2012 Shares commence trading ex-dividend Monday, 11 June 2012 Record date Friday, 15 June 2012 Payment date Tuesday, 26 June 2012 Share certificates may not be dematerialised or rematerialised between Monday, 11 June 2012 and Friday, 15 June 2012, both dates inclusive Additional information to take note of: - The Investec Bank Limited company tax reference number: 9675/053/71/5. - The issued preference share capital of Investec Bank Limited is 15 447 630 preference shares. - The dividend paid by Investec Bank Limited is subject to South African Dividend Tax (Dividend Tax) of 15% (subject to any available exemptions as legislated). - The total Secondary Tax on Companies ("STC") credits utilised as part of this declaration amount to R52 277 869 (338.42 cents per preference share) and consequently the STC credits utilised are sufficient to cover the 15% Dividend Tax required and shareholders will receive a net dividend of 338.42 cents per preference share. By order of the Board B Coetsee Company Secretary 16 May 2012 Registered office Transfer secretaries 100 Grayston Drive Computershare Investor Services (Pty) Limited Sandown, Sandton 2196 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 Date: 17/05/2012 08:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

Share This Story