INLP - Investec Bank - Reviewed Interim Condensed Consolidated Financial Results
Thu, 13 Nov 2008
JSE INLP
INLP
INLP - Investec Bank - Reviewed Interim Condensed Consolidated Financial Results
For The Six Months To 30 September 2008 and dividend declaration
Investec Bank Limited
(Registration number 1969/004763/06)
Share Code: INLP & ISIN: ZAE000048393
Reviewed interim condensed consolidated financial results for the six months to
30 September 2008 and dividend declaration
Consolidated income statement
Reviewed Reviewed Audited
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
R` million
2008 2007 2008
Interest income 10,498 6,930 15,731
Interest expense (8,416) (5,342) (12,216)
Net interest income 2,082 1,588 3,515
Fee and commission income 486 463 1,084
Fee and commission expense (22) (10) (30)
Principal transactions 854 412 1,202
Operating (loss)/income (27) 15 (1)
from associates
Other income 1,291 880 2,255
Total operating income 3,373 2,468 5,770
Impairment losses on loans (178) (3) (466)
and advances
Operating income 3,195 2,465 5,304
Administrative expenses (1,445) (1,280) (2,713)
Depreciation and (35) (32) (69)
amortisation of property,
equipment and software
Operating profit 1,715 1,153 2,522
Loss on disposal of group - - (38)
operations*
Profit before taxation 1,715 1,153 2,484
Taxation (410) (311) (686)
Profit after taxation 1,305 842 1,798
* The group disposed of its
investment in Investec
Holdings (Botswana) Limited
during the prior year to
Investec Asset Management
Holdings (Pty) Ltd on an
arms length basis.
Headline earnings
Earnings attributable to 1,305 842 1,798
shareholders
Preference dividends paid (80) (69) (142)
Earnings attributable to 1,225 773 1,656
ordinary shareholders
Headline
adjustments: - - 38
Loss on disposal of group - - 38
operations
Headline earnings 1,225 773 1,694
attributable to ordinary
shareholders
Consolidated balance sheet at
Reviewed Audited Reviewed
30 Sept. 31 March 30 Sept.
R` million 2008 2008 2007
Assets
Cash and balances at central banks 3,103 2,811 2,015
Loans and advances to banks 14,944 14,418 13,376
Cash equivalent advances to 6,972 7,782 9,259
customers
Reverse repurchase agreements and 8,223 5,752 4,307
cash collateral on securities
borrowed
Trading securities 18,021 17,913 13,969
Derivative financial instruments 7,771 9,668 6,853
Investment securities 478 350 2
Loans and advances to customers 105,535 95,021 79,083
Securitised assets 5,675 6,275 12,170
Interest in associated 167 195 250
undertakings
Deferred taxation
assets 290 285 273
Other assets 1,037 1,056 1,332
Property and equipment 178 144 105
Investment properties 5 5 3
Intangible assets 73 75 72
Loans to group companies 5,717 5,812 10,783
178,189 167,562 153,852
Liabilities
Deposits by banks 9,332 9,427 9,052
Derivative financial instruments 7,673 10,152 6,951
Other trading liabilities 805 266 334
Repurchase agreements and cash 6,306 1,533 3,021
collateral on securities lent
Customer accounts 122,162 115,654 102,309
Debt securities in issue 3,201 2,524 1,303
Liabilities arising on 5,185 5,637 12,140
securitisation
Current taxation liabilities 733 697 456
Deferred taxation liabilities 490 323 351
Other liabilities 3,515 3,679 4,086
159,402 149,892 140,003
Subordinated liabilities 5,091 4,710 3,025
(including convertible debt)
164,493 154,602 143,028
Equity
Ordinary share capital
21 19 16
Share premium 7,066 6,786 4,732
Equity portion of convertible - 22 229
debentures
Perpetual preference shares 1,491 1,491 1,491
Other reserves 152 911 824
Retained income 4,961 3,731 3,532
Shareholders` equity excluding 13,691 12,960 10,824
minority interests
Minority interests 5 - -
Total equity 13,696 12,960 10,824
Total liabilities and equity 178,189 167,562 153,852
Condensed statement of changes in equity
Reviewed Audited Reviewed
6 months to Year to 6 months to
30 Sept. 31 March 30 Sept.
R` million 2008 2008 2007
Balance at the beginning of 12,960 10,056 10,056
the period
Foreign currency - 1 (5)
adjustments
Profit after taxation 1,305 1,798 842
Dividends paid to ordinary (500) (650) -
shareholders
Dividends paid to perpetual (80) (142) (69)
preference shareholders
Fair value gain on 6 47 -
available for sale assets
Increase in minorities 5 - -
interests on acquisition
Issue of shares - 1,850 -
Balance at the end of the 13,696 12,960 10,824
period
Condensed consolidated cash flow statement
Reviewed Audited Reviewed
6 months Year 6 months
to to to
30 Sept. 31 March 30 Sept.
R`
million 2008 2008 2007
Net cash inflow from operating 1,724 2,792 958
activities
Net cash (outflow)/inflow from (838) (3,017) 3,447
banking activities
Net cash outflow from investing (67) (99) (58)
activities
Net cash (outflow)/inflow from (180) 2,678 (1,035)
financing activities
Net increase in cash and cash 639 2,354 3,312
equivalents
Cash and cash equivalents at the 10,314 7,960 7,960
beginning of the period
Cash and cash equivalents at the 10,953 10,314 11,272
end of the period
Cash and cash equivalents is defined as including: cash and balances at central
banks, on demand loans and advances to banks and cash equivalent advances to
customers (all of which have a maturity profile of less than three months).
Segmental information
For the 6 months to 30 September 2008
Group
Private Capital Investment Services
Client and
R` million Activities Markets Banking Other Total
Operating 1,004 904 695 592
3,195
income
Operating (704) (455) (146) (175) (1,480)
expenses
Operating 300 449 549 417 1,715
profit
Cost to 63.5 47.9 21.0 28.3 43.9
income ratio
(%)
For the 6 months to 30 September 2007
Group
Private Capital Investment Services
Client and
R` million
Activities Markets Banking Other Total
Operating 969 839 216 441 2,465
income
Operating (643) (388) (109) (172) (1,312)
expenses
Operating 326 451 107 269 1,153
profit
Cost to income 63.8 49.6 47.0 38.7 53.2
ratio (%)
These consolidated interim financial results are published to provide
information to holders of Investec Bank Limited`s listed non-redeemable, non-
cumulative, non-participating preference shares.
Commentary
Overview of results
We are pleased to announce that Investec Bank Limited, a subsidiary of Investec
Limited, posted an increase in headline earnings attributable to ordinary
shareholders of 58.5% from R773 million to R1,225 million. For full information
on the Investec group results, refer to the combined results of Investec plc and
Investec Limited.
Business unit review
Unless the context indicates otherwise, all comparatives referred to in the
business unit review relate to the six months ended 30 September 2007. Operating
profit is before taxation and headline adjustments.
Salient operational features of the period under review include:
* The Private Client Activities division posted a decrease in
operating profit
of 8.0% to R300 million (2007: R326 million). Higher average advances and a
diversified set of revenues supported a 10.0% increase in operating income,
however, impairment losses on loans and advances have increased as a result of
the weaker credit environment. The private client core lending book grew by 8.3%
to R79,7 billion (31 March 2008: R73,6 billion) and the division increased its
retail deposit book by 11.0% to R39,8 billion (31 March 2008: R35,9 billion).
Funds under advice decreased 4.1% to R24,8 billion (31 March 2008: R25,8
billion).
* The Capital Markets division posted operating profit in line with the prior
period of R449 million (2007: R451 million). The division`s advisory, treasury
and trading activities continued to perform well. The division`s lending book
has grown by 14.6% to R30,7 billion (31 March 2008: R26,8 billion).
*
Operating profit of the Investment Banking division increased significantly to
R549 million (2007: R107 million). The performance of the Corporate Finance
division was negatively impacted as a result of fewer transactions completed
compared to the prior year. The investments held within the Direct Investment
and Private Equity portfolios performed well.
* Other Activities contributed R417 million (2007: R269 million) largely as a
result of increased cash holdings and higher interest rates.
Accounting policies and disclosures
The interim results are prepared in accordance with the recognition and
measurement requirements 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 six
months ended 30 September
2008 are consistent with those adopted in the
financial statements for the year ended 31 March 2008.
* Reclassification to prior period balance sheet
Following the implementation of IFRS 7 disclosure requirements in the 31 March
2008 financial year, the classification of certain financial instruments into
balance sheet classes was refined to achieve more appropriate disclosure. The
adjustments to the 30 September 2007 balance sheet comprised R22,432 million,
reclassified from debt securities in issue to customer accounts, as these
balances are seen as term deposits rather than debt instruments in issue.
Compulsorily convertible debentures
The compulsorily convertible debentures that were outstanding at 31 March 2008
were converted to shares on 31 July 2008. This resulted in an increase in share
capital and share premium with no impact on total
equity.
On behalf of the Board of Investec Bank Limited
Fani Titi Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
R M W Dunne was appointed to the board of directors with effect from 02 June
2008
13 November 2008
Audit Opinion
KPMG Inc and Ernst & Young Inc., the company`s independent auditors, have
reviewed the condensed consolidated interim financial statements contained in
this interim report and have expressed an unmodified conclusion on the condensed
consolidated interim financial statements. Their review report is available
inspection at the company`s registered office.
Non-redeemable non-cumulative non-participating preference shares
Declaration of dividend number 11
Notice is hereby given that preference dividend number 11 has been declared for
the period 01 April 2008 to 30 September 2008 amounting to 574,32 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, 28 November 2008.
The relevant dates for the payment of dividend number 11 are as follows:
Last day to trade cum-dividend Friday, 21 November 2008
Shares commence trading ex-dividend Monday, 24 November 2008
Record date Friday, 28 November 2008
Payment date Tuesday, 09 December 2008
Share certificates may
not be dematerialised or rematerialised between Monday,
24 November 2008 and Friday, 28 November 2008, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
13 November 2008
Directors: F Titi (Chairman), D M Lawrence* (Deputy Chairman), S Koseff* (Chief
Executive), B Kantor* (Managing Director), S E Abrahams, G R Burger*, R M W
Dunne, M P Malungani, K X T Socikwa, B Tapnack*, P R S Thomas, C B Tshili.
*Executive
Company Secretary: B Coetsee
Registered office
100 Grayston Drive
Sandown
Sandton
2196
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg 2001
Date: 13/11/2008 09:01:01 Produced by the JSE SENS Department.
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