Investec Regulatory News (INVP)

Investec (comprising Investec plc and Investec Limited) - Reviewed combined consolidated financial results for the six months ended 30 September 2022

Group results summary for the six months ended 30 September 2022 (1H2023) compared to 30 September 2021 (1H2022)

• The Group continues to successfully navigate the uncertain macro backdrop that has persisted since the onset of the pandemic and has made significant progress against the strategic goals outlined at the 2019 Capital Markets Day

• Adjusted earnings per share increased 25.1% to 32.9p (1H2022: 26.3p), at the top end of previous guidance.

• Funds under management (FUM) decreased 7.6% to £59.0 billion (31 March 2022: £63.8 billion) reflecting the year-to-date decline in global markets. Net inflows were £202 million, with £464 million in discretionary FUM inflows partly offset by £261 million net outflows in non-discretionary FUM

• Net core loans grew 7.1% annualised to £31.0 billion (31 March 2022: £29.9 billion) largely driven by corporate lending in both core geographies and UK residential mortgage lending

• Revenue grew 18.9% as momentum continued in our client franchises in a highly volatile and uncertain operating environment and benefitted from rising global interest rates

• The cost to income ratio improved to 60.5% (1H2022: 64.0%)

• Pre-provision adjusted operating profit increased 29.5% to £435.2 million (1H2022: £336.0 million), demonstrating the strength and diversity of our client franchises

• Asset quality remains strong and well covered by collateral. Expected credit losses (ECL) impairment charges increased to £30.2 million (1H2022: £10.2 million), resulting in a credit loss ratio (CLR) of 15bps (1H2022: 7bps)

• Return on equity (ROE) was 13.0% (1H2022: 11.2%) and return on tangible equity (ROTE) was 13.9% (1H2022: 12.1%)

• Tangible net asset value (TNAV) per share has remained flat at 475.3p (31 March 2022: 476.6p). Net asset value (NAV) per share was 507.9p (31 March 2022: 510.0p). Strong earnings generation offset by the distribution of a 15% shareholding in Ninety One to shareholders

• The Group continued to make progress on its capital optimisation strategy. In conjunction with the initial share purchase programme previously announced, the Board has approved a proposed share purchase and a share buyback programme of up to R7 billion (c.£350 million) to be executed over the next 18 months

• Maintained strong capital and liquidity positions allowing us to navigate the current uncertain environment and support identified growth initiatives

• The Board has proposed an interim dividend of 13.5p per share (1H2022:11.0p), resulting in a payout ratio of 41.0%.

Fani Titi, Group Chief Executive commented:

"The Group's earnings growth momentum continued, underpinned by strong revenues from our diversified client franchises and a focused approach to support our clients. We achieved adjusted earnings per share of 32.9p, a 25.1% improvement on the prior period, and at the top end of the previous guidance. Rising global interest rates, client acquisition and strong asset quality supported these results.

We have made good progress on our capital optimisation strategy as we seek to return excess capital from the South African balance sheet to shareholders. Today, we announce our intention to purchase and buy back up to R7 billion of our shares.

I am also pleased that the Board has proposed an interim dividend of 13.5p per share, a 22.7% increase on the prior period.

We have strong liquidity and capital levels and are well positioned to support all our stakeholders, including our clients, our people, and communities around us. We are proud of the progress we are making to entrench sustainability across every aspect of our business."

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 six month period ended 30 September 2022 (1H2023). Unless stated otherwise, comparatives relate to the Group's operations for the six month period ended 30 September 2021 (1H2022). The average Rand/Pound Sterling exchange rate appreciated by c.1% relative to 1H2022.

Basic earnings per share were positively impacted by a gain of £155.1 million on implementation of the distribution of a 15% shareholding in Ninety One to shareholders on 30 May 2022.

Capital optimisation

Progress on AIRB:

Investec Limited is at the final stage of the approval process to migrate the remaining portfolios to Advanced Internal Ratings Based (AIRB) approach for capital measurement. On successful conversion to AIRB, the Group anticipate a 200bps uplift to the CET1 ratio reported at 30 September 2022. Investec plc is in the early stages of a process to migrate from the Standardised approach to the Internal Ratings Based (IRB) approach.

IEP Group restructure:

Post period end, the following restructure was approved by the shareholders of IEP and the Bud Group:

• The IEP Group and Bud Group shareholders have approved a restructure to facilitate an exit by certain IEP shareholders, including Investec, by way of a share buyback. The restructure entails the transfer of certain assets to a Newco, to facilitate the orderly disposal of those assets

• Newco has entered into binding transaction agreements to dispose of certain chemical assets that constitute a significant portion of IEP's carrying value in Investec's financial statements

• Both the restructure and the chemical assets disposal are subject to regulatory approvals and other conditions precedent typical for a transaction of this nature. Whilst the chemical assets disposal is anticipated to be concluded during 2023, the balance of the asset disposal process is anticipated to conclude over the next 24 months, subject to market conditions.

Share purchase and buy-back:

On 3 October 2022, the Group announced a c.£60 million (or R1.2 billion) share purchase programme pursuant to which Investec Limited would purchase Investec plc ordinary shares (the "PLC Share Purchase Programme").

In conjunction with the PLC Share Purchase Programme, the Board has now approved a proposed share purchase and a share buy-back programme of up to a total of R7 billion (c.£350 million), pursuant to which Investec Limited would purchase Investec plc ordinary shares and would buy back its own shares (the "Investec Purchase and Buyback Programme"). Investec anticipates that this programme will be executed over the next 18 months subject to market conditions. A further announcement about the commencement of the Investec Purchase and Buyback Programme is expected to be made in due course.

The Investec Purchase and Buyback Programme is in line with previously communicated strategic priorities that the Group intends to optimise its capital base given the capital surplus position in South Africa. To date, under the PLC Share Purchase Programme, Investec Limited has purchased approximately 6.9 million shares of Investec plc; these shares will be treated as treasury shares by the Group.

Shares acquired by Investec Limited under the Investec Purchase and Buyback Programme will be additional to the 10 million Investec Limited shares that were repurchased and cancelled by Investec Limited in the last twelve months.

Outlook

The Group continues to successfully navigate the uncertain macro backdrop that has persisted since the onset of the pandemic and has made significant progress against the strategic goals outlined at the 2019 Capital Markets Day. We have strong capital and robust liquidity levels, are firmly committed to our medium-term targets and well positioned to pursue identified growth initiatives in our chosen markets.

FY2023 guidance:

Based on financial performance for 1H2023, current business momentum and the increased uncertainty captured in the updated macro-economic forecast for the second half of the financial year, the Group currently expects:

• Revenue to be underpinned by rising interest rates, book growth, and client activity

• The cost to income ratio to remain within the Group target of

• Normalisation of expected credit loss impairment charges and consequent credit loss ratio increase towards the Group's through-the-cycle (TTC) range of 25-35bps

• South Africa to continue to operate with a surplus capital position given excess capital generation and the anticipated CET1 uplift on full implementation of AIRB

• To continue the return of excess capital to shareholders

• ROE to remain within the 12-16% Group target range.

Enquiries

Investec Investor Relations

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

Carly NewtonTel: +44 (0) 20 7597 4493

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

Brunswick (SA PR advisers)

Graeme CoetzeeTel: +27 (0) 63 685 6053

Lansons (UK PR advisers)

Tom BaldockTel: +44 (0) 78 6010 1715

Presentation/conference call details

Investec management will host its interim results presentation live from Johannesburg on Thursday 17 November at 11h00 (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 8,500+ employees.

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

Johannesburg and LondonSponsor: Investec Bank Limited

Group financial performance

Overview

Pre-provision adjusted operating profit increased, supported by continued client acquisition resulting in higher average advances, rising interest rates and increased client activity. Fee income in our Wealth & Investment businesses was negatively impacted by the effects of the market sell off on average FUM.

Fixed operating expenditure reflects the inflationary pressures and continued investment in technology and people, while variable remuneration increased given strong business performance.

Impairments were driven by updated forward looking macro-economic scenarios since FY2022 for the UK Bank partly offset by net model releases and recoveries in South Africa.

Pre-provision adjusted operating profit increased 29.5% to £435.2 million (1H2022: £336.0 million).

Revenue increased 18.9% to £1 131.3 million

(1H2022: £951.1 million)

Net interest income increased 31.5% to £604.8 million (1H2022: £459.8 million) driven by higher average interest earning assets and rising interest rates.

Non-interest revenue (NIR) increased 7.1% to £526.5 million (1H2022: £491.4 million).

• Net fee and commission income increased 1.8% to £398.3 million (1H2022: £391.2 million) due to improved corporate client activity in South Africa, and in certain client franchises in the UK. This was partly offset by lower fee income from Wealth & Investment and UK equity capital markets activity due to market volatility and uncertainty during the period

• Investment income increased to £28.6 million (1H2022: £3.5 million), reflecting dividends received and realised gains on disposal of investments. This includes dividends received from Ninety One following the reclassification of this investment post the 15% distribution in May 2022. Ninety One results were previously equity accounted and reported in the post-taxation profit of associates and joint ventures line on the income statement

• Share of post-taxation profit of associates and joint venture holdings decreased to £27.5 million (1H2022: £41.5 million). The impact of lower associate earnings following the distribution of Ninety One in May 2022 was partly offset by higher earnings from IEP given improvement in the operational performance of the underlying investee companies within IEP

• Trading income arising from customer flow increased to £69.4 million from £65.1 million in the prior period, due to strong growth in client trading in both geographies, offset by lower mark-to-market (MTM) gains on IPF balance sheet hedging activities

• Net trading gains arising from balance sheet management and other trading activities were £9.4 million compared to a loss of £18.5 million in the prior period. The gains arise from MTM movements in the value of currency and interest rate hedges on the balance sheet

• Other operating loss of £6.7 million (1H2022: £8.5 million income) includes fair value movements of Ninety One shares held in the Group's staff share scheme to settle Ninety One share awards resulting from the initial demerger in 2020 and the distribution completed in May 2022. These shares are included in the Group's balance sheet in other assets. The corresponding liability is reflected in other liabilities with changes in the value of the liability expensed through staff expenses in operating costs.

Expected credit loss (ECL) impairment charges increased by £20.0 million to £30.2 million (1H2022: £10.2 million) resulting in a credit loss ratio of 15bps (1H2022: 7bps)

Asset quality remains strong, with exposures to a carefully defined target market well covered by collateral. The ECL charges increase was primarily driven by the deterioration in the UK forward-looking macro-economic outlook since March 2022 and Stage 3 ECL charge which remains below historical experience. This was partly offset by net model and management overlay releases and recoveries in SA. Given the uncertain economic outlook, the Group has maintained a level of post-model management overlays to account for risks assessed as inadequately reflected in the models.

Operating costs increased 11.5% to £667.4 million (1H2022: £598.5 million)

Fixed operating expenditure increased by 9.8% due to inflationary pressures, investment in technology and people and post-pandemic normalisation in discretionary expenditure. The cost to income ratio improved to 60.5% from 64.0% in the prior period

Since September 2019, fixed costs increased 3.9%, while revenue grew by 17.9% reflecting the heightened focus on cost discipline whilst continuing to generate strong revenue growth.

Taxation

The taxation charge on adjusted operating profit was £86.6 million (1H2022: £63.7 million), resulting in an effective tax rate of 21.3% (1H2022: 21.2%). In the UK, the effective tax rate is 22.8% (1H2022: 10.8%).

The lower effective tax rate in 1H2022 was due to higher deferred tax assets on the back of higher enacted tax rates. In SA, the effective tax rate normalised to 20.3% (1H2022: 27.3%), the higher rate in the prior period was driven by the impairment of certain deferred tax assets.

Profit or loss attributable to non-controlling interests

The profit attributable to non-controlling interests is £28.7 million compared to £16.7 million in the prior period and is attributable to the non-controlling interests in the Investec Property Fund (IPF).

Funding and liquidity

Customer deposits grew 2.1% annualised to £40.5 billion (31 March 2022: £40.1 billion) at 30 September 2022. Cash and near cash of £15.9 billion (£8.5 billion in Investec plc and R149.2 billion in Investec Limited) at 30 September 2022 represents approximately 39.2% of customer deposits. Loans and advances to customers as a percentage of customer deposits was 75.8%. The Group comfortably exceeds Basel liquidity requirements for the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).

Investec Bank Limited (consolidated Group) ended the period to 30 September 2022 with the three-month average of its LCR at 157.7% and an NSFR of 115.6%. Investec plc reported a LCR of 366% and a NSFR of 136% at 30 September 2022.

Capital adequacy and leverage ratios

Capital and leverage ratios remain sound, ahead of Board-approved minimum targets and regulatory requirements. The CET1 and leverage ratio were 14.1% and 7.1% for Investec Limited (increased AIRB scope) and 11.1% and 8.1% for Investec plc (Standardised approach) respectively.

Investec Limited made progress through the completion of the six months parallel run as part of the application to adopt AIRB for the measurement of capital on certain portfolios currently on the Foundation Internal Ratings Based (FIRB) approach. On full adoption of AIRB, the pro-forma CET1 ratio would increase by 200bps.

Segmental performance

Wealth & Investment

Adjusted operating profit from the Wealth & Investment businesses decreased 4.0% to £55.4 million (1H2022: £57.7 million) impacted by the decline in market levels in the period under review.

Totals and variance determined in £'000 which may result in rounding differences

^Restated. Following a strategic review, our Swiss operations have been earmarked to play a key role in the Group's strategic expansion of its international wealth services. To ensure strategic alignment, the operational results of the Switzerland wealth business are now reported as part of the Southern Africa Wealth & Investment division (previously reported as part of UK & Other Wealth & Investment). The comparative period has been restated to reflect this change. There has been no change in the legal or ownership structures.

Southern Africa Wealth & Investment (in Rands)

Adjusted operating profit for SA Wealth & Investment increased by 8.3% to £15.2 million and in Rands increased by 7.6% to R300.7 million.

Total FUM decreased by 3.7% since March 2022 to £19.7 billion (31 March 2022: £20.5 billion) with discretionary and annuity net inflows of R2.1 billion offset by net outflows in non-discretionary FUM and foreign currency translation losses at period end due to Rand/Pound Sterling movements.

Revenue grew by 4.4% underpinned by inflows into the offshore investment range in the prior and current periods in discretionary portfolios and rising interest rates. Non-discretionary brokerage decreased markedly in the current period due to lower trading volumes given the heightened market volatility.

Operating costs increased 3.0%, driven by higher technology spend, inflationary pressures and post-pandemic normalisation of business expenses. Operating margins improved to 27.1% from 26.1% in 1H2022.

UK & Other Wealth & Investment

Adjusted operating profit for UK & Other Wealth & Investment decreased 7.9% to £40.3 million (1H2022: £43.7 million), reflecting the volatile and uncertain operating environment.

FUM decreased by 9.4% to £38.8 billion impacted by the declining market levels since 31 March 2022 (FY2022: £42.9 billion). Net inflows for 1H2023 were £443 million translating to a net organic growth in FUM of 2.1% (annualised). The elevated market volatility resulted in subdued client activity and delays in investment decisions, negatively impacting both inflows and commission-based fee income.

Revenue was flat, positively impacted by net organic flows in the current period and prior year and base rate increases which were offset by lower fee income due to lower average FUM given market sell off. Commission based income was also negatively impacted by the market conditions.

Operating costs were up 3.0% due to investment in technology, post-pandemic normalisation in discretionary expenditure and inflationary pressures. Operating margin was 23.6% (1H2022: 26.0%).

Specialist Banking

Adjusted operating profit from Specialist Banking increased 28.6% to £331.6 million (1H2022: £257.9 million). Pre-provision adjusted operating profit increased 35.3% to £360.9 million (1H2022: £266.8 million).

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

Southern Africa Specialist Banking (in Rands)

Adjusted operating profit increased 16.4% to R4 026 million (1H2022: R3 461 million).

Revenue increased 14.6%, positively impacted by higher average interest earning assets, rising interest rates, increased client activity and continued client acquisition in line with our growth strategy. This was also supported by positive investment income.

Net interest income increased 14.3% driven by higher average interest earning assets and rising interest rates.

Non-interest revenue increased 15.1% driven by:

• Higher fee income from increased utilisation of trade finance facilities and higher investment banking fees

• Investment income largely benefitted from non-repeat of prior period negative FV adjustments

• Trading income from customer flow grew as heightened volatility and rising interest rates drove increased client activity levels

- partially offset by

• Balance sheet management and other trading income reflects MTM losses on certain interest rate and currency swaps. These are timing differences arising where hedge accounting could not be applied to an economic hedge in terms of IFRS accounting

• Other operating income was negatively impacted by MTM losses since year end on Ninety One Limited shares held as assets in Group's balance sheet to fulfil employee share scheme obligations.

Expected credit loss impairment charges decreased 71.6%. ECL on core loans was a net recovery, resulting in a 1bps recovery in the current period versus a credit loss ratio of 4bps in the prior period. ECL net recovery was primarily driven by net model releases, reversal of impairments and recoveries on previously impaired loans. During the period, management overlays of R30 million relating to the residential mortgage book were released. The remaining management overlay at 30 September 2022 of R189 million (31 March 2022: R219 million) accounts for emerging risks assessed as inadequately reflected in the forward-looking model for commercial real estate lending clients.

The cost to income ratio was 49.8% (1H2022: 49.7%). Operating costs increased 14.6% driven by higher personnel expenses due to salary increases, increased headcount, variable remuneration and the post-pandemic normalisation of discretionary expenditure. Fixed costs increased 13.9%. This follows periods of well contained cost growth, resulting in a 5.4% compounded annual growth rate since September 2019.

Net core loans grew by 10.3% annualised to R313.7 billion (31 March 2022: R298.4 billion). Corporate lending portfolios grew by 16.6% year to date, driven by an increase in corporate credit demand. Advances to private clients reported subdued growth of 1.5% year to date as modest growth in other portfolios within Private Banking was largely offset by muted growth in commercial real estate lending as clients remained risk off.

UK & Other Specialist Banking

Adjusted operating profit increased by 52.3% to £128.6 million (1H2022: £84.5 million). Continued client acquisition supported the annualised loan book growth of 12.8% since 31 March 2022. Operating income growth was underpinned by higher average book, higher fees, rising interest rates and sustained client activity.

Net interest income increased 40.8% driven by higher average interest earning assets, with average lending books up 15.3% relative to 1H2022, and the positive effect of rising global interest rates.

Non-interest revenue increased 13.8% due to:

• Higher fees from increased activity levels in the private equity and power and infrastructure client franchises

• Investment income driven by dividend income and realised gains on disposal of investments

• Increase in trading income from customer flows supported by higher hedging demand from clients given market volatility

• Trading income from balance sheet management and other trading activities growth was supported by the non-repeat of costs associated with the early redemption of a senior bond in the prior period

- offset by

• Lower fees and trading income from equity capital markets activities given the volatile and uncertain environment.

ECL impairment charges totalled £27.9 million, resulting in a credit loss ratio of 32bps (1H2022: 9bps). The increase in ECL charges was driven by the deterioration in forward-looking macro-economic assumptions, updated scenario weightings in our ECL models and Stage 3 ECL charges albeit still below historical experience. This follows limited impairment charges in the prior period given the significant government support available to UK households and companies during the pandemic. The management overlay of £16.8 million has been retained to account for the uncertainty that remains in the macro-economic environment, in particular, the ongoing UK political environment and associated market volatility.

The cost to income ratio improved to 64.1% (1H2022: 72.8%). Operating costs increased by 16.6% period-on-period primarily driven by an increase in variable remuneration in line with business performance, inflationary pressures and investment in people and technology. Fixed operating costs increased by 7.0%. The fixed operating costs trajectory since September 2019 reflects the impact of various strategic actions; with 1H2023 costs 1.7% ahead of September 2019 costs while revenue is 25.5% higher over the same period.

Net core loans grew by 12.8% annualised to £15.3 billion (31 March 2022: £14.4 billion) driven by residential mortgages (up 7.9%) and strong demand for corporate credit across multiple portfolios. A portion of the loan growth was the translation effects from the weakening of the Pound Sterling against the US Dollar and Euro during the period.

Group Investments

Group Investments includes the circa 10% holding in Ninety One, 47.4% stake in the IEP Group, 24.31% held in the Investec Property Fund (IPF) and other equity investments.

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

Adjusted operating profit from Group Investments increased by 18.6% to £32.2 million (1H2022: £27.2 million) driven by:

• Continued improvement in the operational performance of the underlying investee companies within IEP

• No repeat of prior period write downs on some of the group's equity investments.

• Net positive contribution from IPF

- offset by

• Lower share of associate earnings from Ninety One following the 15% distribution in May 2022 and consequent derecognition as an investment in associate.

Further information

Additional information on each of the business units is provided in the Group interim 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 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, these half-year results reflect the results and financial position of the combined DLC Group under UK adopted International Financial Reporting Standards (IFRS) which comply with IFRS as issued by the International Accounting Standards Board (IASB), 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 six months ended 30 September 2022 has accordingly been prepared on the going concern basis.

Unless the context indicates otherwise, all comparatives included in the commentary above relate to the six months ended 30 September 2021.

Amounts represented on a neutral currency basis for income statement items assume that the relevant average exchange rates for the six months ended 30 September 2022 remain the same as those in the prior period. Amounts represented on a neutral currency basis for balance sheet items assume that the relevant closing exchange rates at 30 September 2022 remain the same as those at 31 March 2022.

Neutral currency information is 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 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:

Profit Forecast

The following matters highlighted in this announcement contain forward-looking statements:

• Revenue to be underpinned by rising interest rates, book growth, and client activity

• The cost to income ratio to remain within the Group target of

• Normalisation of expected credit loss impairment charges and consequent credit loss ratio increase towards the Group's through-the-cycle (TTC) range of 25-35bps.

• South Africa to continue to operate with a surplus capital position given excess capital generation and the anticipated CET1 uplift on full implementation of AIRB

• To continue the return of excess capital to shareholders

• ROE to remain within the 12-16% Group target range.

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 16 November 2022.

This forward-looking statement represents a profit forecast under the Listing Rules. The Profit Forecast relates to the year ending 31 March 2023.

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 2022 audited annual financial statements, which are in accordance with IFRS.

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 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 the 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 budget 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.

Accounting policies, significant judgements and disclosures

These reviewed condensed combined consolidated financial results have been prepared in terms of the recognition and measurement criteria of 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 30 September 2022, 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 six months ended 30 September 2022 are consistent with those adopted in the financial statements for year ended 31 March 2022.

The external auditors of Investec PLC performed a review of the combined consolidated financial results for the period ended 30 September 2022 in fulfilment of DTR 4.2.9R(1) of the UK Financial Conduct Authority. The review was conducted in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council and their unmodified review conclusion is available for inspection at the registered office of Investec PLC, upon request, or on our website at www.investec.com.

The financial results have been prepared under the supervision of Nishlan Samujh, the Group Finance Director. The interim financial statements for the six months ended 30 September 2022 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 the economic environment caused by the resulting lockdowns and government programmes aimed to stimulate the economy

- 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 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 16 November 2022.

• The information in the Group's announcement for the six months ended 30 September 2022, which was approved by the Board of Directors on 16 November 2022, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. The 31 March 2022 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 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 1/2021.

• 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 4 August 2022, 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 2022 to 30 September 2022 to various Group subsidiaries.

Johannesburg and London

Sponsor: Investec Bank Limited

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 appreciated by 0.7% against the comparative six-month period ended 30 September 2021, and the closing rate has depreciated by 4.2% since 31 March 2022. 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. 19.94.

^^ For balance sheet items we have assumed that the Rand: Pound Sterling closing exchange rate has remained neutral since 31 March 2022.

Condensed combined consolidated income statement

Earnings per share

Combined consolidated statement of total comprehensive income

^These amounts are net of taxation of £2.2million taxation credit (30 September 2021: £3.4 million taxation charge; 31 March 2022: £3.5 million taxation charge) except for the impact of rate changes on deferred tax as shown separately above.

Combined consolidated balance sheet

^Restated as detailed below.

Condensed consolidated statement of changes in equity

Condensed consolidated cash flow statement

^Restated as detailed below.

Cash and cash equivalents is defined as including: cash and balances at central banks, on demand loans and advances to banks and non-sovereign and non-bank cash placements (all of which have a maturity profile of less than three months).

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.

*Profit attributable to non-controlling interests predominantly relates to the Investec Property Fund Limited.

^Following a strategic review, our Swiss operations have been earmarked to play a key role in the Group's strategic expansion of its international wealth services. To ensure strategic alignment, the operational results of the Switzerland wealth business are now reported as part of the Southern Africa Wealth & Investment division (previously reported as part of UK & Other Wealth & Investment). The comparative period has been restated to reflect this change. There has been no change in the legal or ownership structures.

^^Restated as detailed below.

Net fee and commission income

\* Trust and fiduciary fees amounted to £0.2 million (2021: £0.2 million) and are included in Private client transactional fees.

**Included in Group Investments and Specialist Banking is fee and commission income of £38.4 million (2021: £36.8 million) for operating lease income which is out of the scope of IFRS 15 - Revenue from contracts with customers.

Net gain on distribution of associate to shareholders

On 30 May 2022, c.15% shareholding in Ninety One DLC was distributed to ordinary shareholders. The distribution resulted in the shareholding in Ninety One DLC being reduced from 25% to c.10%. The reduction in shareholding resulted in the loss of significant influence and the remaining stake in Ninety One DLC will be accounted for at fair value through other comprehensive income.

Balance sheet restatements

Loans and advances to banks and other liabilities

As at 30 September 2021, within the Wealth & Investment business there was a gross up on-balance sheet in loans and advances to banks and other liabilities as a result of client funds being recorded on balance sheet. The September 2021 balance sheet has been restated to correct the gross up previously reported. This change has no impact on the income statement.

Derivative financial instruments to other assets

As at 30 September 2021 and 31 March 2022, initial margin on collateral, which is not available as an offset to individual exposures, was recorded in derivative financial instruments liabilities instead of other assets. The comparative balance sheets have been restated for the reclassification. This change has no impact on the comparative income statements.

The impact of this change on the 30 September 2021 balance sheet is:

The impact of this change on the 31 March 2022 balance sheet is:

The impact of this change on the 30 September 2021 cash flow statement is:

There is no impact on the 31 March 2022 cash flow statement.

Historical German dividend tax arbitrage transactions

Investec Bank plc has previously been notified by the Office of the Public Prosecutor in Cologne, Germany, that it and certain of its current and former employees may be involved in possible charges relating to historical involvement in German dividend tax arbitrage transactions (known as cum-ex transactions). Investigations are ongoing and no formal proceedings have been issued against Investec Bank plc by the Office of the Public Prosecutor. In addition, Investec Bank plc received certain enquiries in respect of client tax reclaims for the periods 2010-2011 relating to the historical German dividend arbitrage transactions from the German Federal Tax Office (FTO) in Bonn. Since issuing our 31 March 2022 Annual Report, the FTO has provided more information in relation to their claims and Investec Bank plc has sought further information and clarification.

Investec Bank plc is co-operating with the German authorities and continues to conduct its own internal investigation into the matters in question. A provision is held to reflect the potential financial outflows that could arise as a result of this matter. There are factual issues to be resolved which may have legal consequences, including financial penalties.

In relation to potential civil claims; whilst Investec Bank plc is not a claimant nor a defendant to any civil claims in respect of cum-ex transactions, Investec Bank plc has received third party notices in relation to two civil proceedings in Germany and may elect to join the proceedings as a third party participant. Investec Bank plc has itself served third party notices on various participants to these historic transactions in order to preserve statute of limitation on any potential future claims that Investec Bank plc may seek to bring against those parties, should Investec Bank plc incur any liability in the future. Investec Bank plc has also entered into standstill agreements with some third parties in order to suspend the limitation period in respect of the potential civil claims. While Investec Bank plc is not a claimant nor a defendant to any civil claims at this stage, it cannot rule out the possibility of civil claims by or against Investec Bank plc in future in relation to the relevant transactions.

The Group has not provided further disclosure with respect to these historical dividend arbitrage transactions because it has concluded that such disclosure may be expected to seriously prejudice its outcome.

Analysis of assets and liabilities by measurement category

Financial instruments 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).

Transfers between level 1 and level 2

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

Measurement of financial assets and liabilities at level 2

The table below sets out information about the valuation techniques used at the end of the reporting period in measuring financial instruments categorised as level 2 in the fair value hierarchy:

Level 3 financial instruments

The following tables show a reconciliation of the opening balances to the closing balances for level 3 financial instruments. All instruments are at fair value through profit or loss.