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Reviewed Preliminary condensed consolidated financial results for the year ended 31 March 2013
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 2013
Consolidated income statement
Year to 31 March Reviewed Audited
R'million 2013 2012
Interest income 15 809 15 850
Interest expense (10 926) (11 581)
Net interest income 4 883 4 269
Fee and commission income 1 051 1 146
Fee and commission expense (109) (91)
Investment income 459 589
Trading income arising from
customer flow 119 259
balance sheet management and other trading activities 220 175
Other operating (loss)/income (3) 10
Total operating income before impairment losses
on loans and advances 6 620 6 357
Impairment losses on loans and advances (868) (833)
Operating income 5 752 5 524
Operating costs (3 629) (3 351)
Profit before taxation 2 123 2 173
Taxation (245) (215)
Profit after taxation 1 878 1 958
Headline earnings
Profit after taxation 1 878 1 958
Preference dividends paid (109) (104)
Earnings attributable to ordinary shareholders 1 769 1 854
Headline adjustments, net of taxation
Gain on realisation of available-for-sale financial assets^ (28) (42)
Headline earnings attributable to ordinary shareholders 1 741 1 812
^ Taxation on headline earnings adjustments amounted to R10.9 million (Year to 31 March 2012 R16.3 million).
Condensed consolidated statement of total comprehensive income
Year to 31 March Reviewed Audited
R'million 2013 2012
Profit after taxation 1 878 1 958
Other comprehensive income:
Fair value movements on cash flow hedges taken directly
to other comprehensive income* (194) (354)
Fair value movements on available-for-sale assets taken directly
to other comprehensive income* 86 84
Gain on realisation of available-for-sale assets recycled
to the income statement* (39) (42)
Foreign currency adjustments on translating foreign operations 441 229
Total comprehensive income 2 172 1 875
Total comprehensive income attributable to ordinary shareholders 2 063 1 771
Total comprehensive income attributable to perpetual
preference shareholders 109 104
Total comprehensive income 2 172 1 875
* Net of taxation of R13.8 million (Year to 31 March 2012: R nil).
Condensed consolidated statement of changes in equity
Year to 31 March Reviewed Audited
R'million 2013 2012
Balance at the beginning of the year 20 933 18 837
Total comprehensive income for the year 2 172 1 875
Issue of ordinary shares 1 361 1 684
Dividends paid to ordinary shareholders (848) (1 359)
Dividends paid to perpetual preference shareholders (109) (104)
Balance at the end of the year 23 509 20 933
Condensed consolidated cash flow statement
Year to 31 March Reviewed Audited
R'million 2013 2012
Net cash (outflow)/inflow from operating activities (14 560) 8 353
Net cash outflow from investing activities (58) (37)
Net cash inflow from financing activities 4 191 2 064
Effects of exchange rate changes on cash and cash equivalents 406 146
Net (decrease)/increase in cash and cash equivalents (10 021) 10 526
Cash and cash equivalents at the beginning of the year 24 994 14 468
Cash and cash equivalents at the end of the year 14 973 24 994
Cash and cash equivalents are 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).
Consolidated balance sheet
At 31 March Reviewed Audited
R'million 2013 2012
Assets
Cash and balances at central banks 5 677 9 303
Loans and advances to banks 23 278 19 191
Non-sovereign and non-bank cash placements 5 875 7 885
Reverse repurchase agreements and cash collateral on securities borrowed 7 668 5 098
Sovereign debt securities 33 730 30 222
Bank debt securities 20 969 27 695
Other debt securities 6 258 6 284
Derivative financial instruments 12 161 10 595
Securities arising from trading activities 1 357 1 628
Investment portfolio 9 102 6 036
Loans and advances to customers 135 726 122 615
Own originated loans and advances to customers securitised 2 379 2 302
Other loans and advances 672 669
Other securitised assets 1 168 1 057
Interest in associated undertakings 45 38
Deferred taxation assets 55 46
Other assets 1 166 1 074
Property and equipment 224 308
Investment properties 1 5
Intangible assets 90 96
Loans to group companies 11 673 3 805
279 274 255 952
Liabilities
Deposits by banks 17 861 13 933
Derivative financial instruments 9 232 8 570
Other trading liabilities 1 063 172
Repurchase agreements and cash collateral on securities lent 18 188 18 174
Customer accounts (deposits) 185 311 176 094
Debt securities in issue 4 091 1 738
Liabilities arising on securitisation of own originated loans and advances 2 933 2 933
Liabilities arising on securitisation of other assets 588 492
Current taxation liabilities 1 142 1 113
Deferred taxation liabilities 61 9
Other liabilities 2 799 3 082
243 269 226 310
Subordinated liabilities 12 496 8 709
255 765 235 019
Equity
Ordinary share capital 32 29
Share premium 14 885 13 527
Other reserves 175 (119)
Retained income 8 417 7 496
Total equity 23 509 20 933
Total liabilities and equity 279 274 255 952
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 3.9% to R1,741 million (2012: R1,812 million). The balance sheet remains strong with a
capital adequacy ratio of 16.2% as calculated in terms of Basel III (2012: 16.1% as per Basel II). 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 2012.
Salient operational features of the period under review include:
- Total operating income before impairment losses on loans and advances increased by 4.1% to R6,620 million
(2012: R6,357 million). The components of operating income are analysed further below:
- Net interest income increased by 14.4% to R4,883 million (2012: R4,269 million) largely as a result of higher
lending balances and a sound performance from the bank's fixed income portfolio, partially offset by higher costs
on subordinated liabilities.
- Net fee and commission income decreased 10.7% to R942 million (2012: R1,055 million) and customer flow
trading income decreased 54.1% to R119 million (2012: R259 million) as a result of lower activity in the corporate
and institutional banking businesses.
- Investment income decreased by 22.1% to R459 million (2012: R589 million) largely due to a weaker performance
from the bank's listed principal investments portfolio.
- Trading income arising from other trading activities increased 25.7% to R220 million (2012: R175 million) reflecting
improved activity on the balance sheet management desk.
- Impairments on loans and advances increased from R833 million to R868 million. Default loans have decreased
significantly since 31 March 2012, with an improvement reported in the private client business partially offset by
an increase in corporate loans defaulting in the period. The credit loss charge as a percentage of average gross
core loans and advances has improved from 0.69% at 31 March 2012 to 0.65%. The percentage of default loans
(net of impairments but before taking collateral into account) to core loans and advances amounts to 1.93%
(2012: 2.79%). The ratio of collateral to default loans (net of impairments) remains satisfactory at 1.44 times
(2012: 1.68 times).
- The ratio of total operating costs to total operating income amounts to 54.8% (2012: 52.7%). Total operating expenses
at R3,629 million were 8.3% higher than the prior year (2012: R3,351 million).
- As a result of the foregoing factors profit before taxation decreased by 2.3% to R2,123 million (2012: R2,173 million).
Accounting policies and disclosures
These reviewed year-end condensed consolidated financial results have been prepared in terms of the recognition and
measurement criteria of International Financial Reporting Standards, the presentation and disclosure requirements of
IAS 34, Interim Financial Reporting, the SAICA Financial Reporting Guide as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the Companies
Act 71 of 2008.
The accounting policies applied in the preparation of the results for the year ended 31 March 2013 are consistent with
those adopted in the financial statements for the year ended 31 March 2012. The financial results have been prepared
under the supervision of Glynn Burger, the Group Risk and Finance Director. The financial statements for the year ended
31 March 2013 will be posted to stakeholders on 28 June 2013. These accounts will be available on the group's website
at the same date.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
22 May 2013
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 20
Notice is hereby given that preference dividend number 20 has been declared for the period 01 October 2012 to
31 March 2013 amounting to 353.18222 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, 14 June 2013.
The relevant dates for the payment of dividend number 20 are as follows:
Last day to trade cum-dividend Friday, 07 June 2013
Shares commence trading ex-dividend Monday, 10 June 2013
Record date Friday, 14 June 2013
Payment date Tuesday, 25 June 2013
Share certificates may not be dematerialised or rematerialised between Monday, 10 June 2013 and Friday,
14 June 2013, 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 Dividends Tax (Dividends Tax) of 15% (subject
to any available exemptions as legislated).
- No Secondary Tax on Companies ("STC") credits have been utilised in respect of this preference share dividend
declaration.
- The net dividend amounts to 300.20489 cents per preference share for preference shareholders liable to pay the
Dividends Tax and 353.18222 cents per preference share for preference shareholders exempt from paying the Dividends
Tax.
By order of the Board
B Coetsee
Company Secretary
22 May 2013
Registered office Transfer secretaries
100 Grayston Drive Computershare Investor Services (Pty) Limited
Sandown, Sandton, 2196 70 Marshall Street, Johannesburg, 2001
Investec Bank Limited
(Registration number 1969/004763/06)
Share code: INLP
ISIN: ZAE000048393
Directors:
F Titi (Chairman), D M Lawrence ^ (Deputy Chairman), S Koseff ^ (Chief Executive), B Kantor ^ (Managing Director)
S E Abrahams, G R Burger ^, D Friedland*, M P Malungani, Sir David J Prosser , K X T Socikwa
B Tapnack ^, P R S Thomas, C B Tshili
^ Executive British * Appointed 01 March 2013
Company Secretary:
B Coetsee
www.investec.com
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