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INVESTEC LIMITED - Unaudited combined consolidated financial results for the six months ended 30 September 2018

Release Date: 15/11/2018 09:00
Code(s): INL INP INPR INPP INPPR     PDF:  
 
Wrap Text
Unaudited combined consolidated financial results for the six months ended 30 September 2018

Investec Limited
Incorporated in the Republic of South Africa
Registration number: 1925/002833/06
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949

Investec plc
Incorporated in England and Wales
(Registration number 3633621)
JSE ordinary share code: INP
LSE ordinary share code: INVP
ISIN: GB00B17BBQ50

Investec plc and Investec Limited (combined results)
Unaudited combined consolidated
financial results for the six months ended 30 September 2018

Unaudited combined consolidated financial results

This announcement covers the statutory results of the Investec group for the six months ended 30 September 2018.

Overview of results

- The group has delivered a sound operational performance.

- This is notwithstanding a challenging operating environment. Rising US
  interest rates, the threat of trade wars, concerns over global growth
  prospects, weak economic growth in South Africa and Brexit-related
  uncertainty in the UK have contributed to this.

- The Asset Management and Wealth & Investment businesses have
  grown funds under management supported by strong net flows of
  GBP4.8 billion.

- The Specialist Banking business saw a substantial reduction in
  impairments as well as revenue growth supported by reasonable levels of
  client activity.

- The cost to income ratio improved marginally. Revenue growth and cost
  containment remain priorities.

- A solid base of annuity revenue has continued to support earnings
  through varying market conditions.

Overall group performance

Operating profit before goodwill, acquired intangibles, non-operating items
and taxation and after other non-controlling interests (operating profit)
increased 14.2% to GBP359.3 million (2017: GBP314.6 million) - an
increase of 17.6% on a currency neutral basis. Overall group results have
been negatively impacted by the depreciation of the average Rand: Pounds
Sterling exchange rate of approximately 4.1% over the period. The combined
South African businesses reported operating profit 5.0% ahead of the prior
period (in Rands), whilst the combined UK and Other businesses posted a
40.2% increase in operating profit in Pounds Sterling.

Salient features of the period under review are:

- Adjusted earnings attributable to shareholders before goodwill, acquired
  intangibles and non-operating items increased 8.2% to GBP265.3 million
  (2017: GBP245.3 million) - an increase of 11.1% on a currency neutral
  basis.

- Adjusted earnings per share (EPS) before goodwill, acquired intangibles
  and non-operating items increased 6.4% from 26.6 pence to 28.3 pence
  - an increase of 9.4% on a currency neutral basis.

- Annuity income as a percentage of total operating income amounted to
  75.5% (2017: 76.4%).

- The total income statement impairment charge reduced materially to
  GBP31.0 million (2017: GBP59.6 million). The annualised credit loss
  charge as a percentage of average gross core loans and advances
  subject to expected credit losses has improved to 0.34% (2017: 0.52%).

- The annualised return on adjusted average shareholders' equity increased
  to 13.4% from 12.1% at 31 March 2018.

- Third party assets under management increased 3.7% to
  GBP166.5 billion (31 March 2018: GBP160.6 billion) - an increase of
  7.2% on a currency neutral basis.

- Customer accounts (deposits) decreased 2.1% to GBP30.3 billion
  (31 March 2018: GBP31.0 billion) - an increase of 4.3% on a currency
  neutral basis.

- Core loans and advances decreased 3.7% to GBP24.2 billion
  (31 March 2018: GBP25.1 billion) - an increase of 2.4% on a currency
  neutral basis.

- The group maintained a sound capital position with common equity tier
  one (CET 1) ratios of 10.4% for Investec plc and 10.3% for Investec
  Limited, ahead of the group's CET 1 ratio target. The group is comfortable
  with its CET 1 ratio target at a 10% level, as its leverage ratios for both
  Investec Limited and Investec plc are above 7%.

- Liquidity remains strong with cash and near cash balances amounting to
  GBP12.5 billion.

- The board declared a dividend of 11.0 pence per ordinary share
  (2017: 10.5 pence) resulting in a dividend cover based on the group's
  adjusted EPS before goodwill and non-operating items of 2.6 times
  (2017: 2.5 times), consistent with the group's dividend policy.

- The proposed demerger and separate listing of Investec Asset
  Management (still subject to regulatory and shareholder approvals) is
  progressing well.

Fani Titi and Hendrik du Toit, Joint Chief Executive Officers of
Investec said:

"The outgoing executives have handed over a resilient business with positive
momentum and good growth potential. It is now up to us to implement
our strategy of simplification and greater focus, involving the demerger and
separate listing of the Asset Management business and the positioning of the
Specialist Bank and Wealth & Investment businesses for sustainable long-
term growth. Revenue growth, capital allocation and cost discipline remain
high on our agenda."

For further information please contact:

Investec +27 (0) 11 286 7070 or +44 (0) 20 7597 5546
Fani Titi, Joint Chief Executive Officer
Hendrik du Toit, Joint Chief Executive Officer
Ursula Nobrega, Investor Relations (mobile: +27 (0) 82 552 8808)
Carly Newton, Investor Relations (+44 (0) 20 7597 4493)

Brunswick (SA PR advisers)
Marina Bidoli
Tel: +27 (0)11 502 7405 / +2783 253 0478

Lansons (UK PR advisers)
Tom Baldock
Tel: +44 (0)20 7566 9716

Presentation/conference call details

A presentation on the results will commence at 9:00 UK time/11:00 SA time.
Viewing options as below:

- Live on South African TV (Business day TV channel 412 DSTV)
- A live and delayed video webcast at www.investec.com
- Toll free numbers for the telephone conference facilities
  - SA participants: 0800 200 648
  - UK participants: 0808 162 4061
  - rest of Europe and other participants: +800 246 78 700
  - Australian participants: 1800 350 100
  - USA participants: 1855 481 6362

About Investec
Investec is an international specialist bank and asset manager that provides
a diverse range of financial products and services to a select client base in
three principal markets - the UK and Europe, South Africa and Asia/Australia
as well as certain other countries. The group was established in 1974 and
currently has approximately 10 300 employees.

Investec focuses on delivering distinctive profitable solutions for its clients in
three core areas of activity namely, Asset Management, Wealth & Investment
and Specialist Banking.

In July 2002 the Investec group implemented a dual listed company
structure with listings on the London and Johannesburg Stock Exchanges.
The combined group's current market capitalisation is approximately
GBP5.0 billion.

Business unit review
Asset Management
Asset Management operating profit increased by 10.0% to GBP91.5 million
(2017: GBP83.2 million). Strong net inflows of GBP4.1 billion supported the
growth in total funds under management to GBP109.2 billion (31 March
2018: GBP103.9 billion). Flows were well spread across client regions.

Wealth & Investment
Wealth & Investment operating profit decreased by 6.3% to GBP46.4 million
(2017: GBP49.5 million). Earnings have been impacted by growth in
headcount for IT initiatives, compliance requirements, and continued
recruitment of experienced portfolio managers and financial planners
to support future revenue growth. The business generated net inflows
of GBP650 million. Total funds under management amounted to
GBP56.7 billion (31 March 2018: GBP56.0 billion).

Specialist Banking
Specialist Banking operating profit increased by 18.8% to GBP245.4 million
(2017: GBP206.5 million).

The South African business reported an increase in operating profit in Rands
of 4.2%. A combination of a weak domestic economy and political policy
uncertainty has resulted in subdued activity; reflecting in softer loan book
growth, client flow trading levels and a weaker performance from the equity
and investment property portfolios. We did however, report growth in net
interest income supported by higher net margins and continued activity from
our private client base. The annualised credit loss ratio on average core
loans and advances subject to expected credit losses amounted to 0.30%
(2017: 0.30% under the IAS 39 incurred impairment loss model), remaining
at the lower end of its long-term average trend.

The UK and Other businesses reported a 96.0% increase in operating
profit, reflecting a material decrease in impairment charges due to no longer
incurring substantial losses on the legacy portfolio. In addition, earnings
were supported by strong growth in net interest income and fee income
largely driven by the corporate business. With the investment phase in the
private bank largely complete, the business has strengthened its focus on
client acquisition and has seen sound growth in mortgage lending activity.

The bank's overall cost to income ratio improved, notwithstanding an
increase in costs driven largely by headcount growth in relation to increased
business activity and regulatory requirements. The annualised credit loss
ratio on average core loans and advances subject to expected credit losses
amounted to 0.41% (2017: 0.84% under the IAS 39 incurred impairment loss
model).

Further information on key developments within each of the business
units is provided in a detailed report published on the group's website:
https://www.investec.com
Group costs
These largely relate to group brand and marketing costs and a portion of
executive and support functions which are associated with group level
activities. These costs are not incurred by the operating divisions and are
necessary to support the operational functioning of the group. These costs
amounted to GBP24.0 million (2017: GBP24.7 million).

Financial statement analysis
Total operating income
Total operating income before expected credit loss impairment charges
increased by 7.6% to GBP1 281.3 million (2017: GBP1 191.1 million).

Net interest income increased by 11.2% to GBP405.0 million
(2017: GBP364.3 million) driven by lending activity and endowment impact
from rate rises in the UK.

Net fee and commission income increased by 5.7% to GBP703.7 million
(2017: GBP666.0 million) as a result of higher average funds under
management and net inflows in the Asset Management and Wealth
Management businesses as well as a good performance from the corporate
advisory business in the UK.

Investment income amounted to GBP41.5 million (2017: GBP62.1 million)
reflecting a weaker performance from the group's listed and unlisted
investment portfolio, as well as from the investment property portfolio in
South Africa.

Share of post taxation profit of associates of GBP20.8 million
(2017: GBP23.7 million) reflects earnings in relation to the group's
investment in the IEP Group.

Trading income arising from customer flow increased by 1.4% to
GBP65.1 million (2017: GBP64.2 million) reflecting subdued client flow
trading levels given the uncertainty in both geographies.

Trading income from balance sheet management and other trading activities
increased significantly to GBP39.0 million (2017: GBP5.1 million). The
increase is largely reflective of translation gains on foreign currency equity
investments in South Africa (partially offsetting the related weaker investment
income performance) as well as the unwind of the UK subordinated debt fair
value adjustment (recognised on the adoption of IFRS 9) as the instrument
pulls to par over its remaining term.

Expected credit loss (ECL) impairment charges
The total ECL impairment charges amounted to GBP31.0 million, a
substantial reduction from GBP59.6 million (under the IAS 39 incurred
loss model) in the prior period, primarily reflecting a reduction in legacy
impairments. The group's annualised credit loss ratio is now within its long
term average range at 0.34% (2017: 0.52%). Since 1 April 2018 gross core
loan Stage 3 assets have reduced by GBP141 million to GBP595.0 million
largely driven by a reduction of legacy exposures. Stage 3 assets (net of ECL
impairment charges) as a percentage of net core loans subject to ECL was
1.7% (1 April 2018: 2.0%).

Operating costs
The cost to income ratio improved marginally, amounting to 66.6%
(2017: 66.9%). Total operating costs grew by 7.2% to GBP854.2 million
(2017: GBP797.1 million) largely driven by growth in headcount to support
both activity levels and increased regulatory requirements.

Taxation
The effective tax rate amounted to 16.1% (2017: 14.5%), which remains
below the group's historical effective tax rate mainly impacted by the
utilisation of tax losses.

Profit attributable to non-controlling interests
Profit attributable to non-controlling interests mainly comprises:

- GBP12.8 million profit attributable to non-controlling interests in the Asset
  Management business.
- GBP36.4 million profit attributable to non-controlling interests in the
  Investec Property Fund.

Balance sheet analysis
Since 31 March 2018:

- Shareholders equity decreased by 5.9% to GBP4.2 billion primarily as
  a result of the adoption of IFRS 9 on 1 April 2018 as well as from the
  depreciation of the closing Rand: Pounds Sterling exchange rate.
- Net asset value per share decreased 6.7% to 422.0 pence and net
  tangible asset value per share (which excludes goodwill and intangible
  assets) decreased 7.2% to 372.7 pence, primarily as a result of the
  adoption of IFRS 9 as well as from the depreciation of the closing Rand:
  Pounds Sterling exchange rate.
- The annualised return on adjusted average shareholders' equity increased
  from 12.1% to 13.4%.

Liquidity and funding
As at 30 September 2018 the group held GBP12.5 billion in cash and
near cash balances (GBP6.5 billion in Investec plc and R110.8 billion in
Investec Limited) which amounted to 41.1% of customer deposits. The
group continues to focus on maintaining an optimal overall liquidity and
funding profile. Loans and advances to customers as a percentage of
customer deposits amounted to 78.2% (31 March 2018: 79.6%). The group
comfortably exceeds Basel liquidity requirements for the Liquidity Coverage
Ratio (LCR) and Net Stable Funding Ratio (NSFR). Investec Bank Limited
(solo basis) ended the period to 30 September 2018 with the three-month
average of its LCR at 137.4% and an NSFR of 111.3%. Further detail with
respect to the bank's LCR and NSFR in South Africa is provided on the
website. For Investec plc and Investec Bank plc (solo basis) the LCR is
calculated using our own interpretations of the EU Delegated Act. The LCR
reported to the PRA at 30 September 2018 was 332% for Investec plc and
339% for Investec Bank plc (solo basis). Ahead of the implementation of the
final NSFR rules, the group has applied its own interpretations of regulatory
guidance and definitions from the BCBS final guidelines to calculate the
NSFR which was 140% for Investec plc and 134% for Investec Bank plc
(solo basis). The reported NSFR and LCR may change over time with
regulatory developments and guidance.

Capital adequacy and leverage ratios
The group is targeting a minimum common equity tier 1 capital ratio
above 10% and a total capital adequacy ratio range of 14% to 17% on
a consolidated basis for each of Investec plc and Investec Limited. The
group's anticipated fully loaded Basel III common equity tier 1 (CET 1) ratios
in both Investec plc and Investec Limited are reflected in the following table.
The group expects to implement the Foundation Internal Ratings-Based
(FIRB) approach in South Africa by the end of the 2019 financial year, subject
to final regulatory approval.
                                    30 Sept  1 April    31 March
                                       2018     2018        2018
Investec plc^
Capital adequacy ratio                15.4%    15.0%       15.4%
Tier 1 ratio                          12.2%    12.4%       12.9%
Common equity tier 1 ratio            10.4%    10.5%       11.0%
Common equity tier 1 ratio ('fully
loaded'*)                             10.0%    10.3%       11.0%
Leverage ratio (current)               7.7%     8.3%        8.5%
Leverage ratio ('fully loaded'*)       7.3%     8.0%        8.4%

Investec Limited**
Capital adequacy ratio                14.7%    14.5%       14.6%
Tier 1 ratio                          11.1%    10.8%       11.0%
Common equity tier 1 ratio            10.3%    10.0%       10.2%
Common equity tier 1 ratio ('fully
loaded'*)                             10.2%     9.8%       10.2%
Leverage ratio (current)               7.5%     7.4%        7.5%
Leverage ratio ('fully loaded'*)       7.1%     6.9%        7.1%

^   The capital adequacy disclosures follow Investec's normal basis of presentation so
    as to show a consistent basis of calculation across the jurisdictions in which the
    group operates. For Investec plc this does not include the deduction of foreseeable
    charges and dividends when calculating CET 1 capital as required under the
    Capital Requirements Regulation and European Banking Authority technical
    standards. The impact of this deduction totalling GBP45 million for Investec plc
    would lower the CET 1 ratio by 30bps (31 March 2018: 45bps).

**  Investec Limited's capital information includes unappropriated profits. If
    unappropriated profits are excluded from the capital information, Investec
    Limited's CET 1 ratio would be 27bps (31 March 2018: 25bps) lower.

*   The CET 1 fully loaded ratio and the fully loaded leverage ratio assume full adoption
    of IFRS 9 and full adoption of all CRD IV rules or South African Prudential Authority
    regulations, as applicable in the relevant jurisdictions. As a result of the adoption
    of IFRS 9 Investec plc elected to designate its subordinated fixed rate medium-
    term notes due in 2022 at fair value. By the time of full adoption of IFRS 9 in 2023,
    these subordinated liabilities will have reached final maturity and will be redeemed
    at par value. The remaining interest rate portion of the fair value adjustment at
    30 September 2018 of GBP18 million (post-taxation), has therefore been excluded
    from the fully loaded ratios as it will be released into profit and loss over the
    remaining life of the instrument.

Additional information - proposed demerger and listing
of Investec Asset Management business
On 14 September 2018, the board of directors of Investec plc and Investec
Limited announced that the Investec Asset Management business would
become a separately listed entity. The demerger and the listing of Investec
Asset Management is subject to regulatory, shareholder and other approvals,
and is expected to be completed during the second half of 2019.

Outlook
Notwithstanding macro challenges, we believe that our current business
momentum and our drive to simplify and focus the business, together
with our commitment to cost discipline, will support our long-term growth
aspirations.

On behalf of the boards of Investec plc and Investec Limited

Perry Crosthwaite            Fani Titi                     Hendrik du Toit
Chairman                     Joint Chief Executive         Joint Chief Executive
                             Officer                       Officer
14 November 2018

Notes to the commentary section above
Presentation of financial information
Investec operates under a Dual Listed Companies (DLC) structure with
primary listings of Investec plc on the London Stock Exchange and Investec
Limited on the JSE Limited.

In terms of the contracts constituting the DLC structure, Investec plc and
Investec Limited effectively form a single economic enterprise in which
the economic and voting rights of ordinary shareholders of the companies
are maintained in equilibrium relative to each other. The directors of the
two companies consider that for financial reporting purposes, the fairest
presentation is achieved by combining the results and financial position of
both companies.

Accordingly, the interim results for Investec plc and Investec Limited
present the results and financial position of the combined DLC group under
International Financial Reporting Standards (IFRS), denominated in Pounds
Sterling. In the commentary above, all references to Investec or the group
relate to the combined DLC group comprising Investec plc and Investec
Limited.

Unless the context indicates otherwise, all comparatives included in the
commentary above relate to the six months ended 30 September 2017.

Amounts represented on a currency neutral basis for income statement
items assume that the relevant average exchange rates for the six months to
30 September 2018 remain the same as those in the prior period. Amounts
represented on a currency neutral basis for balance sheet items assume that
the relevant closing exchange rates at 30 September 2018 remain the same
as those at 31 March 2018.

Foreign currency impact
The group's reporting currency is Pounds Sterling. Certain of the group's
operations are conducted by entities outside the UK. The results of
operations and the financial position of the individual companies are
reported in the local currencies in which they are domiciled, including Rands,
Australian Dollars, Euros and US Dollars. These results are then translated
into Pounds Sterling at the applicable foreign currency exchange rates for
inclusion in the group's combined consolidated financial statements. In the
case of the income statement, the weighted average rate for the relevant
period is applied and, in the case of the balance sheet, the relevant closing
rate is used.

The following table sets out the movements in certain relevant exchange
rates against Pounds Sterling over the period:

                    Six months to     Year to       Six months to
                     30 Sep 2018    31 Mar 2018      30 Sep 2017

Currency per        Period        Period            Period
GBP1.00               end Average   end Average       end Average

South African
Rand                18.44   17.76   16.62   17.21   18.10   17.06
Australian Dollar    1.80    1.79    1.83    1.72    1.71    1.69
Euro                 1.12    1.13    1.14    1.14    1.13    1.14
US Dollar            1.30    1.33    1.40    1.33    1.34    1.30

Exchange rates between local currencies and Pounds Sterling have
fluctuated over the period. The most significant impact arises from the
volatility of the Rand. The average exchange rate over the period has
depreciated by 4.1% and the closing rate has depreciated by 11.0% since
31 March 2018.

Accounting policies and disclosures
These unaudited summarised combined 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 accounting policies applied in the preparation of the results for the period
to 30 September 2018 are consistent with those adopted in the financial
statements for the year ended 31 March 2018 except as noted below.

On 1 April 2018 the group adopted IFRS 9 'Financial Instruments' which
replaced IAS 39 and sets out the new requirements for the recognition
and measurement of financial instruments. These requirements focus
primarily on the classification and measurement of financial instruments
and measurement of impairment losses based on an expected credit loss
(ECL) model as opposed to an incurred loss methodology under IAS 39.
Disclosure related to the initial application and the impact of the transition
from IAS 39 to IFRS 9 were included in the group's transition disclosures
published on 15 June 2018 which can be accessed via the Investec website
at www.investec.com.

Additionally, on 1 April 2018 the group adopted IFRS 15 'Revenue from
contracts with customers' which replaced IAS 18 'Revenue'. IFRS 15
provides a principles-based approach for revenue recognition and introduces
the concept of recognising revenue for obligations as they are satisfied. It
applies to all contracts with customers except leases, financial instruments
and insurance contracts. The group's measurement and recognition
principles were aligned to the new standard and hence there has been no
material impact on measurement and recognition principles or on disclosure
requirements from the adoption of IFRS 15.

The financial results have been prepared under the supervision of
Glynn Burger, the Group Risk and Finance Director. The financial statements
for the six months to 30 September 2018 will be posted to stakeholders on
30 November 2018. These financial results will be available on the group's
website on the same date.

Proviso
- Please note that matters discussed in this announcement may contain
  forward looking statements which are subject to various risks and
  uncertainties and other factors, including, but not limited to:
  - the further development of standards and interpretations under
    IFRS applicable to past, current and future periods, evolving
    practices with regard to the interpretation and application of
    standards under IFRS.
  - domestic and global economic and business conditions.
  - market related risks.
-  A number of these factors are beyond the group's control.
-  These factors may cause the group's actual future results,
   performance or achievements in the markets in which it operates to
   differ from those expressed or implied.
-  Any forward looking statements made are based on the knowledge
   of the group at 14 November 2018.
-  The information in the announcement for the six months ended
   30 September 2018, which was approved by the board of directors
   on 14 November 2018, does not constitute statutory accounts
   as defined in Section 435 of the UK Companies Act 2006. The
   31 March 2018 financial statements were filed with the registrar and were
   unqualified with the audit report containing no statements in respect of
   Sections 498(2) or 498(3) of the UK Companies Act.
-  This announcement is available on the group's website:
   www.investec.com

Financial assistance
Shareholders are referred to Special Resolution number 3, which was
approved at the annual general meeting held on 8 August 2018, relating to
the provision of direct or indirect financial assistance in terms of Section 45
of the South African Companies Act, No 71 of 2008 to related or inter-related
companies. Shareholders are hereby notified that in terms of S45(5)(a) of the
South African Companies Act, the boards of directors of Investec Limited
and Investec Bank Limited provided such financial assistance during the
period 1 April 2018 to 30 September 2018 to various group subsidiaries.

Financial information
Salient financial features
                                               Results in Pounds Sterling                                  Results in Rand

                                                                           Neutral
                                                                         currency^   Neutral
                           Six months to  Six months to              Six months to  currency   Six months to   Six months to
                            30 September   30 September        %      30 September         %    30 September    30 September         %
                                    2018           2017    change             2018    change            2018            2017    change

Operating profit before
taxation* (million)                359.3          314.6     14.2%            370.1     17.6%           6 415           5 378     19.3%
Earnings attributable to
shareholders (million)             279.9          252.4     10.9%            287.5     13.9%           4 983           4 321     15.3%
Adjusted earnings
attributable to
shareholders** (million)           265.3          245.3      8.2%            272.5     11.1%           4 725           4 199     12.5%
Adjusted earnings
per share**                        28.3p          26.6p      6.4%            29.1p      9.4%            504c            455c     10.8%
Basic earnings per share           27.6p          25.8p      7.0%            28.4p     10.1%            492c            443c     11.1%
Headline earnings
per share                          27.4p          24.6p     11.4%            28.1p     14.2%            487c            422c    15.4 %
Dividends per share                11.0p          10.5p      4.8%              n/a        n/a           206c            200c      3.0%

* Before goodwill, acquired intangibles, non-operating items and after other non-controlling interests.
** Before goodwill, acquired intangibles, non-operating items and after non-controlling interests.
^ For income statement items we have used the average Rand:Pound Sterling exchange rate that was applied in the prior year, i.e. 17.06.

                                                                                     Results in Pounds Sterling

                                                                    Actual as   Actual as           Actual         Neutral
                                                                     reported    reported               as      currency^^    Neutral
                                                                           At          At         reported              At   currency
                                                                 30 September    31 March                %    30 September          %
                                                                         2018        2018           change            2018     change

Net asset value per share                                              422.0p      452.5p           (6.7%)          440.9p     (2.6%)
Net tangible asset value per share                                     372.7p      401.5p           (7.2%)          391.2p     (2.6%)
Total equity (million)                                                  5 118       5 428           (5.7%)           5 429       0.0%
Total assets (million)                                                 56 137      57 617           (2.6%)          59 918       4.0%
Core loans and advances (million)                                      24 190      25 132           (3.7%)          25 740       2.4%
Cash and near cash balances (million)                                  12 467      12 825           (2.8%)          13 125       2.3%
Customer deposits (million)                                            30 349      30 987           (2.1%)          32 317       4.3%
Third party assets under management (million)                         166 512     160 576            3.7%          172 180       7.2%
Return on average adjusted shareholders' equity                         13.4%       12.1%
Return on average risk-weighted assets                                  1.54%       1.45%
Loans and advances to customers as a % of customer deposits             78.2%       79.6%
Credit loss ratio (expected credit loss impairment charges on
gross core loans and advances as a % of average gross core
loans and advances)                                                     0.34%       0.61%

For balance sheet items we have assumed that the Rand:Pound Sterling exchange rate has remained neutral since March 2018.

Condensed combined consolidated income statement
                                                                                        Six months to    Six months to       Year to
                                                                                         30 September     30 September      31 March
GBP'000                                                                                          2018             2017          2018

Interest income                                                                             1 285 916        1 225 130     2 491 009
Interest expense                                                                            (880 902)        (860 809)   (1 730 611)
Net interest income                                                                           405 014          364 321       760 398
Fee and commission income                                                                     804 249          753 835     1 543 447
Fee and commission expense                                                                  (100 540)         (87 825)     (182 240)
Investment income                                                                              41 472           62 074       130 048
Share of post taxation profit of associates                                                    20 782           23 677        46 823
Trading income/(loss) arising from
-  customer flow                                                                               65 078           64 160       138 226
-  balance sheet management and other trading activities                                       39 031            5 146       (4 307)
Other operating income                                                                          6 238            5 669        11 115
Total operating income before expected credit losses/impairment losses                      1 281 324        1 191 057     2 443 510
Expected credit loss impairment charges*                                                     (31 022)                -             -
Impairment losses on loans and advances*                                                            -         (59 593)     (148 556)
Operating income                                                                            1 250 302        1 131 464     2 294 954
Operating costs                                                                             (852 982)        (795 883)   (1 632 740)
Depreciation on operating leased assets                                                       (1 207)          (1 177)       (2 421)
Operating profit before goodwill and acquired intangibles                                     396 113          334 404       659 793
Amortisation of acquired intangibles                                                          (7 861)          (8 142)      (16 255)
Operating profit                                                                              388 252          326 262       643 538
Additional costs on acquisition of subsidiary                                                       -                -       (6 039)
Profit before taxation                                                                        388 252          326 262       637 499
Taxation on operating profit before goodwill and acquired intangibles                        (60 301)         (44 996)      (59 099)
Taxation on acquired intangibles and acquisition/disposal/integration of subsidiaries           1 577            1 631         3 253
Profit after taxation                                                                         329 528          282 897       581 653
Profit attributable to other non-controlling interests                                       (36 846)         (19 800)      (52 288)
Profit attributable to Asset Management non-controlling interests                            (12 828)         (10 663)      (23 817)
Earnings attributable to shareholders                                                         279 854          252 434       505 548
Amortisation of acquired intangibles                                                            7 861            8 142        16 255
Additional costs on acquisition of subsidiary                                                       -                -         6 039
Taxation on acquired intangibles and acquisition/disposal/integration of subsidiaries         (1 577)          (1 631)       (3 253)
Preference dividends paid                                                                    (21 086)         (14 101)      (32 980)
Accrual adjustment on earnings attributable to other equity holders                               271              436         (547)
Adjusted earnings                                                                             265 323          245 280       491 062
Headline adjustments**                                                                        (8 724)         (18 010)      (41 415)
Headline earnings                                                                            256 599          227 270        449 647
Earnings per share (pence)
- Basic                                                                                         27.6              25.8          51.2
- Diluted                                                                                       26.8              24.9          49.8
Adjusted earnings per share (pence)
- Basic                                                                                         28.3              26.6          53.2
- Diluted                                                                                       27.5              25.7          51.7
Dividends per share (pence)
- Interim                                                                                       11.0              10.5          10.5
- Final                                                                                          n/a               n/a          13.5
Headline earnings per share (pence)
- Basic                                                                                         27.4              24.6          48.7
- Diluted                                                                                       26.6              23.8          47.4
Number of weighted average shares (million)                                                    937.2             922.9         923.5

* On adoption of IFRS 9, there is a move from an incurred loss model to an expected credit loss methodology.
** The headline earnings adjustments are made up of property revaluations of GBP2.2 million (2017: GBP5.5 million), amortisation of 
   acquired intangibles of GBP7.9 million (2017: GBP8.1 million), gains on available-for-sale instruments recycled to the income 
   statement GBPnil (2017: GBP4.8 million), profit on realisation of associate company of GBPnil (2017: GBP0.8 million), taxation 
   on acquired intangibles and acquisition/disposal/integration of subsidiaries GBP1.6 million (2017: GBP1.6 million) and accrual
   adjustment on earnings attributable to other equity holders of GBP0.3 million (2017: GBP0.4 million). This line represents the 
   reconciling items from adjusted earnings to headline earnings.

Summarised combined consolidated statement of comprehensive income
                                                                                          Six months to    Six months to      Year to
                                                                                           30 September     30 September     31 March
GBP'000                                                                                            2018             2017         2018

Profit after taxation                                                                           329 528          282 897      581 653
Other comprehensive income:
Items that may be reclassified to the income statement
Fair value movements on cash flow hedges taken directly to other comprehensive income*            (788)          (1 824)      (5 746)
Gains on debt instruments at FVOCI recycled to the income statement*^                           (1 999)                -            -
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive
income*^                                                                                       (12 023)                -            -
Gains on realisation of available-for-sale assets recycled to the income statement*^                  -          (4 760)      (6 676)
Fair value movements on available-for-sale assets taken directly to other
comprehensive income*^                                                                                -           13 816       20 051
Foreign currency adjustments on translating foreign operations                                (249 312)        (220 844)     (25 300)
Items that will never be reclassified to the income statement 
Remeasurement of net defined pension liability                                                       69                -        3 938
Gains and losses attributable to own credit risk                                                 10 318                -            -
Total comprehensive income                                                                       75 793           69 285      567 920
Total comprehensive income attributable to ordinary shareholders                                 70 757           72 485      451 913
Total comprehensive (loss)/income attributable to non-controlling interests                    (16 050)         (17 301)       83 027
Total comprehensive income attributable to perpetual preferred securities                        21 086           14 101       32 980
Total comprehensive income                                                                       75 793           69 285      567 920

* Net of taxation of (GBP2.1 million) [six months to 30 September 2017: GBP3.0 million, year to 31 March 2018: GBP11.7 million].
^ On adoption of IFRS 9 on 1 April 2018, the fair value reserve was introduced, replacing the available-for-sale reserve.

Summarised combined consolidated cash flow statement
                                                                                          Six months to    Six months to       Year to
                                                                                           30 September     30 September      31 March
GBP'000                                                                                            2018             2017          2018

Cash inflows from operations                                                                    404 278          357 998       732 242
Increase in operating assets                                                                (1 926 505)      (1 009 683)   (3 352 869)
Increase in operating liabilities                                                             1 845 075          705 103     3 075 779
Net cash inflow from operating activities                                                       322 848           53 418       455 152
Net cash inflow/(outflow) from investing activities                                              58 190            5 292      (37 799)
Net cash (outflow)/inflow from financing activities                                           (203 047)        (121 852)        45 383
Effects of exchange rates on cash and cash equivalents                                        (106 538)        (144 595)      (54 085)
Net increase/(decrease) in cash and cash equivalents                                             71 453        (207 737)       408 651
Cash and cash equivalents at the beginning of the period                                      6 130 379        5 721 728     5 721 728
Cash and cash equivalents at the end of the period                                            6 201 832        5 513 991     6 130 379

Cash and cash equivalents is defined as including; cash and balances at central banks, on demand loans and advances to banks and cash 
equivalent loans and advances to customers (all of which have a maturity profile of less than three months).

Condensed combined consolidated balance sheet

At                                                                            30 September        1 April      31 March    30 September
GBP'000                                                                               2018          2018*         2018*            2017

Assets
Cash and balances at central banks                                               4 402 571      4 040 010     4 040 512       3 356 259
Loans and advances to banks                                                      2 194 184      2 164 598     2 165 533       2 308 618
Non-sovereign and non-bank cash placements                                         566 221        599 982       601 243         574 521
Reverse repurchase agreements and cash collateral on securities borrowed         1 641 435      2 207 137     2 207 477       1 690 036
Sovereign debt securities                                                        4 483 385      4 907 624     4 910 027       3 608 316
Bank debt securities                                                               609 522        591 428       587 164         604 511
Other debt securities                                                            1 109 942        898 122       903 603         968 597
Derivative financial instruments                                                 1 098 812      1 345 744     1 352 408       1 201 602
Securities arising from trading activities                                       1 921 010      1 434 391     1 434 391       1 395 766
Investment portfolio                                                               950 455        956 560       885 499         911 480
Loans and advances to customers                                                 23 739 734     24 410 334    24 673 009      22 351 228
Own originated loans and advances to customers securitised                         452 341        458 814       459 088         445 672
Other loans and advances                                                           207 251        345 742       347 809         367 401
Other securitised assets                                                           142 884        148 387       148 387         153 786
Interests in associated undertakings                                               421 139        467 852       467 852         371 294
Deferred taxation assets                                                           215 388        242 239       157 321         123 435
Other assets                                                                     2 006 480      1 875 357     1 876 116       2 016 057
Property and equipment                                                             269 174        233 340       233 340         100 910
Investment properties                                                            1 041 323      1 184 097     1 184 097       1 063 771
Goodwill                                                                           367 480        368 803       368 803         366 969
Intangible assets                                                                  120 333        125 389       125 389         132 692
                                                                                47 961 064     49 005 950    49 129 068      44 112 921
Other financial instruments at fair value through profit or loss in respect
of liabilities to customers                                                      8 176 040      8 487 776     8 487 776       7 705 206
                                                                                56 137 104     57 493 726    57 616 844      51 818 127
Liabilities
Deposits by banks                                                                3 011 094      2 931 267     2 931 267       2 246 115
Derivative financial instruments                                                 1 402 260      1 471 563     1 471 563       1 169 314
Other trading liabilities                                                        1 006 572        960 166       960 166         968 917
Repurchase agreements and cash collateral on securities lent                       488 271        655 840       655 840         730 170
Customer accounts (deposits)                                                    30 348 761     30 985 251    30 987 173      27 966 006
Debt securities in issue                                                         2 734 128      2 717 187     2 717 187       2 549 264
Liabilities arising on securitisation of own originated loans and advances         120 161        136 812       136 812         133 307
Liabilities arising on securitisation of other assets                              121 161        127 853       127 853         131 740
Current taxation liabilities                                                       170 794        185 486       185 486         197 244
Deferred taxation liabilities                                                       30 507         32 158        32 158          38 304
Other liabilities                                                                1 812 573      2 019 906     2 012 268       1 827 251
                                                                                41 246 282     42 223 489    42 217 773      37 957 632
Liabilities to customers under investment contracts                              8 172 496      8 484 296     8 484 296       7 702 724
Insurance liabilities, including unit-linked liabilities                             3 544          3 480         3 480           2 482
                                                                                49 422 322     50 711 265    50 705 549      45 662 838
Subordinated liabilities                                                         1 596 958      1 619 878     1 482 987       1 389 091
                                                                                51 019 280     52 331 143    52 188 536      47 051 929
Equity
Ordinary share capital                                                                 245            240           240             240
Perpetual preference share capital                                                      31             31            31              31
Share premium                                                                    2 490 403      2 416 736     2 416 736       2 404 171
Treasury shares                                                                  (210 912)      (160 132)     (160 132)       (196 198)
Other reserves                                                                   (530 880)      (406 718)     (345 606)       (460 907)
Retained income                                                                  2 430 803      2 326 212     2 530 825       2 385 707
Shareholders' equity excluding non-controlling interests                         4 179 690      4 176 369     4 442 094       4 133 044
Other Additional Tier 1 securities in issue                                        298 808        304 150       304 150          30 386
Non-controlling interests                                                          639 326        682 064       682 064         602 768
- Perpetual preferred securities issued by subsidiaries                             83 204         92 312        92 312          84 763
- Non-controlling interests in partially held subsidiaries                         556 122        589 752       589 752         518 005
Total equity                                                                     5 117 824      5 162 583     5 428 308       4 766 198
Total liabilities and equity                                                    56 137 104     57 493 726    57 616 844      51 818 127

* The 1 April 2018 balance sheet has been presented on an IFRS 9 basis and the comparative as at 31 March 2018 on an IAS 39 basis.

Summarised combined consolidated statement of changes in equity
                                                                                            Six months to      Year to    Six months to
                                                                                             30 September     31 March     30 September
GBP'000                                                                                              2018         2018             2017

Balance at the beginning of the period                                                          5 428 308    4 808 629        4 808 629
Adoption of IFRS 9                                                                              (265 725)            -                -
Total comprehensive income for the period                                                          75 793      567 920           69 285
Share-based payments adjustments                                                                   33 084       69 218           34 688
Dividends paid to ordinary shareholders                                                         (127 943)    (227 908)        (123 230)
Dividends declared to perpetual preference shareholders                                           (7 528)     (15 736)          (8 160)
Dividends paid to perpetual preference shareholders included in non-controlling interests        (13 558)     (17 244)          (5 941)
Dividends paid to non-controlling interests                                                      (27 378)     (63 688)         (29 272)
Issue of ordinary shares                                                                          103 141      125 240          105 206
Issue of Other Additional Tier 1 security instruments                                                   -      271 058                -
Issue of equity by subsidiaries                                                                         -       12 695                -
Net equity impact of non-controlling interest movements                                                 -       20 057            4 518
Net equity movement of interest in associate undertakings                                         (5 671)            -                -
Movement of treasury shares                                                                      (74 699)    (121 933)         (89 525)
Balance at the end of the period                                                                5 117 824    5 428 308        4 766 198

Combined consolidated segmental analysis

For the six months to 30 September                                                                       UK and    Southern       Total
GBP'000                                                                                                   Other      Africa       group

Segmental geographical and business analysis of operating profit before goodwill,
acquired intangibles, non-operating items, taxation and after other non-controlling
interests
2018
Asset Management                                                                                         56 840      34 686      91 526
Wealth & Investment                                                                                      32 864      13 544      46 408
Specialist Banking                                                                                       80 756     164 625     245 381
                                                                                                        170 460     212 855     383 315
Group costs                                                                                            (17 227)     (6 821)    (24 048)
Total group                                                                                             153 233     206 034     359 267
Other non-controlling interest - equity                                                                                          36 846
Operating profit                                                                                                                396 113

2017
Asset Management                                                                                         49 949      33 284      83 233
Wealth & Investment                                                                                      35 441      14 087      49 528
Specialist Banking                                                                                       41 208     165 291     206 499
                                                                                                        126 598     212 662     339 260
Group costs                                                                                            (17 295)     (7 361)    (24 656)
Total group                                                                                             109 303     205 301     314 604
Other non-controlling interest - equity                                                                                          19 800
Operating profit                                                                                                                334 404

Analysis of financial assets and liabilities by category of financial instrument
                                                                                                     Total
                                                                                     Total       financial     Non-financial
                                                                                 financial     instruments       instruments
At 30 September 2018                                                           instruments    at amortised         or scoped
GBP'000                                                                      at fair value            cost     out of IFRS 9        Total

Assets
Cash and balances at central banks                                                    695        4 401 876                 -    4 402 571
Loans and advances to banks                                                             -        2 194 184                 -    2 194 184
Non-sovereign and non-bank cash placements                                         47 613          518 608                 -      566 221
Reverse repurchase agreements and cash collateral on securities borrowed          527 934        1 113 501                 -    1 641 435
Sovereign debt securities                                                       4 200 240          283 145                 -    4 483 385
Bank debt securities                                                              274 025          335 497                 -      609 522
Other debt securities                                                             698 726          411 216                 -    1 109 942
Derivative financial instruments                                                1 098 812                -                 -    1 098 812
Securities arising from trading activities                                      1 921 010                -                 -    1 921 010
Investment portfolio                                                              950 455                -                 -      950 455
Loans and advances to customers                                                 2 443 852       21 295 882                 -   23 739 734
Own originated loans and advances to customers securitised                              -          452 341                 -      452 341
Other loans and advances                                                                -          207 251                 -      207 251
Other securitised assets                                                          125 814           17 070                 -      142 884
Interests in associated undertakings                                                    -                -           421 139      421 139
Deferred taxation assets                                                                -                -           215 388      215 388
Other assets                                                                      228 394        1 160 686           617 400    2 006 480
Property and equipment                                                                  -                -           269 174      269 174
Investment properties                                                                   -                -         1 041 323    1 041 323
Goodwill                                                                                -                -           367 480      367 480
Intangible assets                                                                       -                -           120 333      120 333
                                                                               12 517 570       32 391 257         3 052 237   47 961 064
Other financial instruments at fair value through profit or loss in respect
of liabilities to customers                                                     8 176 040                -                 -    8 176 040
                                                                               20 693 610       32 391 257         3 052 237   56 137 104

Liabilities
Deposits by banks                                                                       -        3 011 094                 -    3 011 094
Derivative financial instruments                                                1 402 260                -                 -    1 402 260
Other trading liabilities                                                       1 006 572                -                 -    1 006 572
Repurchase agreements and cash collateral on securities lent                      175 187          313 084                 -      488 271
Customer accounts (deposits)                                                    2 300 787       28 047 974                 -   30 348 761
Debt securities in issue                                                          390 098        2 344 030                 -    2 734 128
Liabilities arising on securitisation of own originated loans and advances              -          120 161                 -      120 161
Liabilities arising on securitisation of other assets                             121 161                -                 -      121 161
Current taxation liabilities                                                            -                -           170 794      170 794
Deferred taxation liabilities                                                           -                -            30 507       30 507
Other liabilities                                                                  37 059        1 167 966           607 548    1 812 573
                                                                                5 433 124       35 004 309           808 849   41 246 282
Liabilities to customers under investment contracts                             8 172 496                -                 -    8 172 496
Insurance liabilities, including unit-linked liabilities                            3 544                -                 -        3 544
                                                                               13 609 164       35 004 309           808 849   49 422 322
Subordinated liabilities                                                          385 060        1 211 898                 -    1 596 958
                                                                               13 994 224       36 216 207           808 849   51 019 280
Financial instruments carried at fair value
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements 
are categorised into different levels in the fair value hierarchy based on the inputs to the valuation technique used. The different 
levels are identified as follows:

Level 1 - quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly 
          (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs)

                                                                                                              Fair value category
                                                                             Total financial
At 30 September 2018                                                             instruments
GBP'000                                                                        at fair value        Level 1       Level 2       Level 3

Assets
Cash and balances at central banks                                                       695            695             -             -
Non-sovereign and non-bank cash placements                                            47 613          4 495        43 118             -
Reverse repurchase agreements and cash collateral on securities borrowed             527 934              -       527 934             -
Sovereign debt securities                                                          4 200 240      4 200 240             -             -
Bank debt securities                                                                 274 025        266 206         7 819             -
Other debt securities                                                                698 726        194 776       411 716        92 234
Derivative financial instruments                                                   1 098 812              -     1 060 819        37 993
Securities arising from trading activities                                         1 921 010      1 917 605         3 405             -
Investment portfolio                                                                 950 455        182 062        31 590       736 803
Loans and advances to customers                                                    2 443 852              -       970 182     1 473 670
Other securitised assets                                                             125 814              -             -       125 814
Other assets                                                                         228 394        228 394             -             -
Other financial instruments at fair value through profit or loss in respect
of liabilities to customers                                                        8 176 040      8 176 040             -             -
                                                                                  20 693 610     15 170 513     3 056 583     2 466 514
Liabilities
Derivative financial instruments                                                   1 402 260              -     1 382 215        20 045
Other trading liabilities                                                          1 006 572        883 181       123 391             -
Repurchase agreements and cash collateral on securities lent                         175 187              -       175 187             -
Customer accounts (deposits)                                                       2 300 787              -     2 300 787             -
Debt securities in issue                                                             390 098              -       390 098             -
Liabilities arising on securitisation of other assets                                121 161              -             -       121 161
Other liabilities                                                                     37 059              -        37 059             -
Subordinated liabilities                                                             385 060        385 060             -             -
Liabilities to customers under investment contracts                                8 172 496      8 172 496             -             -
Insurance liabilities, including unit-linked liabilities                               3 544          3 544             -             -
                                                                                  13 994 224      9 444 281     4 408 737       141 206

Net financial assets at fair value                                                 6 699 386      5 726 232   (1 352 154)     2 325 308

Transfers between level 1 and level 2
There were no significant transfers between level 1 and level 2 in the current period.

The group transfers between levels within the fair value hierarchy when the significance of the unobservable inputs change or if the valuation 
methods change.

Level 2 financial assets and financial liabilities

The following table sets out the group's principal valuation techniques as at 30 September 2018 used in determining the fair value of its 
financial assets and financial liabilities that are classified within level 2 of the fair value hierarchy.

                                             Valuation basis/techniques                              Main assumptions
Assets

Non-sovereign and non-bank cash              Discounted cash flow model                              Yield curves
placements
Reverse repurchase agreements and            Discounted cash flow model, Hermite interpolation       Yield curves
cash collateral on securities borrowed
Bank debt securities                         Discounted cash flow model                              Yield curves
                                                                                                     NCD curves
Other debt securities                        Discounted cash flow model                              Yield curves and NCD curves, external prices, broker
                                                                                                     quotes
Derivative financial instruments             Discounted cash flow model, Hermite interpolation,      Yield curves, risk free rate, volatilities, forex forward
                                             industry standard derivative pricing models including   points and spot rates, interest rate swap curves and
                                             Black-Scholes                                           credit curves
Securities arising from trading activities                                                           Interest rate curves, implied bond spreads, equity
                                             Standard industry derivative pricing model              volatilities
                                             Adjusted quoted price                                   Liquidity adjustments
Investment portfolio                         Discounted cash flow model, relative valuation model    Discount rate and fund unit price, net assets
                                             Comparable quoted inputs
Loans and advances to customers              Discounted cash flow model                              Yield curves
Liabilities
Derivative financial instruments             Discounted cash flow model, Hermite interpolation,      Yield curves, risk-free rate, volatilities, forex forward
                                             industry standard derivative pricing models including   points and spot rates, interest rate swap curves and
                                             Black-Scholes                                           credit curves
Other trading liabilities                    Discounted cash flow model                              Yield curves
Repurchase agreements and cash               Discounted cash flow model, Hermite interpolation       Yield curves
collateral on securities lent
Customer accounts (deposits)                 Discounted cash flow model                              Yield curves
Debt securities in issue                     Discounted cash flow model                              Yield curves
Other liabilities                            Discounted cash flow model                              Yield curves
                                                                                                                                 Net level 3
For the six months to 30 September 2018                                                                                            financial
GBP'000                                                                                                                          instruments

The following table is a reconciliation of the opening balances to 
the closing balances for fair value measurements in level 3
of the fair value hierarchy:
Balance as at 31 March 2018                                                                                                          776 176
Adoption of IFRS 9                                                                                                                 1 341 810
Balance as at 1 April 2018                                                                                                         2 117 986
Total gains or losses                                                                                                                 73 464
  In the income statement                                                                                                             73 206
  In the statement of comprehensive income                                                                                               258
Purchases                                                                                                                            800 061
Sales                                                                                                                              (348 240)
Issues                                                                                                                                16 616
Settlements                                                                                                                        (391 874)
Transfers into level 3                                                                                                                12 123
Foreign exchange adjustments                                                                                                          45 172
Balance as at 30 September 2018                                                                                                    2 325 308

For the period ended 30 September 2018, GBP12.1 million has been transferred out of level 2 into level 3 as a result of the inputs to the 
valuation method becoming unobservable in the market.

For the six months to 30 September 2018
GBP'000                                                                                                       Total   Realised    Unrealised

Total gains/(losses) included in the income statement for the period
Net interest income                                                                                          51 731     40 662        11 069
Fee and commission income                                                                                     9 600     11 512       (1 912)
Investment income                                                                                             7 071      1 334         5 737
Trading income arising from customer flow                                                                     4 804      3 734         1 070
                                                                                                             73 206     57 242        15 964
Total gains/(losses) included in other comprehensive income for the period
Gains on realisation on debt instruments at FVOCI recycled through the income statement                      19 757     19 757             -
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive
income                                                                                                          258          -           258
                                                                                                             20 015     19 757           258

Sensitivity of fair values to reasonably possible alternative assumptions by level 3 instrument type

The fair value of financial instruments in level 3 are measured using valuation techniques that incorporate assumptions that are not evidenced by 
prices from observable market data. The following table shows the sensitivity of these fair values to reasonably possible alternative assumptions, 
determined at a transactional level:
                                                  Balance
                                                    sheet    Significant                             Range of           Favourable     Unfavourable
                                                    value    unobservable                            unobservable          changes          changes
                                                 GBP'000     input                                   input used            GBP'000          GBP'000
30 September 2018
Assets
Other debt securities                              92 234    Potential impact on income statement                            7 975          (7 887)
                                                             Cash flow adjustments                   CPR 8.6%                    -             (68)
                                                             Credit spreads                          5.1%                      140            (136)
                                                             EBITDA                                  (5%)/5%                   348            (348)
                                                             Other^                                  ^                       7 487          (7 335)

Derivative financial instruments                   37 993    Potential impact on income statement                            6 964          (9 205)
                                                             Volatilities                            4.0% - 9.0%               212            (212)
                                                             Cash flow adjustments                   CPR 7.6% - 11.2%          110            (101)
                                                             Underlying asset value                                          5 684          (8 029)
                                                             EBIDTA                                  (5%)/20%                  128             (32)
                                                             Other^                                  ^                         830            (831)

Investment portfolio                              736 803    Potential impact on income statement                          122 097        (124 731)
                                                             Price earnings multiple                 4.0 x - 10.3 x          6 117          (5 828)
                                                             WACC                                    20.0%                  29 594         (35 004)
                                                             Underlying asset value                                          9 472          (3 029)
                                                             EBITDA                                  ^^                     23 602         (19 226)
                                                             Cash flow adjustments                   (15%)/25%               3 151          (2 638)
                                                             Precious and industrial metals prices   (10%)/6%                1 139          (1 898)
                                                             Property values                         (5%)/5%                 9 339          (9 339)
                                                             Other^                                  ^                      39 683         (47 769)

Loans and advances to customers                 1 473 670    Potential impact on income statement                           41 750         (54 993)
                                                             Credit spreads                          0.2% - 29.0%            4 202          (6 048)
                                                             Cash flow adjustments                   (15%)/5%                1 637          (4 910)
                                                             Underlying asset value                                          2 130          (1 715)
                                                             Other^                                  ^                      33 781         (42 320)
                                                             Potential impact on other
                                                             comprehensive income
                                                             Credit spreads                          0.1% - 5.1%             1 135          (1 615)

Other securitised assets*                         125 814    Potential impact on income statement
                                                             Cash flow adjustments                   CPR 7.7%                  723            (728)

Total level 3 assets                            2 466 514                                                                  180 644        (199 159)

Liabilities
Derivative financial instruments                   20 045    Potential impact on income statement                           (9 085)          7 268
                                                             Cash flow adjustments                   CPR 7.6% - 11.2%          (81)             89
                                                             Volatilities                            8.5%                       (2)              2
                                                             Underlying asset value                                         (9 002)          7 177
                                                                                                                           
Liabilities arising on securitisation of other     121 161   Potential impact on income statement
assets*                                                      Cash flow adjustments                   CPR 8.0%                 (244)            205

Total level 3 liabilities                          141 206                                                                  (9 329)          7 473
Net level 3 assets                               2 325 308

* The sensitivity of the fair value of liabilities arising on securitisation of other assets has been considered together with other securitised assets.
^ Other - The valuation sensitivity has been assessed by adjusting various inputs such as expected cash flows, discount rates, earnings multiples 
  rather than a single input. It is deemed appropriate to reflect the outcome on a portfolio basis for the purposes of this analysis as the sensitivity 
  of the assets cannot be determined through the adjustment of a single input.
^^ The EBITDA has been stressed on an investment by investment basis to obtain a favourable and unfavourable valuation.
   Underlying asset values calculated by reference to a tangible asset, for example property, aircraft or shares.

In determining the value of level 3 financial instruments, the following are the
principal inputs that do require judgement:

Credit spreads
Credit spreads reflect the additional yield that a market participant would
demand for taking exposure to the credit risk of an instrument. The credit
spread for an instrument forms part of the yield used in a discounted cash
flow calculation. In general a significant increase in a credit spread in isolation
will result in a movement in fair value that is unfavourable for the holder of a
financial instrument.

Discount rates (including WACC)
Discount rates are used to adjust for the time value of money when using a
discounted cash flow valuation method. Where relevant, the discount rate
also accounts for illiquidity, market conditions and uncertainty for future cash
flows.

Volatilities
Volatility is a key input in the valuation of derivative products containing
optionality. Volatility is a measure of the variability or uncertainty in returns
for a given derivative underlying. It represents an estimate of how much a
particular underlying instrument, parameter or index will change in value
over time.

Cash flows
Cash flows relate to the future cash flows which can be expected from the
instrument and requires judgement.

EBITDA
The group's earnings before interest, taxes, depreciation and amortisation.
This is the main input into a price earnings multiple valuation method.

Price earnings multiple
The price-to-earnings ratio is an equity valuation multiple. It is a key driver in
the valuation of unlisted investments.

Precious and industrial metals and property value
The price of precious and industrial metals and property value is a key driver
of future cash flows on certain investments.

Underlying asset value
In instances where cash flows have links to referenced assets, the underlying
asset value is used to determine the fair value. The underlying asset valuation
is derived using observable market prices sourced from broker quotes,
specialist valuers or other reliable pricing sources.

Fair value of financial assets and liabilities at amortised cost
The following table sets out the fair value of financial instruments held at amortised cost 
where the carrying value is not a reasonable approximation of fair value.

At 30 September 2018                                                         Carrying         Fair
GBP'000                                                                        amount        value

Assets
Loans and advances to banks                                                 2 194 184    2 194 749
Reverse repurchase agreements and cash collateral on securities borrowed    1 113 501    1 113 413
Sovereign debt securities                                                     283 145      274 120
Bank debt securities                                                          335 497      334 171
Other debt securities                                                         411 216      406 266
Loans and advances to customers                                            21 295 882   21 275 003
Other loans and advances                                                      207 251      240 619
Other assets                                                                1 160 686    1 159 535
Liabilities
Deposits by banks                                                           3 011 094    3 039 929
Repurchase agreements and cash collateral on securities lent                  313 084      309 554
Customer accounts (deposits)                                               28 047 974   28 035 101
Debt securities in issue                                                    2 344 030    2 372 763
Other liabilities                                                           1 167 966    1 169 085
Subordinated liabilities                                                    1 211 898    1 282 250

Investec Limited
Incorporated in the Republic of South Africa
Registration number: 1925/002833/06
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949

Ordinary share dividend announcement

Declaration of dividend number 126

Notice is hereby given an interim dividend number 126, being a gross
dividend of 206 cents (2017: 200 cents) per ordinary share has been
declared by the board from income reserves in respect of the six
months ended 30 September 2018 payable to shareholders recorded
in the shareholders' register of the company at the close of business on
Friday, 7 December 2018.

The relevant dates for the payment of dividend number 126 are as
follows:

Last day to trade cum-dividend                Tuesday, 4 December 2018
Shares commence trading ex-dividend         Wednesday, 5 December 2018
Record date                                    Friday, 7 December 2018
Payment date                               Wednesday, 19 December 2018

The interim gross dividend of 206 cents per ordinary share has been
determined by converting the Investec plc distribution of 11 pence per
ordinary share into Rands using the Rand/Pounds Sterling average buy/sell
forward rate at 11:00 (SA time) on Wednesday, 14 November 2018.

Share certificates may not be dematerialised or rematerialised between
Wednesday, 5 December 2018 and Friday, 7 December 2018, both
dates inclusive.

Additional information to take note of:
- Investec Limited South African tax reference number: 9800/181/71/2
- The issued ordinary share capital of Investec Limited is 318 904 709
  ordinary shares
- The dividend paid by Investec Limited is subject to South African Dividend
  Tax (Dividend Tax) of 20% (subject to any available exemptions as
  legislated)
- Shareholders who are exempt from paying the Dividend Tax will receive a
  net dividend of 206 cents per ordinary share
- Shareholders who are not exempt from paying the Dividend Tax will
  receive a net dividend of 164.8 cents per ordinary share (gross dividend
  of 206 cents per ordinary share less Dividend Tax of 41.200 cents per
  ordinary share).

By order of the board

N van Wyk
Company Secretary

14 November 2018

Investec Limited
Incorporated in the Republic of South Africa
Registration number: 1925/002833/06
JSE share Code: INPR
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000063814

Preference share dividend announcement

Non-redeemable non-cumulative non-participating preference shares
("preference shares")

Declaration of dividend number 28

Notice is hereby given that preference dividend number 28 has been
declared by the board from income reserves for the period 1 April 2018 to
30 September 2018 amounting to a gross preference dividend of 389.91534
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 December 2018.

The relevant dates for the payment of dividend number 28 are as
follows:

Last day to trade cum-dividend               Tuesday, 11 December 2018
Shares commence trading ex-dividend        Wednesday, 12 December 2018
Record date                                   Friday, 14 December 2018
Payment date                                 Tuesday, 18 December 2018

Share certificates may not be dematerialised or rematerialised between
Wednesday, 12 December 2018 and Friday, 14 December 2018, both dates
inclusive.

Additional information to take note of:
- Investec Limited South African tax reference number: 9800/181/71/2
- The issued preference share capital of Investec Limited is 32 214 499
  preference shares in this specific class
- The dividend paid by Investec Limited is subject to South African Dividend
  Tax (Dividend Tax) of 20% (subject to any available exemptions as
  legislated)
- The net dividend amounts to 311.93227 cents per preference share for
  shareholders liable to pay the Dividend Tax and 389.91534 cents per
  preference share for preference shareholders exempt from paying the
  Dividend Tax.

By order of the board

N van Wyk
Company Secretary

14 November 2018

Investec plc
Incorporated in England and Wales
Registration number 3633621
LSE ordinary share code: INVP
JSE ordinary share code: INP
ISIN: GB00B17BBQ50

Ordinary share dividend announcement

In terms of the DLC structure, Investec plc shareholders registered on the
United Kingdom share register may receive all or part of their dividend
entitlements through dividends declared and paid by Investec plc on their
ordinary shares and/or through dividends declared and paid on the SA DAN
share issued by Investec Limited.

Investec plc shareholders registered on the South African branch register may
receive all or part of their dividend entitlements through dividends declared
and paid by Investec plc on their ordinary shares and/or through dividends
declared and paid on the SA DAS share issued by Investec Limited.

Declaration of dividend number 33
Notice is hereby given that an interim dividend number 33, being a
gross dividend of 11 pence (2017: 10.5 pence) per ordinary share has
been declared by the board from income reserves in respect of the six
months ended 30 September 2018 payable to shareholders recorded
in the shareholders' register of the company at the close of business on
Friday, 7 December 2018.

- for Investec plc shareholders, registered on the United Kingdom share
  register, through a dividend payment by Investec plc from income
  reserves of 11 pence per ordinary share
- for Investec plc shareholders, registered on the South African branch
  register, through a dividend payment by Investec plc from income
  reserves of 3 pence per ordinary share and through a dividend paid by
  Investec Limited, on the SA DAS share, payable from income reserves,
  equivalent to 8 pence per ordinary share

The relevant dates for the payment of dividend number 33 are as
follows:

Last day to trade cum-dividend
On the Johannesburg
Stock Exchange (JSE)                              Tuesday, 4 December 2018
On the London Stock Exchange (LSE)              Wednesday, 5 December 2018
Shares commence trading ex-dividend
On the Johannesburg
Stock Exchange (JSE)                            Wednesday, 5 December 2018
On the London Stock Exchange (LSE)               Thursday, 6 December 2018
Record date (on the JSE and LSE)                   Friday, 7 December 2018
Payment date (on the JSE and LSE)              Wednesday, 19 December 2018

Share certificates on the South African branch register may not be
dematerialised or rematerialised between Wednesday, 5 December 2018
and Friday, 7 December 2018, both dates inclusive, nor may transfers
between the United Kingdom share register and the South African branch
register take place between Wednesday, 5 December 2018 and Friday,
7 December 2018, both dates inclusive.

Additional information for South African resident shareholders of
Investec plc

- Shareholders registered on the South African branch register are advised
  that the distribution of 11 pence, equivalent to a gross dividend of
  206 cents per share, has been arrived at using the Rand/Pound Sterling
  average buy/sell forward rate, as determined at 11:00 (SA time) on
  Wednesday, 14 November 2018
- Investec plc United Kingdom tax reference number: 2683967322360
- The issued ordinary share capital of Investec plc is 681 051 512 ordinary
  shares
- The dividend paid by Investec plc to South African resident shareholders
  registered on the South African branch register and the dividend paid by
  Investec Limited to Investec plc shareholders on the SA DAS share are
  subject to South African Dividend Tax (Dividend Tax) of 20% (subject to
  any available exemptions as legislated)
- Shareholders registered on the South African branch register who are
  exempt from paying the Dividend Tax will receive a net dividend of
  206 cents per share, comprising 149.81818 cents per share paid by
  Investec Limited on the SA DAS share and 56.18182 cents per ordinary
  share paid by Investec plc
- Shareholders registered on the South African branch register who are
  not exempt from paying the Dividend Tax will receive a net dividend
  of 164.8 cents per share (gross dividend of 206 cents per share less
  Dividend Tax of 41.2 cents per share) comprising 119.85455 cents per
  share paid by Investec Limited on the SA DAS share and 44.94545 cents
  per ordinary share paid by Investec plc.

By order of the board

D Miller
Company Secretary

14 November 2018

Investec plc
Incorporated in England and Wales
Registration number: 3633621
Share code: INPP
ISIN: GB00B19RX541

Preference share dividend announcement

Non-redeemable non-cumulative non-participating preference shares
("preference shares")

Declaration of dividend number 25

Notice is hereby given that preference dividend number 25 has been
declared by the board from income reserves for the period 1 April 2018 to
30 September 2018 amounting to a gross preference dividend of 7.93150
pence per preference 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, 7 December 2018.

For shares trading on the Johannesburg Stock Exchange (JSE), the dividend
of 7.93150 pence per preference share is equivalent to a gross dividend of
148.73149 cents per share, which has been determined using the Rand/
Pound Sterling average buy/sell forward rate as at 11:00 (SA Time) on
Wednesday, 14 November 2018.

The relevant dates relating to the payment of dividend number 25 are
as follows:

Last day to trade cum-dividend
On the Johannesburg
Stock Exchange (JSE)                            Tuesday, 4 December 2018
On The International
Stock Exchange (TISE)                         Wednesday, 5 December 2018

Shares commence trading ex-dividend
On the Johannesburg
Stock Exchange (JSE)                          Wednesday, 5 December 2018
On The International
Stock Exchange (TISE)                          Thursday, 6 December 2018

Record date (on the JSE and TISE)                Friday, 7 December 2018

Payment date (on the JSE and TISE)             Tuesday, 18 December 2018

Share certificates may not be dematerialised or rematerialised between
Wednesday, 5 December 2018 and Friday, 7 December 2018, both dates
inclusive, nor may transfers between the United Kingdom share register
and the South African branch register take place between Wednesday,
5 December 2018 and Friday, 7 December 2018, both dates inclusive.

Additional information for South African resident shareholders of
Investec plc

- Investec plc United Kingdom tax reference number: 2683967322360
- The issued preference share capital of Investec plc is 2 754 587
  preference shares
- The dividend paid by Investec plc to shareholders recorded on the
  South African branch register is subject to South African Dividend Tax
  (Dividend Tax) of 20% (subject to any available exemptions as legislated)
- The net dividend amounts to 118.98519 cents per preference
  share for preference shareholders liable to pay the Dividend Tax and
  148.73149 cents per preference share for preference shareholders
  exempt from paying the Dividend Tax.

By order of the board

D Miller
Company Secretary

14 November 2018

Investec plc
Incorporated in England and Wales
Registration number: 3633621
JSE share code: INPPR
ISIN: GB00B4B0Q974

Rand-denominated preference share dividend announcement

Rand-denominated non-redeemable non-cumulative non-
participating perpetual preference shares ("preference shares")

Declaration of dividend number 15

Notice is hereby given that preference dividend number 15 has been
declared by the board from income reserves for the period 1 April 2018 to
30 September 2018 amounting to a gross preference dividend of 476.30137
cents per preference share payable to holders of the Rand-denominated non-
redeemable non-cumulative non-participating perpetual preference shares as
recorded in the books of the company at the close of business on Friday, 7
December 2018.

The relevant dates relating to the payment of dividend number 15 are
as follows:
Last day to trade cum-dividend                 Tuesday, 4 December 2018
Shares commence trading ex-dividend          Wednesday, 5 November 2018
Record date                                     Friday, 7 December 2018
Payment date                                  Tuesday, 18 December 2018

Share certificates may not be dematerialised or rematerialised between
Wednesday, 5 December 2018 and Friday, 7 December 2018, both dates
inclusive.

Additional information for South African resident shareholders of
Investec plc

- Investec plc United Kingdom tax reference number: 2683967322360
- The issued rand denominated preference share capital of Investec plc is
  131 447 preference shares
- The dividend paid by Investec plc to shareholders recorded on the South
  African branch register is subject to South African Dividend Tax (Dividend
  Tax) of 20% (subject to any available exemptions as legislated)
- The net dividend amounts to 381.04110 cents per preference
  share for preference shareholders liable to pay the Dividend Tax and
  476.30137 cents per preference share for preference shareholders
  exempt from paying the Dividend Tax.

By order of the board

D Miller
Company Secretary

14 November 2018

Investec plc
Incorporated in England and Wales
(Registration number 3633621)
JSE ordinary share code: INP
LSE ordinary share code: INVP
ISIN: GB00B17BBQ50

Registered office:
30 Gresham Street, London
EC2V 7QP, United Kingdom

Transfer secretaries:
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196

Company Secretary:
D Miller

Investec Limited
Incorporated in the Republic of South Africa
(Registration number 1925/002833/06)
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949

Registered office:
100 Grayston Drive
Sandown, Sandton, 2196

Transfer secretaries:
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196

Company Secretary:
N van Wyk

Directors:
PKO Crosthwaite* (Chairman),
HJ du Toit## (Joint Chief Executive Officer)
F Titi## (Joint Chief Executive Officer)
ZBM Bassa, LC Bowden*, GR Burger##,
CA Carolus, D Friedland, PA Hourquebie,
CR Jacobs^, B Kantor##, IR Kantor^^, S Koseff##,
Lord Malloch-Brown KCMG*, KM McFarland##
KL Shuenyane
## Executive  *British   ^^ Dutch ^Irish

Sponsor:
Investec Bank Limited

Date: 15/11/2018 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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