Investec Regulatory News (INVP)

Investec (comprising Investec plc and Investec Limited) - Unaudited combined consolidated financial results for the year ended 31 March 2024

Fani Titi, Group Chief Executive commented:

"The Group has delivered strong financial performance notwithstanding the uncertain operating environment that prevailed throughout the financial year. This performance demonstrates the continued success in our client acquisition strategies which underpinned the increased client activity and loan book growth, supported by the tailwind from the high interest rate environment. This performance underwrites our commitment to create enduring worth for all our stakeholders through our market-leading client franchises in our chosen markets. Our balance sheet remains strong and highly liquid, positioning us well to support our clients in navigating the uncertain macroeconomic backdrop.

Today we announce new medium-term targets, resulting from the structural improvement in Group performance following the execution of the strategy announced at the February 2019 Capital Markets Day (CMD)."

Basis of presentation

The average Rand/Pound Sterling exchange rate depreciated by 15.1% in the FY2024 relative to FY2023, resulting in a significant difference between reported and neutral currency performance. The comparability of the Group's total year on year performance is impacted by the financial effects of previously announced strategic actions, some of which result in the Group performance being presented on a continuing and discontinued basis in line with applicable accounting standards.

Significant strategic actions include:

• Combination of Investec Wealth & Investment UK (IW&I UK) with the Rathbones Group, reflected as a discontinued operation in line with applicable accounting standards, notwithstanding the strategic shareholding in Rathbones. Following the successful completion of the combination in September 2023, the investment in Rathbones has been equity accounted for as an associate

• Completion of approximately R6.8 billion or c.£300 million share buy-back and share repurchase programme, in line with the Group's strategy to optimise capital in South Africa

• Disposal of the property management companies to Burstone Group Limited (formerly known as Investec Property Fund (IPF)) and consequent deconsolidation of IPF and reflection of IPF as a discontinued operation. From July 2023, Burstone is accounted for at fair value through profit and loss

• The restructure of Bud Group Holdings (formerly known as IEP) in the prior year to facilitate Investec's orderly exit

• The distribution of a 15% shareholding in Ninety One in the prior year.

Key financial metrics

Given the nature of the IW&I UK and IPF transactions, the Group's economic interest remained similar before and after the transactions. To provide information that will be more comparable to the future presentation of returns from the Group's interest in these entities and given their new holding structures, pro-forma information has been prepared as if the transactions had been in effect from the beginning of the period, i.e. IW&I UK has been presented as an equity accounted investment and IPF as an investment at fair value through profit or loss.

Totals and variances are presented in £'000 which may result in rounding differences.

Group financial summary:

Revenue growth was underpinned by the strong performance from the corporate client franchises in both geographies and Investec Wealth & Investment in South Africa. Net interest income (NII) benefitted from growth in average lending books and higher average interest rates. Non-interest revenue (NIR) growth reflects the diversified nature of the Group's revenue streams. NIR growth was underpinned by continued client acquisition, increased client activity levels and higher trading income. NIR also benefitted from the first-time consolidation of Capitalmind as the Group seeks to extend its footprint into Continental Europe and increase the proportion of capital-light revenues. Revenue growth was negatively impacted by the effect of strategic actions, comprising the cessation of equity accounting of Ninety One post distribution and Bud Group Holdings following the restructure in 2022, forgone interest income on funds utilised to execute the share buy-back programme and the deconsolidation of IPF.

The cost to income ratio improved to 53.8% (FY2023: 54.7%), in line with our guidance of less than 55% as revenue grew ahead of costs. Total operating costs increased by 3.2%, including the provision of £30 million for the potential financial impact of the recently announced industry-wide Financial Conduct Authority (FCA) review into historical motor finance commission arrangements and sales in the UK. Fixed operating expenditure excluding the motor finance provision remained flat, benefitting from a weaker average Rand/Pound Sterling exchange rate which offset cost increases from inflationary pressures and continued investment in people and technology. Variable remuneration increased in line with business performance.

Pre-provision adjusted operating profit increased 7.1% to £963.6 million (FY2023: £899.6 million), supported by the strength and diversity of our client franchises as well as continued success in the Group's strategic execution.

Credit loss ratio (CLR) on core loans was 28bps (FY2023: 23bps), at the bottom end of the Group's through-the-cycle (TTC) range of 25bps to 35bps. Expected credit loss (ECL) impairment charges decreased to £79.1 million (FY2023: £80.9 million). Asset quality remained solid with exposures well covered by collateral.

Return on equity (ROE) of 14.6% (FY2023: 13.7%) is above the midpoint of the Group's 12% to 16% target range, despite the increase in the closing equity base resulting from the net gain recognised on completion of the combination of IW&I UK with Rathbones. Return on tangible equity (ROTE) was 16.5% (FY2023: 14.7%).

Net asset value (NAV) per share increased to 563.9p (31 March 2023: 507.3p), reflecting the strong earnings generation in the current year and the net gain recognised on completion of the IW&I UK combination with Rathbones.

Tangible net asset value (TNAV) per share was 477.5p, increasing from 471.6p at 31 March 2023. TNAV reflects our decision to adjust the carrying value of our strategic investment in the Rathbones Group to reflect our proportionate share of tangible equity in Rathbones, resulting in an intangible net asset value of c.77p per share.

Key drivers

Net core loans increased 1.7% to £30.9 billion (31 March 2023: £30.4 billion) and grew by 6.1% on a neutral currency basis; primarily driven by corporate lending in both core geographies and private client lending in South Africa.

Customer deposits remained constant at £39.6 billion (31 March 2023: £39.6 billion), neutral currency growth was 4.4%, driven by strong growth in non-wholesale and retail deposits in both geographies.

Funds under management (FUM) in Southern Africa increased by 5.5% to £20.9 billion (31 March 2023: £19.8 billion), driven by discretionary net inflows of R16.6 billion, market levels and FX translation gains on dollar denominated portfolios and partly offset by non-discretionary net outflows of R6.8 billion.

Investec Wealth & Investment UK FUM is now reported as part of the Rathbones Group following the completion of the combination in September 2023. Rathbones Funds Under Management and Administration (FUMA) totalled £107.6 billion at 31 March 2024. Investec owns 41.25% of Rathbones.

Balance sheet strength and strategic execution:

The Group maintained strong capital levels in both our anchor geographies, with Investec Limited reporting a CET1 ratio of 13.6% measured on the Advanced Internal Ratings-Based approach and the Investec plc CET1 at 12.4% measured on a standardised approach. Our capital generation is strong and gives us the ability to continue to support our clients, invest in the business, and make distributions to our shareholders. Liquidity levels remained strong and well-ahead of board-approved minimums.

The Group completed the all-share combination of IW&I UK with Rathbones plc, creating the UK's leading discretionary wealth manager and reaffirmed the Group's commitment to the strategically attractive UK wealth management sector.

The Group is committed to its strategic priority to optimise shareholder returns. The optimisation of the South African capital base is substantially complete, we are at the early stages in the journey to migrate the UK capital measurement from a standardised to the internal ratings-based approach. Bud Group Holdings announced the proposed disposal of Assupol to Sanlam. Assupol is a significant asset within the group of assets earmarked to facilitate Investec's and other shareholders' exit from Bud Group Holdings

The Board has proposed a final dividend of 19.0p per share (FY2023: 17.5p), resulting in a total dividend of 34.5p per share for the year (FY2023: 31.0p), translating to a 44.2% payout ratio and within the Group's current 30% to 50% payout policy.

Medium-term targets - financial year ending March 2027

The Rathbones combination resulted in a reduction of c.100 bps in ROE given the closing equity base adjustment from the transaction which technically adjusted the current ROE target range of 12%-16% to 11%-15%.

Strategic execution over the last five years has resulted in a structural improvement in the Group performance, leading us to revise our post Rathbones combination ROE targets by 200bps. The Group's commitment to generating returns above its cost of capital underwrites our purpose to create enduring worth for all our stakeholders.

Group revised medium-term targets

Group ROE of 13% - 17% and ROTE of 14% - 18%, with the following geographic targets:

• Southern Africa targets ROE/ROTE of 16% - 20%, reflecting the strong returns generated by our client franchises and the optimisation of the SA capital base since the 2019 CMD

• UK & Other targets ROTE of 13% - 17% and ROE of 10%-14%, reflecting the increasing scale and relevance of our unique corporate mid-market position within the UK and other markets we operate in.

Cost to income ratio less than 57%, we continue to invest in the business to achieve operational efficiencies and pursue identified growth initiatives. The deconsolidation of IW&I UK and the equity accounting for the investment in Rathbones resulted in a 400bps technical reduction in cost to income ratio. Southern Africa targets a cost to income ratio of less than 55%, while UK & Other targets a cost to income ratio of less than 58%.

Through-the-cycle (TTC) range for credit loss ratio of 25bps-35bps has been revised to 25bps-45bps, reflecting the mix of our books. For Southern Africa, the new TTC range is 15bps-35bps, reflecting our exposures' bias to high-net-worth and high-income private clients, large corporates and secured lending books; and 35bps-55bps for UK & Other which reflects our distinctive mid-market positioning and secured lending portfolios.

Dividend payout policy revised to 35% to 50% of adjusted earnings per share.

FY2025 Outlook

Revenue momentum is expected to continue, underpinned by book growth, stronger client activity levels and success in our client acquisition strategies; partly offset by expected cuts in interest rates.

The Group currently expects:

• Group ROE to be c.14% and ROTE to be c.16%. Southern Africa is expected to report ROE of c.18.5%, and UK & Other is expected to report ROTE of c.14%

• Overall costs to be well managed in the context of inflationary pressures and continued investment in the business, with cost to income ratio expected to be c.54.0%

• The credit loss ratio to be within the through-the-cycle range of 25bps to 45bps. Southern Africa is expected to be close to the lower end of the TTC range of 15bps to 35bps. UK & Other credit loss ratio is expected to remain elevated between 50bps and 60bps in the short-term.

The Group remains well positioned to continue to support its clients amidst the uncertain macro-economic outlook. We have strong capital and liquidity levels to navigate the current environment and pursue our identified growth initiatives in our chosen markets.

Key financial data

This announcement covers the results of Investec plc and Investec Limited (together "the Investec Group" or "Investec" or "the Group") for the year ended 31 March 2024 (FY2024). Unless stated otherwise, comparatives relate to the Group's operations for the year ended 31 March 2023 (FY2023).

Basic earnings per share includes a gain of £358.5 million on the combination of Investec Wealth & Investment UK with Rathbones plc, partly offset by the net loss on deconsolidation of IPF totalling £101.5 million.

*Operating income has been prepared on a proforma basis.

^ Restated

Totals and variances are presented in £'000 which may result in rounding differences.

^ Following the all-share combination of IW&I UK and Rathbones, IW&I UK now forms part of the Rathbones Group. As at 31 March 2024, Rathbones Group, of which Investec holds a 41.25% economic interest, had funds under management of £107.6 billion.

Totals and variance are presented in £'000 which may result in rounding differences.

Enquiries

Investec Investor Relations

Results: Qaqambile DwayiTel: +27 (0) 11 291 0129

General enquiries:Tel: +27 (0) 11 286 7070 or investorrelations@investec.com

Brunswick (SA PR advisers)

Tim Schultz Tel: +27 (0) 82 309 2496

Lansons (UK PR advisers)

Tom BaldockTel: +44 (0) 78 6010 1715

Presentation/conference call details

Investec will host its annual results presentation live from London and broadcast live in Johannesburg today at 10h00 (SA)/9h00 (UK) time.

Please register for the presentation at: www.investec.com/investorrelations

A live video webcast of the presentation will be available on www.investec.com

About Investec

Investec partners with private, institutional, and corporate clients, offering international banking, investments, and wealth management services in two principal markets, South Africa, and the UK, as well as certain other countries. The Group was established in 1974 and currently has 7,500+ employees.

Investec has a dual listed company structure with primary listings on the London and Johannesburg Stock Exchanges.

Johannesburg and LondonJSE Debt and Equity Sponsor: Investec Bank Limited

Group financial performance

Overview

Pre-provision adjusted operating profit increased 7.1% to £963.6 million (FY2023: £899.6 million).

Revenue increased 5.0% to £2 085.2 million (FY2023: £1 986.3 million) and up 11.6% in neutral currency

Net interest income increased 5.6% to £1 338.7 million (FY2023: £1 267.3 million) driven by higher average interest earning assets and higher global interest rates.

Non-interest revenue increased 3.8% to £746.6 million (FY2023: £719.0 million)

• Net fee and commission income increased 4.7% to £416.2 million (FY2023: £397.4 million) or increased by 15.0% in neutral currency. This growth was driven by higher fees from plc advisory and increase in M&A advisory fees with the consolidation of Capitalmind and higher average discretionary FUM from the SA wealth business as well as moderate growth from the SA specialist bank given the challenging macro backdrop

• Investment income of £63.4 million (FY2023: £29.4 million) reflects dividends received and realised gains on disposal of investments, partly offset by fair value adjustments on investment portfolios

• Share of post-taxation profit of associates and joint venture holdings decreased to £91.8 million (FY2023: £104.6 million), largely driven by:

◦ Cessation of equity accounting following the distribution of Ninety One in May 2022

◦ Cessation of equity accounting for IEP following a restructure in November 2022

◦ Lower share of earnings from the wealth and investment business in the UK, comprising IW&I UK in the first half and our share of earnings from Rathbones in the second half partly offset by

◦ Higher share of associate earnings within the UK specialist bank

• Trading income arising from customer flow decreased by 22.1% to £131.7 million from (FY2023: £169.1 million), driven by lower trading income in South Africa due to reduced liquidity levels in the bond market given some foreign divestment, which was partly offset by increased client flows in the UK Treasury Risk Solutions and Equity Capital Markets (ECM) activities, and positive risk management gains in hedging the remaining financial products run down book in the UK

• Net trading gains arising from balance sheet management and other trading activities of £41.5 million compared to £14.2 million in the prior period. These gains are as a result of unwinding certain existing interest rate swap hedges when initiating the implementation of the structural interest rate hedging programme in the UK; and gains arising from MTM movements in the value of interest rate hedges on the balance sheet in South Africa.

Expected credit loss (ECL) impairment charges decreased 2.1% to £79.1 million (FY2023: £80.8 million) resulting in a credit loss ratio on core loans of 28bps (FY2023: 23bps)

Asset quality remains within Group appetite limits, with exposures to a carefully defined target market well covered by collateral. The decrease in the ECL impairment charges was primarily driven by net recoveries from previously written off exposures in South Africa, in-model ECL release due to updated macroeconomic scenarios and model recalibration, as well as release of overlays as anticipated ECLs have occurred. This was partially offset by higher specific impairments on exposures that migrated into stage 3.

Operating costs increased 3.2% to £1 120.2 million (FY2023: £1086.0 million) and 9.8% in neutral currency

The cost to income ratio improved to 53.8% from 54.7% in FY2023. Fixed operating expenditure increased by 4.0%. This includes a £30 million provision for the industry-wide FCA motor finance review. Excluding this provision, fixed operating expenditure remained flat.

Fixed operating costs increased by 10.6% in neutral currency due to inflationary pressures and continued investment in technology and people. Higher expenses primarily on personnel was due to annual salary increases and growth in headcount as well as higher business expenses given increased business activity and higher regulatory costs. Variable remuneration growth is in line with business performance.

Taxation

The taxation charge on adjusted operating profit was £172.1 million (FY2023: £163.5 million), resulting in an effective tax rate of 21.8% (FY2023: 22.9%).

Investec plc effective tax rate is 23.7% (FY2023: 20.3%), reflecting the weighted effective tax rate from multiple jurisdictions where Investec plc has operations.

SA's effective tax rate is 20.1% (FY2023: 24.7%).

Funding and liquidity

Customer deposits remained flat at £39.6 billion (31 March 2023: £39.6 billion) and increased by 4.4% in neutral currency. Customer deposits increased by 8.7% to £20.8 billion for Investec plc and increased by 0.4% to R450.4 billion for Investec Limited since March 2023.

Cash and near cash of £16.4 billion (£9.7 billion in Investec plc and R160.7 billion in Investec Limited) at 31 March 2024 represent approximately 41.3% of customer deposits (46.4% for Investec plc and 35.7% for Investec Limited). Loans and advances to customers as a percentage of customer deposits was 74.9% (FY2023: 71.2%) for Investec Limited and 79.7% (FY2023: 81.4%) for Investec plc.

The Group comfortably exceeds Board-approved internal targets and Basel liquidity requirements for the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)

• Investec Bank Limited (consolidated Group) reported LCR of 159% and an NSFR of 115% at 31 March 2024

• Investec plc reported a LCR of 453% and a NSFR of 146% at 31 March 2024.

Capital adequacy and leverage ratios

Capital and leverage ratios remain sound, ahead of regulatory requirements. The CET1 and leverage ratio were 13.6% and 6.2% for Investec Limited (Advanced Internal Ratings Based scope) and 12.4% and 10.2% for Investec plc (Standardised approach) respectively.

Segmental performance

Specialist Banking

Adjusted operating profit from Specialist Banking increased 11.5% to £810.5 million (FY2023: £727.1 million). Pre-provision adjusted operating profit increased 10.1% to £889.6 million (FY2023: £808.0 million).

Totals and variances are presented in £'000 which may result in rounding differences.

Southern Africa Specialist Banking (in Rands)

Adjusted operating profit increased 9.8% to R9 517 million (FY2023: R8 667 million), achieved in a tough and competitive operating environment. These results were driven by our continued focus on our growth initiatives and market share gains in our core client franchises. Pre-provision adjusted operating profit increased by 4.4% to R9 354 million. These results also reflect the impact of the share buy-back and the disposal of the property management companies.

Net core loans grew by 5.7% to R343.7 billion (FY2023: R325.1 billion). Corporate credit portfolios increased by 6.7% from 31 March 2023, due to robust corporate lending demand in various lending specialisations in the first half of the financial year. Private Bank's loan book grew by 5.6% since 31 March 2023 with strong growth in the mortgages book partially offset by the effect of muted growth in the income producing real estate book given the high interest rates.

Revenue growth of 5.7% was primarily driven by higher average interest earning assets, positive endowment effect from higher interest rates, increased client activity and continued client acquisition in line with our growth strategy

• The net interest income (NII) growth of 9.2% benefitted from balance sheet growth and the elevated interest rate environment. NII was negatively impacted by the foregone interest income of approximately R485 million in the current year on funds utilised in the Group's c.R6.8 billion share buy-back and share repurchase programme. Noteworthy, the buy-back programme has had a positive impact on the bank's ROE. Our non-wholesale deposits grew by 14.1% in line with our strategy to increase the proportion of retail deposits in our funding pool

• Non-interest revenue decreased 1.4% driven by:

- Net fee and commission income increased marginally, benefitting from the growth in activity levels in the corporate and institutional banking business and Investec for Business from increased demand for trade finance. This was partly offset by muted lending based fees from the income producing real estate book and higher costs associated with fee generation given the increased transactional activity within Private Bank. The prior year included fees from the property management companies which were disposed of in 2023

- Trading income from Balance sheet management activities increased due to a reduction in losses from MTM movements associated with managing fixed deposit interest rate risk. Recognition of these MTM movements are temporary and reverse over the life of the fixed deposits

- Positive contribution from Investment income, driven by higher realised gains on disposals and dividend income from investment portfolios in our client franchises

- Other operating income benefitted from the non-repeat of prior year MTM losses associated with Ninety One Limited shares held as assets in the Group's balance sheet to fulfil employee share scheme obligations

Offset by:

- The decrease in trading from customer flow in the interest rate desk due to lower derivative trading volumes

• ECL impairment charges is a net release of R163 million compared to a charge of R289 million in the prior period, resulting in a net recovery of -4bps (FY2023 credit loss ratio was 9bps), driven by recoveries on previously impaired loans and model driven releases on Stage 1 and Stage 2 ECLs as a result of updated macroeconomic scenarios and model recalibration; partially offset by Stage 3 ECL charges

• The cost to income ratio was 48.4% (FY2023: 47.8%). Operating costs increased 7.2% driven by higher personnel expenses due to inflationary salary increases, higher regulatory costs, business related costs as we invest for growth and higher variable remuneration in line with performance. Discretionary costs also increased in line with increased business activity

UK & Other Specialist Banking

Adjusted operating profit increased by 33.9% to £406.2 million (FY2023: £303.4 million); supported by the diversity in our client franchises and geographies and the integrated approach in how we provide solutions for our clients. Revenue growth was strong across our key client franchises as we continued to successfully execute our client acquisition strategies to build scale and relevance in the UK and other markets in which we operate. Pre-provision adjusted operating profit increased by 33.0% to£492.2 million.

Net core loans grew by 6.4% to £16.6 billion driven by continued client acquisition and strong demand for corporate lending across diversified areas, which grew by 8.6% year to date. The residential mortgage lending book reported moderate growth of 4.3% as the elevated interest rates negatively affected demand for mortgages in the UK market in general.

Revenue growth of 18.8% was underpinned by growth in larger average loan book, increased client activity and the positive endowment effect from higher interest rates and strong growth in non-interest revenue. Net fees and commission income increased significantly driven by higher fees from our listed advisory business as well as the inclusion of M&A revenues from Capitalmind. Trading income from customer flow and balance sheet management also contributed positively.

• Net interest income increased by 13.2% benefitting from a larger average book and higher global interest rates. Our diversified client lending franchises allows us to continue growth notwithstanding the persistently uncertain operating environment. Our client acquisition strategies are the key underpin to the sustained loan book growth across diversified specialisations.

• Non-interest revenue increased by 36.5% driven by:

- Higher Listed companies' advisory fees in the current year amidst a challenging UK advisory market and the first-time consolidation of Capitalmind, increasing our M&A advisory fees. We have also seen higher arrangement fees in certain lending areas. Activity levels in equity capital markets remain muted given the challenging macroeconomic environment

- Trading income from customer flow increased by 17.4% over the period driven by increased facilitation of hedging for clients by our Treasury Risk Solutions area, increased client flow trading income in our ECM activities, as well as positive risk management gains from hedging the significantly reduced financial products run down book

- Trading income from balance sheet management and other trading activities increased significantly as a result of unwinding certain existing interest rate swap hedges as part of the implementation of the structural interest rate hedging programme

ECL impairment charges totalled £86.1 million, resulting in a credit loss ratio of 58bps (FY2023: 37bps) which is in line with guidance provided in November 2023. The increase in ECL charges was largely driven by Stage 3 ECL charges on certain exposures. We have seen idiosyncratic client stresses with no evidence of trend deterioration in the overall credit quality of our books.

The cost to income ratio improved to 55.6% (FY2023: 60.4%). Total operating costs increased by 9.3%. Fixed operating costs include a provision for the industry-wide FCA motor vehicle finance review of £30 million as well as £8.6 million for the first time consolidation of Capitalmind from 1 July 2023. Excluding these items, fixed operating costs increased by 2.9%, well below the UK average inflation rate.

Wealth & Investment

Adjusted operating profit from the Wealth & Investment businesses decreased 3.1% to £103.8 million (FY2023: £107.4 million). This was positively impacted by the net inflows in discretionary FUM in the Southern African business in the current and prior years and includes the results of the Investec Wealth & Investment UK pre-combination with Rathbones and the Group's share of post-tax earnings from the Rathbones Group in the second half of the financial year (i.e. from the completion date).

Totals and variances are presented in £'000 which may result in rounding differences.

Southern Africa Wealth & Investment International Business (in Rands)

Adjusted operating profit increased by 29.6% to R871 million (FY2023: R672 million) in a challenging operating environment.

Total FUM increased by 15.2% to R501.3 billion (FY2023: R435.1 billion) driven by discretionary and annuity net inflows of R16.6 billion, reallocation of FUM previously reported by IW&I UK following the combination with Rathbones, positive market movement and positive foreign currency translation gains on dollar denominated portfolios. The business reported strong client retention and acquisitions in a very competitive market which is testament to the success of our international wealth management strategy.Non-discretionary FUM reported net outflows of R6.8 billion.

Revenue grew by 18.1% underpinned by strong inflows in our discretionary and annuity portfolios across local and offshore investment products in the current and prior year. This was supported by foreign currency translation gains on US Dollar denominated revenue from the weaker average Rand/Dollar exchange rate. Non-discretionary brokerage decreased in the current period due to lower trading volumes. Revenue in Switzerland grew by 26.0% in Pounds mainly driven by higher average interest rates.

Operating costs increased 13.8 %, driven by investment in people for growth, including higher technology spend, FX related increases in foreign currency denominated expenses, and higher variable remuneration in line with performance. Fixed operating expenditure increased by 14.7%. Operating margins increased to 29.9% (FY2023: 27.3%).

UK & Other Wealth & Investment

The all-share combination of IW&I UK and Rathbones successfully completed at the end of 1H2024, creating the UK's leading discretionary wealth manager with £107.6 billion FUMA at 31 March 2024.

In 1H2024 the IW&I UK business generated adjusted operating profit (post-tax) of £35.9 million (10.8% above 1H2023) and an operating margin of 25.2% (1H2023: 23.6%) in an uncertain economic and operating environment.

In 2H2024 i.e. post combination, the Group's 41.25% economic interest in the combined Rathbones Group has been equity accounted, reporting £31.0 million share of post-taxation profit of associates.

For the quarter to 31 March 2024, Rathbones realised £10.6 million of the £15 million run-rate synergies planned to be achieved by 31 October 2024. Rathbones reported operating margin of 26.5% for the quarter ended 31 March 2024, in line with the FY2024 guidance provided at year-end results released on 6 March 2024.

We remain confident that the combination will deliver scale and efficiency to power future long-term growth.

Group Investments

Group Investments includes the holding in Ninety One, Bud Group Holdings, Burstone Group (formerly known as IPF) and other equity investments

Totals and variances are presented in £'000 which may result in rounding differences.

Adjusted operating profit from Group Investments decreased by 19.2% to £14.4 million (FY2023: £17.8 million) driven by:

• The cessation of equity accounting for Bud Group Holdings following its restructure and Ninety One post the distribution of a 15% shareholding in May 2022, partly offset by higher investment income on fair value measurement of our shareholding in Burstone Group

• Lower dividend income from Ninety One.

Further information

Additional information on each of the business units is provided in the Group year-end results analyst book published on the Group's website: http://www.investec.com.

On behalf of the Boards of Investec plc and Investec Limited

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 from a shareholder perspective, in which the economic and voting rights of ordinary shareholders of the companies are maintained in equilibrium relative to each other. Creditors, however, are ring-fenced to either Investec plc or Investec Limited as there are no cross-guarantees between the companies. 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, these year end results reflect the results and financial position of the combined DLC Group under UK adopted International Financial Reporting Standards (IFRS) which comply with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) and the (EC) No. 1606/2022 as it applies in the European Union, 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.

Following a review of the liquidity, capital position, profitability, the business model and operational risks facing the business, the directors have a reasonable expectation that the Investec Group will be a going concern for a period of at least 12 months. The results for the year ended 31 March 2024 have accordingly been prepared on the going concern basis.

Unless the context indicates otherwise, all comparatives included in the commentary above relate to the year ended 31 March 2024.

Amounts represented on a neutral currency basis for income statement items assume that the relevant average exchange rates for the year ended 31 March 2024 remain the same as those in the prior year. Amounts represented on a neutral currency basis for balance sheet items assume that the relevant closing exchange rates as at 31 March 2024 remain the same as those at 31 March 2023.

Neutral currency information is reviewed by external audit and considered as pro-forma financial information as per the JSE Listings Requirements and is therefore the responsibility of the Group's Board of Directors. Pro-forma financial information was prepared for illustrative purposes and because of its nature may not fairly present the issuer's financial position, changes in equity, or results of operations.

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 condition of these individual companies are reported in the local currencies in which they are domiciled, including Rands, Australian Dollars, Euros, US Dollars and Indian Rupee. 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:

Profit Forecast

Revenue momentum is expected to continue, underpinned by book growth, stronger client activity levels and success in our client acquisition strategies; partly offset by expected cuts in interest rates.

The Group currently expects:

• Group ROE to be c.14% and ROTE to be c.16%. Investec Limited is expected to report ROE of c.18.5%, and Investec plc is expected to report ROTE of c.13%

• Overall costs to be well managed in the context of inflationary pressures and continued investment in the business, with cost to income ratio expected to be c.54.0%.

• The credit loss ratio to be within the through-the-cycle (TTC) range of 25bps to 45bps. Investec Limited is expected to be close to the lower end of the TTC range of 15bps to 35bps. Investec plc credit loss ratio is expected to remain elevated at 50bps to 60bps range in the short-term.

The Group remains well positioned to continue supporting its clients amidst the uncertain macroeconomic outlook. We have strong capital and liquidity levels to navigate the current environment and pursue our identified growth initiatives in our chosen markets.

The basis of preparation of this statement and the assumptions upon which it was based are set out below. This statement is subject to various risks and uncertainties and other factors - 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 in this Profit Forecast.

Any forward-looking statements made are based on the knowledge of the Group at 22 May 2024.

This forward-looking statement represents a profit forecast under the Listing Rules of the UK's Financial Conduct Authority. The Profit Forecast relates to the year ending 31 March 2025.

The financial information on which the Profit Forecast was based is the responsibility of the Directors of the Group and has not been reviewed and reported on by the Group's auditors.

Basis of preparation

The Profit Forecast has been properly compiled using the assumptions stated below, and on a basis consistent with the accounting policies adopted in the Group's 31 March 2023 audited annual financial statements, which are in accordance with UK adopted international accounting standards and International Financial Reporting Standards Accounting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

At 31 March 2024, UK adopted IAS are identical in all material respects to current IFRS applicable to the Group, with differences only in the effective dates of certain standards.

Assumptions

The Profit Forecast has been prepared on the basis of the following assumptions during the forecast period:

Factors outside the influence or control of the Investec Board:

• There will be no material change in the political and/or economic environment that would materially affect the Investec Group

• There will be no material change in legislation or regulation impacting on the Investec Group's operations or its accounting policies

• There will be no business disruption that will have a significant impact on the Investec Group's operations, whether for the economic effects of increased geopolitical tensions or otherwise

• The Rand/Pound Sterling, Euro/Pound, INR/Pound and US Dollar/Pound Sterling exchange rates and the tax rates remain materially unchanged from the prevailing rates detailed above

• There will be no material changes in the structure of the markets, client demand or the competitive environment

• There will be no material change to the facts and circumstances relating to legal proceedings and uncertain tax matters.

Estimates and judgements

In preparation of the Profit Forecast, the Group makes estimations and applies judgement that could affect the reported amount of assets and liabilities within the reporting period. Key areas in which judgement is applied include:

• Valuation of unlisted investments primarily in private equity, direct investments portfolios and embedded derivatives. Key valuation inputs are based on the most relevant observable market inputs, adjusted where necessary for factors that specifically apply to the individual investments and recognising market volatility

• The determination of ECL against assets that are carried at amortised cost and ECL relating to debt instruments at fair value through other comprehensive income (FVOCI) involves the assessment of future cash flows which is judgmental in nature

• Valuation of investment properties is performed by capitalising the budgeted net income of the property at the market related yield applicable at the time.

• The Group's income tax charge and balance sheet provision are judgmental in nature. This arises from certain transactions for which the ultimate tax treatment can only be determined by final resolution with the relevant local tax authorities. The Group recognises in its tax provision certain amounts in respect of taxation that involve a degree of estimation and uncertainty where the tax treatment cannot finally be determined until a resolution has been reached by the relevant tax authority. The carrying amount of this provision is often dependent on the timetable and progress of discussions and negotiations with the relevant tax authorities, arbitration processes and legal proceedings in the relevant tax jurisdictions in which the Group operates. Issues can take many years to resolve and assumptions on the likely outcome would therefore have to be made by the Group. Where appropriate, the Group has utilised expert external advice as well as experience of similar situations elsewhere in making any such provisions

• Determination of interest income and interest expense using the effective interest rate method involves judgement in determining the timing and extent of future cash flows

• There will be no business disruption that will have a significant impact on the Investec Group's operations, whether for the economic effects of increased geopolitical tensions or otherwise.

Accounting policies, significant judgements and disclosures

These unaudited condensed combined consolidated financial results have been prepared in terms of the recognition and measurement criteria of International Financial Reporting Standards (IFRS) and the presentation and disclosure requirements of IAS 34, "Interim Financial Reporting" and IFRS as adopted by the UK which comply with IFRS as issued by the IASB. At 31 March 2024, UK adopted IFRS are identical in all material respects to current IFRS applicable to the Group, with differences only in the effective dates of certain standards.

The accounting policies applied in the preparation of the results for the year ended 31 March 2024 are consistent with those in the audited financial statements for year ended 31 March 2023 with the exception of IFRS 17 "Insurance Contracts" which has been adopted in the current year. Management performed an analysis of the impact that the retrospective application of the standard would have had on the prior year published financial statements and concluded that the impact is immaterial for the purposes of this set of financial statements. Accordingly, the impact of IFRS 17 will be applied prospectively. The prior year financial statements have been restated and the detail is provided in the restatement notes.

The financial results have been prepared under the supervision of Nishlan Samujh, the Group Finance Director. The year end financial statements for the year ended 31 March 2024 are available on the Group's website:

www.investec.com

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:

- changes in the political and/or economic environment that would materially affect the Investec Group

- changes in legislation or regulation impacting the Investec Group's operations or its accounting policies

- changes in business conditions that will have a significant impact on the Investec Group's operations

- changes in exchange rates and/or tax rates from the prevailing rates outlined in this announcement

- changes in the structure of the markets, client demand or the competitive environment

• A number of these factors are beyond the Group's control

• These factors may cause the Group's 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 22 May 2024.

• The information in the Group's announcement for the year ended 31 March 2024, which was approved by the Board of Directors on 22 May 2024, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The 31 March 2023 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

• The financial information on which forward-looking statements are based is the responsibility of the Directors of the Group and has not been reviewed and reported on by the Group's auditors.

This announcement is available on the Group's website:www.investec.com

Definitions

• Adjusted operating profit refers to operating profit before goodwill, acquired intangibles and strategic actions and after adjusting for earnings attributable to other non-controlling interests. Non-IFRS measures such as adjusted operating profit are reviewed by external audit and are considered as pro-forma financial information as per the JSE Listing Requirements. The pro-forma financial information is the responsibility of the Group's Board of Directors. Pro-forma financial information was prepared for illustrative purposes and because of its nature may not fairly present the issuer's financial position, changes in equity or results of operations

• Adjusted earnings is calculated by adjusting basic earnings attributable to shareholders for the amortisation of acquired intangible assets, non-operating items including strategic actions, and earnings attributable to perpetual preference shareholders and other additional tier 1 security holders

• Adjusted basic earnings per share is calculated as adjusted earnings attributable to shareholders divided by the weighted average number of ordinary shares in issue during the year

• Headline earnings is adjusted earnings plus the after tax financial effect of strategic actions and the amortisation of acquired intangible assets. Headline earnings is an earnings measure required to be calculated and disclosed by the JSE and is calculated in accordance with the guidance provided in Circular 1/2023

• Headline earnings per share (HEPS) is calculated as headline earnings divided by the weighted average number of ordinary shares in issue during the year

• Basic earnings is earnings attributable to ordinary shareholders as defined by IAS33 "Earnings Per Share"

• Dividend payout ratio is calculated as the dividend per share divided by adjusted earnings per share

• Pre-provision adjusted operating profit is calculated as total operating income before expected credit loss impairment charges, net of operating costs and net of operating profits or losses attributable to other non-controlling interests

• The credit loss ratio is calculated as expected credit loss (ECL) impairment charges on gross core loans as a percentage of average gross core loans subject to ECL

• The cost to income ratio is calculated as operating costs divided by operating income before expected credit loss impairment charges (net of operating profits or losses attributable to other non-controlling interests)

• Return on average ordinary shareholders' equity (ROE) is calculated as adjusted earnings attributable to ordinary shareholders divided by average ordinary shareholders' equity

• Return on average tangible ordinary shareholders' equity (ROTE) is calculated as adjusted earnings attributable to ordinary shareholders divided by average tangible ordinary shareholders' equity

• Core loans is defined as net loans to customers plus net own originated securitised assets

• NCI is non-controlling interests.

Financial assistance

Shareholders are referred to Special Resolution number 30, which was approved at the annual general meeting held on 3 August 2023, 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 2023 to 31 March 2024 to various Group subsidiaries.

Exchange rate impact on statutory results

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 Rand: Pound Sterling exchange rate over the period has depreciated by 15.1% against the comparative year ended 31 March 2023, and the closing rate has depreciated by 9.2% since 31 March 2023. The following tables provide an analysis of the impact of the Rand on our reported numbers.

^ For income statement items we have used the average Rand: Pound Sterling exchange rate that was applied in the prior period, i.e. 20.45.

^^ For balance sheet items we have assumed that the Rand: Pound Sterling closing exchange rate has remained neutral since 31 March 2023.

* Restated as detailed below.

Condensed combined consolidated income statement

^ Restated as detailed below.

* Refer to discontinued operations disclosure.

Earnings per share

^ Restated as detailed below.

Combined consolidated statement of total comprehensive income

^ Restated as detailed below.

* These amounts are net of taxation of £11.8 million (31 March 2023: £7.6 million).

Combined consolidated balance sheet

^ Restated as detailed below.

** During the year the group reassessed the order of liquidity within the balance sheet and moved 'Investment portfolio' to below 'Other financial instruments at fair value through profit or loss in respect of liabilities to customers' as it was found to be less liquid than the items that were listed above it. In addition, 'Other financial instruments at fair value through profit or loss in respect of liabilities to customers', 'Liabilities to customers under investment contracts' and 'Insurance liabilities, including unit-linked liabilities' were moved higher up in the order of balance sheet line items as these items were found to be more liquid than those that follow them in the above presentation. The reorder has also been applied to the prior year and notes where the line items are listed.

Condensed consolidated statement of changes in equity

^ Restated as detailed below.

Condensed consolidated cash flow statement

^ Restated as detailed below.

Headline earnings per share

Prior to becoming a subsidiary, the investment in Capitalmind associates met the definition of a venture capital investment as defined in the Headline Earnings Circular 1/2023. During the period a gain of £4mn was recognised as a result of a stepped acquisition of Capitalmind from 30% to 60% that required a revaluation of the previously held 30%. This amount was included in headline earnings.

** Taxation on property revaluation headline earnings adjustments amounted to £0.7 million (2023: £1.0 million) with an impact of £nil (2023: £3.6 million) on earnings attributable to non-controlling interests. The amount includes property revaluations included in equity accounted earnings.

*** Headline earnings per share and diluted headline earnings per share have been calculated and is disclosed in accordance with the JSE listing requirements, and in terms of circular 1/2023 issued by the South African Institute of Chartered Accountants.

Combined consolidated segmental analysis

Segmental geographical and business analysis of adjusted operating profit before goodwill, acquired intangibles, non-operating items, taxation and after non-controlling interests.

^ Restated as detailed below.

* Refer to discontinued operations disclosure.

Pro-forma income statement

Given the nature of the IW&I UK and IPF transactions, the Group's economic interest remained similar before and after the transactions. To provide information that will be more comparable to the future presentation of returns from the Group's interest in these entities and given their new holding structures, pro-forma information has been prepared as if the transactions had been in effect from the beginning of the period, i.e. IW&I UK has been presented as an equity accounted investment and IPF as an investment at fair value through profit or loss.

* Refer to discontinued operations disclosure.

* Refer to discontinued operations disclosure.

Discontinued operations

During the year, the Group had two significant strategic actions which have been reflected as discontinued operations.

The effective date of the combination of Investec Wealth & Investment Limited and Rathbones Group Plc was 21 September 2023, at which point the Group deconsolidated its 100% holding in Investec Wealth & Investment Limited and in return acquired a 41.25% interest in Rathbones Group plc which is accounted for as an equity investment. The completion date of the sale of the Investec Property Fund (IPF) management companies was 6 July 2023 at which point the Group deconsolidated its existing c.24.3% investment in IPF. The Investec Wealth & Investment business and IPF have been disclosed as discontinued operations. The Wealth & Investment business was disclosed in the Wealth & Investment segment in the UK and other geography and the IPF business was disclosed in the Group Investments segment in the Southern Africa geography. 

Reconciliation of profit after taxation and financial impact of strategic actions from discontinued operations as disclosed in the income statement to earnings from discontinued operations attributable to shareholders provided in the tables below

The table below presents the income statement from discontinued operations included in the total Group income statement for the year to 31 March 2024.

The table below presents the income statement from discontinued operations included in the total Group income statement for the year to 31 March 2023.

Financial impact of strategic actions of discontinued operations