Investec PLC Capital Disclosures (0100W)

TIDMINVP

RNS Number : 0100W

Investec PLC

03 February 2017

 
 Investec Limited                      Investec plc 
  Incorporated in the Republic          Incorporated in England 
  of South Africa                       and Wales 
  Registration number 1925/002833/06    Registration number 
  JSE share code: INL                   3633621 
  NSX share code: IVD                   LSE share code: 
  BSE share code: INVESTEC              INVP 
  ISIN: ZAE000081949                    JSE share code: INP 
                                        ISIN: GB00B17BBQ50 
 

Investec (comprising Investec plc and Investec Limited) - Basel III disclosures at 31 December 2016

3 February 2017

Capital disclosures

The disclosures below are made with respect to Basel III quarterly disclosure requirements. The group holds capital in excess of regulatory requirements targeting a minimum common equity tier one capital ratio above 10% and a total capital adequacy ratio range of 14% to 17% on a consolidated basis for each of Investec plc and Investec Limited.

 
                                   Investec                      Investec 
                                     plc*^         IBP*^          Limited*        IBL* 
 As at 31 December                   GBP            GBP 
  2016                                'mn            'mn           R'mn           R'mn 
------------------------------  -------------  -------------  --------------  ----------- 
 Common equity tier 
  1 capital before deductions           2,012          1,965          30,775       32,718 
 Deductions                             (525)          (393)             413          471 
 Common equity tier 
  1 capital                             1,487          1,572          31,188       33,189 
                                -------------  -------------  --------------  ----------- 
 
 Additional tier 1 
  capital                                  23              -           3,405          921 
 
 Tier 1 capital                         1,510          1,572          34,593       34,110 
                                -------------  -------------  --------------  ----------- 
 
 Tier 2 capital                           512            590          12,386       13,981 
                                -------------  -------------  --------------  ----------- 
 
 Total regulatory capital               2,022          2,162          46,979       48,091 
                                -------------  -------------  --------------  ----------- 
 
 Risk-weighted assets 
  per risk type: 
 Credit risk                            9,865          9,568         243,791      243,690 
 Counterparty credit 
  risk                                    434            434           4,592        4,592 
 Credit valuation adjustment 
  risk                                     80             80           1,632        1,632 
 Equity risk                               95             95          44,692       43,770 
 Market risk                              861            823           5,155        4,887 
 Operational risk                       1,905          1,521          27,799       18,841 
 Total risk-weighted 
  assets                               13,240         12,521         327,661      317,412 
                                -------------  -------------  --------------  ----------- 
 
 Total minimum capital 
  requirement                           1,059          1,002          33,995       32,931 
 
 Capital ratios 
 Common equity tier 
  1 ratio                               11.2%          12.6%            9.5%        10.5% 
 Tier 1 ratio                           11.4%          12.6%           10.6%        10.7% 
 Total capital ratio                    15.3%          17.3%           14.3%        15.2% 
 

Leverage ratio disclosures

 
                      Investec              Investec 
                        plc*^    IBP*^      Limited*       IBL* 
 As at 31 December      GBP       GBP 
  2016                   'mn       'mn        R'mn         R'mn 
-------------------  ---------  -------  -------------  --------- 
 
 Tier 1 capital          1,510    1,572         34,593     34,110 
 Total exposure         20,207   19,972        469,400    437,045 
 Leverage ratio           7.5%     7.9%           7.4%       7.8% 
 

* Where: IBP is Investec Bank plc consolidated and IBL is Investec Bank Limited consolidated. The information for Investec plc includes the information for IBP. The information for Investec Limited includes the information for IBL.

^ The capital adequacy disclosures follow Investec's normal basis of presentation so as to show a consistent basis of calculation across the jurisdictions in which the group operates. For Investec plc and IBP this does not include the deduction of forseeable dividends when calculating CET1 capital as now required under the Capital Requirements Regulation and EBA technical standards. Investec plc's capital information includes unaudited profits for the last quarter. If unaudited profits are excluded from the capital information, Investec plc's CET1 and tier 1 capital ratios would be 50bps lower and its total capital ratio would be 40bps lower.

Liquidity coverage ratio disclosure

The objective of the liquidity coverage ratio (LCR) is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that they have sufficient high quality liquid assets to survive a significant stress scenario lasting 30 calendar days.

Investec Bank Limited (solo basis) and Investec Bank Limited Consolidated Group

The minimum LCR requirement in South Africa was 70% throughout 2016, and will increase by 10% each year to 100% on 1 January 2019.

In accordance with the provisions of section 6(6) of the South African Banks Act 1990 (Act No. 94 of 1990), banks are directed to comply with the relevant LCR disclosure requirements, as set out in Directive 6/2014 and Directive 11/2014. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord.

The following table sets out the LCR for Investec Bank Limited (solo basis) and Investec Bank Consolidated Group as at 31 December 2016:

 
                        Investec Bank       Investec Bank Limited 
                         Limited Solo        Consolidated Group 
                         - Total weighted    - Total weighted 
 R'mn                    value               value 
---------------------  ------------------  ---------------------- 
 High quality liquid 
  assets (HQLA)                    73,248                  73,333 
---------------------  ------------------  ---------------------- 
 Net cash outflows                 49,029                  44,031 
---------------------  ------------------  ---------------------- 
 Actual LCR (%)                    150.4%                  167.9% 
=====================  ==================  ====================== 
 Required LCR (%)                     70%                     70% 
---------------------  ------------------  ---------------------- 
 

The values in the table are calculated as the simple average of daily observations over the period 1 October 2016 to 31 December 2016 for Investec Bank Limited (IBL) bank solo. 61 business day observations were used. Investec Bank Limited consolidated group values use daily values for IBL bank solo, while those for other group entities use the average of October, November, December 2016 month-end values.

Investec plc, Investec Bank plc (solo basis)

On 1 October 2015 under European Commission Delegated Regulation 2015/61, the LCR became the PRA's primary regulatory reporting standard for liquidity. The LCR is a Pillar 1 metric to which the PRA apply Pillar 2 add-ons. The LCR is being introduced on a phased basis, and the PRA has opted to impose higher liquidity coverage requirements during the phased-in period than the minimum required by CRD IV. From 1 January 2017, UK banks are required to maintain a minimum of 90%, rising to 100% on 1 January 2018. The published LCR excludes Pillar 2 add-ons.

For Investec plc and Investec Bank plc (solo basis), the LCR is calculated using our own interpretations of the EU Delegated Act. The reported LCR may change over time with regulatory developments.

The LCR reported to the PRA at 31 December 2016 was 844% for Investec plc and 829% for Investec Bank plc (solo basis).

Johannesburg and London

Date: 03 February 2017

Sponsor: Investec Bank Limited

This information is provided by RNS

The company news service from the London Stock Exchange

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