Final Results - Replacement

RNS Number : 7322F

Bankers Investment Trust PLC

18 January 2010

 



The issuer advises that the following replaces the Final Results announcement released on Monday 18 January 2010 at 0700 under RNS number 6723F.

The dividend payment date in Note 12 should have been 26 February 2010. All other details remain unchanged. The full amended text appears below.

Page 1 of 16

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

This announcement contains regulated information

MANAGEMENT REPORT

Extracts from the Chairman's Statement:

Chairman's Statement

It has been a classic year for Bankers' style of investing. Our Manager's careful use of different international markets has delivered results in line with the benchmark despite adopting a portfolio of stocks which were deliberately defensive. Your Board is pleased that in a period of extreme uncertainty our Manager has protected shareholders' funds by minimising risk on the down side without sacrificing performance. 

In fact if we look at the last decade it will be remembered as being unkind to investors, containing two bear markets and the second lowest period of equity returns, eclipsed only by the 1930's. However, I am pleased to say that your Company's record shows that the Net Asset Value over the past 10 years rose by 27%, which compares very favourably with a fall of 11% by the FTSE All-Share Index over the same period. The growth in our dividends has been even better, nearly doubling over the 10 years from 6p to 11.5p. 

Markets

Performance for the year was in line with our benchmark; the Net Asset Value rose by 17.3% while the composite benchmark rose 17.5%.

Share prices have shown an admirable resilience in terms of absorbing bad news and recovering from a period of exceptional turbulence in global markets. Economic output shrank far quicker than in previous recessions, reflecting how trade around the world is linked and how little inventory modern businesses carry. The collapse in trade lasted three quarters for most countries and a recovery in orders gained momentum early in the summer. Aggressive policy action by governments was required offering financial support to banks and programmes to boost consumption, with the cost of these actions being funded by increased deficits and quantitative easing, effectively printing cash.  

Economic growth resumed, at least quarter on quarter, in most major countries during the third quarter, although the UK remained in recession until the last quarter of 2009. Rapid cost cutting has mitigated the effects of a long term downturn in profits but recovery in revenues will take some time, as global trade appears to be 20% lower than at its peak two years ago. Interest rates in all developed markets remained at near zero levels for the whole year. Unfortunately banks were more pre-occupied with rebuilding capital and reducing leverage, meaning that the normal transmission process of lower rates leading to lending growth has not occurred. Despite record low interest rates, a secondary factor reducing lending is a degree of debt aversion amongst businesses.  

Until February, investors drove economically sensitive sectors like mining and highly indebted companies into a downward spiral, with the common view that many would fail. Equity markets bottomed in early March and, unusually, the subsequent rally was most pronounced in the same stocks and sectors that led the market down whereas normally a new bull market is driven by a different group of stocks. When governments recapitalised the banks, there was little incentive to foreclose on those loans where covenants had been breached and with interest rates low, many companies could continue to service their debt.  A further consequence of low interest rates has been a push by investors into alternative assets because the relative cost of holding non-interest bearing assets has never been lower. Commodity prices of everything from metals to foods have been huge beneficiaries from significant investment inflows into exchange traded funds (ETF's) and hedge funds specialising in commodities.  

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

Regionally there has been a marked difference in performance, with Pacific and Emerging Markets being the areas of greatest appreciation. Economies in these regions have been less affected by the need to bail out domestic banks and governments typically have fiscal surpluses with which to pump prime domestic activity.  China has kept investment spending high, which has benefited the whole Pacific region. By careful stock selection we have benefited from positions in mining, gold and financials, and a greater exposure to China.

The Japanese market behaved very defensively during the downturn and our stock selection favoured domestic companies, which fared better than the exporters. However, the upswing in markets left Japan behind as the economy struggled to cope with an expensive currency that impacted trade.  We are performing well relative to the local index but, although we reduced exposure in March, the recent performance has been disappointing and with hindsight a greater reduction would have been beneficial.

Europe has been a mixed bag but overall has performed far better than we expected given the rise in the Euro, which has yet to impact the region. While several countries like Greece, UK, Spain and Ireland have developed significant problems with fiscal deficits above 10% of GDP, the central core of Europe has held up well. The ECB has not been afraid to release liquidity into the banking system and coupled with less leveraged consumers in France and Germany, economic growth has bounced back in the third quarter. The UK economy being more reliant on financial services has required unprecedented levels of state aid to the banking system. The resulting recession in the UK is now the longest and deepest on record but the equity market has been resilient because of its international focus. Our performance in both Europe and UK has lagged benchmarks due to the narrow leadership of markets, which initially focused on banks and resource stocks. The increase in appetite for risk has led to an underperformance of our value investment style. We expect the market to rotate and return to rewarding companies that deliver real growth in earnings and revenue, rather than those offering recovery potential on expensive valuation multiples.

America suffered from the same issues as the UK, with a huge banking bailout and over-indebted consumers coping with falling house prices. The culture in the US is to deal with problems quickly and move on; therefore significant foreclosures and restructurings have led to unemployment over 10%. The recovery in US share prices in sterling terms has been our least rewarding investment area geographically over the last year. Our performance has also lagged the market for similar reasons to the underperformance in Europe, as a result of our policy of keeping our faith in higher quality businesses rather than favouring recovering cyclicals or financials.

Currencies remained volatile but generally have moved in our favour. A greater portion of our portfolio is now invested overseas than in the UK and weakness in Sterling produces higher capital values and enhances the value of dividends we receive.

Revenue and Dividends

Over the past year there have been significant cuts to dividends and the underlying dividend income from our UK portfolio is down nearly 20% from a year ago, although the reduction is less pronounced in our European and American portfolios. Overall, we have experienced a fall in total equity dividend income of 17% over the past year but we have offset this decline through increased underwriting income, increased fixed interest bond income and recent reclaims of VAT interest. Despite the difficult backdrop for income, our revenue earnings per share only fell by 7.3% and although a rapid resumption in dividend growth is unlikely, we do feel that this year's earnings per share should represent the low point from which growth will resume next year.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

We are recommending a final dividend of 3.0p, making a total of 11.50p, an increase of 4% for the year. This is slightly higher than the previous forecast rate for the year and extends our record of consecutive annual increases in dividends to 43 years. Importantly, in a difficult year when our revenue has fallen, we are still able to increase dividends above the level of inflation and retain a strong position for future growth by not calling on revenue reserves, as our earnings cover this year's distributions. At this point, we forecast an increase in the Company's total dividend per share for 2010 of not less than 4.3% to 12.0p.

Board Succession 

David Thomas steps down from the Board at the Annual General Meeting after serving almost ten years as a Director.  We have benefited from David's considerable investment experience, his wisdom and his attention to detail, particularly during the last two years as Chairman of the Audit Committee. We thank him most sincerely for his service and shall miss his contribution. We look forward to recruiting a new non-executive director over the next year. 

Annual General Meeting

The Annual General Meeting this year will be held at the offices of Henderson Global Investors, 201 Bishopsgate, London on Tuesday 23 February 2010 at 2.30 pm. As usual our manager, Alex Crooke, and his team will be making a presentation with regard to investment and all shareholders are most welcome to attend.

Outlook

I commented last year that the recession we were experiencing would be unlike any since the 1940's and judging from the scale of bank bailouts and government borrowings, the parallels are with the pre-war rather than post-war downturns. The challenge from this point is to determine the path for recovery and how economies will respond as liquidity is drained from the financial system. It is difficult to believe that this far from normal recession can be followed by a standard recovery.

A banking system that is short of capital and over leveraged will result in companies having less access to credit and cause economies to grow at slower rates than experienced over the last decade. However, in the very short term, the recovery from the dramatic collapse in trade at the beginning of 2009 will give the illusion that growth is returning at a healthy rate. Lower growth is not necessarily a bad backdrop for equities, as inflation should be subdued and interest rates will remain low. 

Quality companies worldwide represent good value and investors have abandoned them in a rush for recovery situations that may well disappoint over this year. We keep our faith in businesses that have invested into the downturn, that generate cash rather than consume it and have taken action to address any balance sheet weakness. This policy should reward patience and offer a safer path to a more sustainable recovery in asset values.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

Principal Risks and Uncertainties

The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

• Portfolio and market

Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move sharply. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on the shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.

• Investment activity and performance

An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.

• Tax and regulatory risks

A breach of Section 842 of the Income and Corporation Taxes Act 1988 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Company must also ensure compliance with the listing rules of the New Zealand Stock Exchange.  The Manager has contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirmed regulatory compliance during the year.

• Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including market price risk, currency risk and interest rate risk), liquidity risk, and credit and counterparty risk. Details of these risks and how they are managed are contained in the notes in the Annual Report and Financial Statements.

• Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.  Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal control section in the Annual Report and Financial Statements.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

Related Party Transactions

Investment management, accounting, company secretarial and administration services are provided to the Group by wholly owned subsidiary companies of Henderson Global Investors (Holdings) plc ("Henderson"). Global custody services are provided by BNP Paribas Securities Services. These are the only related party transactions currently in place. There have been no material transactions with these related parties, other than the investment in the Henderson Liquid Assets Fund, a money market fund, which have affected the financial position or performance of the Company in the financial year.

Statement of Directors' Responsibilities 

In accordance with Disclosure and Transparency Rule 4.1.12, the Directors confirm to the best of their knowledge that:

(a) the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

(b) the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board of Directors

R D Brewster

Chairman

For further information contact:                        

Alex Crooke Fund Manager The Bankers Investment Trust PLC Telephone: [phone]	Richard Brewster Chairman The Bankers Investment Trust PLC Telephone: [phone]
James de Sausmarez Director of Investment Trusts Henderson Global Investors Telephone: [phone]	Sarah Gibbons-Cook  Investor Relations and PR Manager  Henderson Global Investors  Telephone: [phone]

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

SUMMARY OF THE YEAR

	31 October 2009		31 October 2008		Change %
Consolidated Assets
Total assets less current liabilities (£'000)	473,863		410,661		+15.4
Net asset value per ordinary share	399.9p		340.8p		+17.3
Ordinary share mid-market price	347.5p		305.0p		+13.9
Discount (share price to net asset value)	13.1%		10.5%
Consolidated Revenue
Gross revenue (£'000)	16,866		18,613		-9.4
Revenue earnings per ordinary share	11.83p		12.76p		-7.3
Dividends per ordinary share in respect of the year	11.50p		11.06p		+4.0
Total Return
Total return per ordinary share	70.18p		(149.40p)
Indices (capital return)
FTSE All-Share Index	2,584.59		2,183.69		+18.4
S&P 500 Composite Index	1,036.19		968.75		+4.8	#
FTSE World Europe (ex UK) Index (£)	353.12		283.83		+24.4
TOPIX (Tokyo First Section Index)	894.67		867.12		+9.9	#
FTSE World (ex UK) Index (£)	290.33		249.12		+16.5
Composite Index (capital return)
50/50 FTSE All-Share Index/   FTSE World (ex UK) Index (£)	234.90		200.00	*	+17.5
Total Expense Ratio**	0.50%		0.47%
Retail Prices Index	216.00		217.70		-0.8

# £ adjusted

* rebased as at 31 October 2008

** excluding borrowing costs and VAT write-back

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

AUDITED CONSOLIDATED INCOME STATEMENT 

for the year ended 31 October 2009

		Year ended 31 October 2009			Year ended 31 October 2008
	Notes	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total  £'000
Gains/(losses) on investments held at fair value through profit or loss		-	66,848	66,848	-	(183,058)	(183,058)
Investment income	2	15,596	-	15,596	17,773	-	17,773
Other operating income	3	893	-	893	625	-	625
Interest on VAT refunds	3	377	-	377	215	-	215
		---------	------------	---------	---------	------------	---------
Total income/(loss)		16,866	66,848	83,714	18,613	(183,058)	(164,445)
		---------	------------	---------	---------	------------	---------
Expenses
Management fees	4	(982)	(529)	(1,511)	(1,108)	(597)	(1,705)
Write back of prior years' VAT	4	525	-	525	149	161	310
Other expenses		(562)	-	(562)	(531)	-	(531)
		---------	------------	---------	---------	------------	---------
Profit/(loss) before finance costs and taxation		15,847	66,319	82,166	17,123	(183,494)	(166,371)
Finance costs		(676)	(1,578)	(2,254)	(715)	(1,668)	(2,383)
		---------	------------	---------	---------	------------	---------
Profit/(loss) before taxation		15,171	64,741	79,912	16,408	(185,162)	(168,754)
Taxation	5	(1,797)	1,240	(557)	(1,935)	1,283	(652)
		---------	------------	---------	---------	------------	---------
Profit/(loss) attributable to equity shareholders		13,374	65,981	79,355	14,473	(183,879)	(169,406)
		=====	=======	======	=====	=======	======
Earnings/(loss) per ordinary share	6	11.83p	58.35p	70.18p	12.76p	(162.16p)	(149.40p)

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS as adopted by the European Union. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity shareholders of The Bankers Investment Trust PLC. There are no minority interests.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

AUDITED CONSOLIDATED AND PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31 October 2009

Consolidated year ended 31 October 2009	Called up  share capital £'000	Share premium  account £'000	Capital redemption  reserve £'000	Other capital  reserves £'000	Revenue reserve £'000	Total £'000
Balance at 31 October 2008	28,290	452	11,920	314,783	30,216	385,661
Buy back of 913,774 ordinary shares	(228)	-	228	(3,302)	-	(3,302)
Net profit from ordinary activities after tax	-	-	-	65,981	13,374	79,355
Ordinary dividends paid	-	-	-	-	(12,851)	(12,851)
	----------	----------	----------	----------	----------	----------
Balance at 31 October 2009	28,062	452	12,148	377,462	30,739	448,863
	======	======	======	======	======	======

Consolidated year ended  31 October 2008	Called up  share capital £'000	Share premium  account £'000	Capital redemption  reserve £'000	Other capital  reserves £'000	Revenue reserve £'000	Total £'000
Balance at 31 October 2007	28,544	452	11,666	502,803	27,555	571,020
Buy back of 1,015,740 ordinary shares	(254)	-	254	(4,141)	-	(4,141)
Net (loss)/profit from ordinary activities after tax	-	-	-	(183,879)	14,473	(169,406)
Ordinary dividends paid	-	-	-	-	(11,812)	(11,812)
	----------	----------	----------	----------	----------	----------
Balance at 31 October 2008	28,290	452	11,920	314,783	30,216	385,661
	======	======	======	======	======	======

Company year ended  31 October 2009	Called  up share capital £'000	Share  premium account £'000		Capital  redemption reserve £'000		Other  capital reserves £'000		Revenue  reserve £'000		Total £'000
Balance at 31 October 2008	28,290		452		11,920		315,689		29,310	385,661
Buy back of 913,774 ordinary shares	(228)		-		228		(3,302)		-	(3,302)
Net profit from ordinary activities after tax	-		-		-		65,981		13,374	79,355
Ordinary dividends paid	-		-		-		-		(12,851)	(12,851)
	----------		----------		----------		----------		----------	----------
Balance at 31 October 2009	28,062		452		12,148		378,368		29,833	448,863
	======		======		======		======		======	======

Company year ended  31 October 2008	Called up share capital £'000	Share premium account £'000		Capital redemption reserve £'000		Other capital reserves £'000		Revenue reserve £'000		Total £'000
Balance at 31 October 2007	28,544		452		11,666		503,709		26,649	571,020
Buy back of 1,015,740 ordinary shares	(254)		-		254		(4,141)		-	(4,141)
Net (loss)/profit from ordinary activities after tax	-		-		-		(183,879)		14,473	(169,406)
Ordinary dividends paid	-		-		-		-		(11,812)	(11,812)
	----------		----------		----------		----------		----------	----------
Balance at 31 October 2008	28,290		452		11,920		315,689		29,310	385,661
	======		======		======		======		======	======

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

AUDITED CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS

at 31 October 2009

	Consolidated 2009 £'000	Consolidated 2008 £'000	Company 2009 £'000	Company 2008 £'000
Non-current assets
Investments held at fair value through profit or loss	452,962	375,516	453,868	376,422
	----------	----------	----------	----------
Current assets
Investments held at fair value through profit or loss	13,500	-	13,500	-
Other receivables	2,207	15,332	2,207	15,332
Cash and cash equivalents	5,989	21,882	5,985	21,878
	----------	----------	----------	----------
	21,696	37,214	21,692	37,210
	----------	----------	----------	----------
Total assets	474,658	412,730	475,560	413,632
	----------	----------	----------	----------
Current liabilities
Other payables	(795)	(2,069)	(1,697)	(2,971)
	----------	----------	----------	----------
Total assets less current liabilities	473,863	410,661	473,863	410,661
Non-current liabilities
Debenture stocks	(25,000)	(25,000)	(25,000)	(25,000)
	----------	----------	----------	----------
Net assets	448,863	385,661	448,863	385,661
	======	======	======	======
Equity attributable to equity shareholders
Called up share capital	28,062	28,290	28,062	28,290
Share premium account	452	452	452	452
Capital redemption reserve	12,148	11,920	12,148	11,920
Retained earnings:
Other capital reserves	377,462	314,783	378,368	315,689
Revenue reserve	30,739	30,216	29,833	29,310
	----------	----------	----------	----------
Total equity	448,863	385,661	448,863	385,661
	======	======	======	======
Net asset value per ordinary share (pence) (Note 7)	399.9p	340.8p	399.9p	340.8p
	======	======	======	======

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

AUDITED CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS

for the year ended 31 October 2009

Reconciliation of operating revenue to net cash flow from operating activities	Consolidated 2009 £'000	Company 2009 £'000	Consolidated 2008 £'000	Company 2008 £'000
Net profit/(loss) before tax	79,912	79,912	(168,754)	(168,754)
Add back interest paid	2,254	2,254	2,383	2,383
(Less)/add: (gains)/losses on investments held at fair value through profit or loss	(66,848)	(66,848)	183,058	183,058
Decrease/(increase) in accrued income	439	439	(660)	(660)
Decrease in other debtors	1,278	1,278	824	824
Decrease in other creditors and accruals	(33)	(33)	(1,831)	(1,831)
Net (purchases)/sales of investments	(10,909)	(10,909)	23,516	23,516
Net purchases of current asset investments	(13,500)	(13,500)	-	-
Decrease/(increase) in amounts due from brokers	11,395	11,395	(9,793)	(9,793)
(Decrease)/increase in amounts due to brokers	(1,241)	(1,241)	1,038	1,038
Stock dividends included in investment income	(22)	(22)	(258)	(258)
	----------	----------	----------	----------
Net cash inflow from operating activities before interest and taxation	2,725	2,725	29,523	29,523
Interest paid	(2,254)	(2,254)	(2,383)	(2,383)
Taxation on investment income	(544)	(544)	(780)	(780)
	----------	----------	----------	----------
Net cash (outflow)/inflow from operating activities	(73)	(73)	26,360	26,360
Financing activities
Equity dividends paid	(12,851)	(12,851)	(11,812)	(11,812)
Purchase of ordinary shares	(3,302)	(3,302)	(4,218)	(4,218)
	----------	----------	----------	----------
Net cash outflow from financing activities	(16,153)	(16,153)	(16,030)	(16,030)
	----------	----------	----------	----------
(Decrease)/increase in cash	(16,226)	(16,226)	10,330	10,330
Cash and cash equivalents at start of the year	21,882	21,878	10,660	10,656
Exchange movements	333	333	892	892
	----------	----------	----------	----------
Cash and cash equivalents at end of the year	5,989	5,985	21,882	21,878
	======	======	======	======

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

NOTES:

1.	Accounting policies
	The consolidated and parent company financial statements for the year ended 31 October 2009 have been prepared in accordance with the International Financial Reporting Standards ("IFRSs") as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.  These comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ("IASC") that remain in effect, to the extent that IFRSs have been adopted by the European Union. The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the revaluation of certain financial instruments. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice ("the SORP") for investment trusts issued by the Association of Investment Companies ("the AIC") in January 2009 is consistent with the requirements of IRFSs, the directors have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP.
		2009	2008
2.	Investment income	£'000	£'000
	UK dividend income:
	Listed	6,894	9,432
		--------	--------
		6,894	9,432
		--------	--------
	Unfranked:
	Listed investments:
	Dividend income	7,012	7,414
	Interest income	1,668	669
	Stock dividends	22	258
		--------	--------
		8,702	8,341
		--------	--------
		15,596	17,773
		=====	=====
	Analysis of investment income by geographical region:
	UK	9,313	10,559
	Europe (ex UK)	1,799	2,291
	North America	1,294	1,243
	Japan	975	1,385
	Pacific (ex Japan)	1,722	1,826
	Emerging Markets	493	469
		---------	---------
		15,596	17,773
		=====	=====

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

		2009	2008
3.	Other operating income	£'000	£'000
	Bank interest	122	376
	Stock lending revenue	119	139
	Underwriting commission	652	110
		--------	---------
		893	625
	Interest on VAT refund	377	215
		--------	---------
		1,270	840
		=====	=====

At 31 October 2009 the total value of securities on loan by the Group for stock lending purposes was £11,583,000 (2008: £30,114,000). The maximum aggregate value of securities on loan at any one time during the year ended 31 October 2009 was £41,347,000 (2008: £83,485,000). The Group's agent holds collateral, which is reviewed on a daily basis, comprising Crest Delivery by Value ("DBV's") with a market value of 105% of the market value of any securities on loan.

4.	Management fees	Revenue  return 2009 £'000	Capital return 2009 £'000	Total 2009 £'000	Revenue  return 2008 £'000	Capital return 2008 £'000	Total 2008 £'000
	Investment management	226	529	755	255	597	852
	Accounting, secretarial and administration	756	-	756	853	-	853
		-------	-------	-------	-------	-------	-------
		982	529	1,511	1,108	597	1,705
	Write back of VAT	(525)	-	(525)	(149)	(161)	(310)
		-------	-------	-------	-------	-------	-------
		457	529	986	959	436	1,395
		====	====	====	====	====	====

5.	Taxation	Revenue  return 2009 £'000	Capital return 2009 £'000	Total 2009 £'000	Revenue  return 2008 £'000	Capital return 2008 £'000	Total 2008 £'000
	(a) Analysis of the charge for the year
	UK Corporation tax at 28% (2008: 28.83%)	549	7	556	585	-	585
	Double taxation relief	(549)	(7)	(556)	(585)	-	(585)
	Overseas tax reclaimable	(93)	(9)	(102)	(220)	-	(220)
	Tax relief on expenses charged to capital	1,247	(1,247)	-	1,283	(1,283)	-
		-------	-------	-------	-------	-------	-------
		1,154	(1,256)	(102)	1,063	(1,283)	(220)
	Overseas tax suffered	643	16	659	872	-	872
		-------	-------	-------	-------	-------	-------
	Taxation	1,797	(1,240)	557	1,935	(1,283)	652
		====	====	====	====	====	====

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

(b) Factors affecting the tax charge for the year The differences are explained below:

		Revenue return 2009 £'000	Capital return 2009 £'000	Total 2009 £'000	Revenue  return 2008 £'000	Capital return 2008 £'000	Total 2008 £'000
	Profit/(loss) before taxation	15,171	64,741	79,912	16,408	(185,162)	(168,754)
		--------	-----------	-----------	--------	-----------	-----------
	Corporation tax at 28% (2008: 28.83%)	4,248	18,127	22,375	4,730	(53,382)	(48,652)
	Non taxable UK dividends	(1,930)	-	(1,930)	(2,720)	-	(2,720)
	Non taxable scrip dividends and other income	(711)	-	(711)	(125)	-	(125)
	Tax relief on expenses charged to capital	(1,813)	-	(1,813)	(1,798)	-	(1,798)
	Income taxable in different years	195	-	195	(38)	-	(38)
	Overseas withholding tax suffered	549	7	556	600	-	600
	Expenses not deductible for tax purposes	-	-	-	3	-	3
	Special dividend taken to capital	12	-	12	-	-	-
	Tax charged/(credited) for use of capital expenses	1,247	(1,247)	-	1,283	(1,283)	-
	Capital (gains)/losses not subject to tax	-	(18,127)	(18,127)	-	53,382	53,382
		--------	---------	---------	--------	---------	---------
		1,797	(1,240)	557	1,935	(1,283)	652
		====	=====	=====	====	=====	=====

	(c) Provision for deferred taxation No provision for deferred taxation has been made in the current year or in the prior year.  The Company has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as it is exempt from tax on these items because of its status as an investment trust company.
	(d) Factors that may affect future tax charges The Company has not recognised a deferred tax asset totalling £2,118,000 (2008: £2,629,000) arising as a result of having unutilised non trade loan relationship deficits of £2,118,000 (2008: £2,488,000) and Eligible Unrelieved Foreign Tax of £nil (2008: £141,000). These expenses will only be utilised if the Group has profits chargeable to corporation tax in the future.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

6.	Earnings/(loss) per ordinary share
	The total earnings per ordinary share is based on the net profits attributable to the ordinary shares of £79,355,000 (2008: losses of £169,406,000) and on 113,068,847 ordinary shares (2008: 113,394,414) being the weighted average number of shares in issue during the year.   The total earnings can be further analysed as follows:

		2009	2008
		£'000	£'000
	Revenue earnings	13,374	14,473
	Capital earnings/(loss)	65,981	(183,879)
		-----------	-----------
	Earnings/(loss) for the year	79,355	(169,406)
		=======	=======
	Weighted average number of ordinary shares	113,068,847	113,394,414
		---------------	---------------
	Revenue earnings per ordinary share	11.83p	12.76p
	Capital earnings/(loss) per ordinary share	58.35p	(162.16)p
		-----------	-----------
	Earnings/(loss) per ordinary share	70.18p	(149.40)p
		=======	=======
	The Company does not have any dilutive securities, therefore basic and dilutive earnings are the same.
7.	Net asset value per ordinary share
	The net asset value per ordinary share is based on net assets attributable to ordinary shares of £448,863,000 (2008: £385,661,000) and on the 112,246,050 ordinary shares in issue at 31 October 2009 (2008: 113,159,824).

		£'000
	Net assets attributable to ordinary shares at 1 November 2008	385,661
	Total net profit on ordinary activities after taxation	79,355
	Dividends paid	(12,851)
	Buy back of ordinary shares	(3,302)
		------------
	Net assets attributable to ordinary shares at 31 October 2009	448,863
		=======

8.	Called up share capital
		2009 £'000	2008 £'000
	Allotted, issued and fully paid:
	112,246,050 (2008: 113,159,824) ordinary shares of 25p each	28,062	28,290
		=====	=====
	During the year, 913,774 (2008: 1,015,740) ordinary shares were bought back for cancellation at a cost of £3,302,000 (2008: £4,141,000).

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

9.	VAT on Management Fees
	In 2004 the Association of Investment Companies (the "AIC"), together with JPMorgan Claverhouse Investment Trust plc, launched a case against HM Revenue & Customs ("HMRC") to challenge whether Value Added Tax ("VAT") should be charged on fees paid for management services provided to investment trust companies. On 28 June 2007 the European Court of Justice delivered its judgement on the case in favour of the AIC. Since then, HMRC has accepted that the provision of investment management services to investment trust companies is VAT exempt and has acknowledged its liability to pay claims in respect of VAT borne by investment companies. The VAT borne by the Company on investment management fees invoiced for the period from 1 October 2000 to 30 June 2007 which was written back in the years ending 31 October 2007 and 2008 totalling £1,288,000 was all received in the year. The Company has also been able to recover further amounts in respect of the VAT charged on investment management fees in the period from 1 January 1990 to 4 December 1996 (following the decision of the House of Lords in the Fleming/Conde Nast case) amounting to £525,000, all of which has been recognised and received in 2009. The write back has been allocated to revenue return according to the allocation of the amounts originally paid. The Company has also received from the Investment Manager interest paid by HMRC on the total amounts recovered.  This amounted to £215,000 of interest received relating to the VAT reclaim for 2000-2007, which was recognised in the prior year, and £377,000 of interest received relating to the VAT reclaim for 1990-1996, and is recognised in the financial year ended 31 October 2009 (see Note 3).
10.	2009 financial information
	The figures and financial information for the year ended 31 October 2009 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts. The Company's annual financial statements for the year to 31 October 2009 have been audited but have not yet been delivered to the Registrar of Companies. The auditors' report on the 2009 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under section 498 of the Companies Act 2006.
11.	2008 financial information
	The figures and financial information for 2008 are extracted from the published Annual Report and Financial Statements for the year ended 31 October 2008 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985.
12.	Dividend
	A final dividend of 3.00p per ordinary share will be paid, if approved by shareholders at the AGM, on 26 February 2010 to shareholders on the register on 5 February 2010. The Company's shares go ex-dividend on 3 February 2010.
13.	Annual report and financial statements
	Copies of the Annual Report and Financial Statements will be posted to shareholders by the end of January 2010 and will be available on the Company's website (www.bankersinvestmenttrust.com) or in hard copy format from the Registered Office, 201 Bishopsgate, London EC2M 3AE.
14.	Annual General Meeting The Annual General Meeting will be held on Tuesday 23 February 2010 at 2.30 pm at 201 Bishopsgate, London EC2M 3AE.

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THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2009

LARGEST INVESTMENTS at 31 October 2009

The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows:

Rank	(2008)		Valuation 2008 £'000	Purchases £'000	Sales proceeds £'000	Appreciation/ (Depreciation) £'000	Valuation 2009 £'000
1	(1)	BP	15,217	2,592	-	2,221	20,030
2	(2)	HSBC	8,534	1,185	-	970	10,689
3	(8)	Petroleo Brasileiros	5,982	-	-	4,099	10,081
4	(5)	GlaxoSmithKline	7,445	1,609	-	596	9,650
5	(3)	Vodafone	8,086	-	-	1,048	9,134
6	(4)	Royal Dutch Shell	7,465	-	-	455	7,920
7	(6)	British American Tobacco	6,919	1,014	(1,090)	1,065	7,908
8	(7)	Catlin	5,988	1,429	(166)	638	7,889
9	(9)	BG	5,752	-	-	895	6,647
10	(16)	Rolls-Royce	3,589	-	-	1,381	4,970
11	(12)	Aviva	4,063	2,729	(2,913)	951	4,830
12	(14)	Mitsubushi UFJ Financial	3,822	1,367	(448)	(345)	4,396
13	(10)	National Grid	5,092	-	-	(702)	4,390
14	(11)	Scottish & Southern Energy	4,856	-	-	(540)	4,316
15	(*)	Wetherspoon (J.D.)	2,360	-	-	1,864	4,224
16	(13)	Jardine Lloyd Thompson	3,960	-	-	124	4,084
17	(*)	Bank of China	-	1,793	-	1,938	3,731
18	(22)	Reckitt Benckiser	3,132	-	-	510	3,642
19	(*)	Xstrata	1,424	567	-	1,582	3,573
20	(*)	Shire	2,662	-	-	822	3,484
21	(*)	DBS	1,840	497	-	1,065	3,402
22	(*)	ICAP	2,563	-	-	834	3,397
23	(25)	QBE Insurance	2,775	822	(924)	686	3,359
24	(*)	Smiths News	1,450	114	-	1,779	3,343
25	(20)	Novartis	3,210	-	-	98	3,308
			----------	----------	----------	----------	----------
			118,186	15,718	(5,541)	24,034	152,397
			======	======	======	======	======

These investments total 33.6% of the portfolio.

(*) Not in the top 25 last year.

DISTRIBUTION OF ASSETS AND LIABILITIES at 31 October 2009

	Equities	Convertibles	Fixed  interest	Current assets	Total assets		Total liabilities	Geographical exposure of net assets
	£'000	£'000	£'000	£'000	£'000	%	£'000	£'000	%
United Kingdom	207,938	-	19,079	16,986	244,003	51.4	(25,179)	218,824	48.7
Europe (ex UK)	39,037	-	-	1,734	40,771	8.6	(458)	40,313	9.0
North America	73,925	-	-	2,408	76,333	16.1	(158)	76,175	17.0
Japan	43,997	-	-	330	44,327	9.3	-	44,327	9.9
Pacific (ex Japan)	52,229	-	-	140	52,369	11.0	-	52,369	11.7
Emerging Markets	16,757	-	-	98	16,855	3.6	-	16,855	3.7
	---------	----------	---------	-------	---------	------	---------	---------	------
Total	433,883	-	19,079	21,696	474,658	100.0	(25,795)	448,863	100.0
	======	======	======	=====	======	====	======	======	====
Percentage	96.6%	0.0%	4.3%	4.8%	105.7%		(5.7%)	100.0%

Expense debtors and creditors have been allocated to sterling for the purposes of this table.

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