Investec Ltd - Quarterly Capital Disclosures

RNS Number : 5386H
Investec PLC
01 August 2019
 

Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL

NSX share code: IVD

BSE share code: INVESTEC

ISIN: ZAE000081949

Investec plc
Incorporated in England and Wales
Registration number 3633621
LSE share code: INVP

JSE share code: INP
ISIN: GB00B17BBQ50

 

As part of the dual listed company structure, Investec plc and Investec Limited notify both the London Stock Exchange and the JSE Limited of matters which are required to be disclosed under the Disclosure Guidance, Transparency Rules (DTR) and Listing Rules of the United Kingdom Listing Authority (the "UKLA") and/or the JSE Listing Requirements.

 

Accordingly, we advise of the following:

 

Investec Limited - Basel III disclosures at 30 June 2019

 

Capital disclosures

The disclosures below are made with respect to Basel III quarterly disclosure requirements. Investec Limited 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%. Effective 1 April 2019, Investec Limited and Investec Bank Limited adopted the Foundation Internal Ratings Based (FIRB) approach for calculating regulatory capital. As such the below capital disclosures have been prepared on this basis.

 


Including unappropriated profits


Investec Limited*

IBL*

As at 30 June 2019

R'mn

R'mn




Common equity tier 1 capital

       38,366

   38,177




Additional tier 1 capital

         2,374

        920




Tier 1 capital

       40,740

   39,097




Tier 2 capital

       11,842

   14,688




Total regulatory capital

       52,582

   53,785




Risk-weighted assets per risk type:



Credit risk

      245,145

 242,547

Counterparty credit risk

         5,716

     5,805

Credit valuation adjustment risk

         3,817

     3,832

Equity risk

       23,232

   16,111

Market Risk

4,848

3,209

Operational risk

       31,617

   21,939

Total risk-weighted assets

      314,375

 293,443




Total minimum capital requirement

       36,239

   33,832




Capital ratios



Common equity tier 1 ratio

12.2%

13.0%

Tier 1 ratio

13.0%

13.3%

Total capital adequacy ratio

16.7%

18.3%

 

 

 

 

 

 

 

 

Leverage ratio disclosures


Including unappropriated profits


Investec Limited*

IBL*

As at 30 June 2019

R'mn

R'mn

Tier 1 capital

40,740

39,097

Total exposure

      533,877

 506,343

Leverage ratio

7.6%

7.7%

 

 

 

 


Excluding unappropriated profits


Investec Limited*

IBL*

As at 30 June 2019

R'mn

R'mn




Common equity tier 1 capital

36,703

37,040




Additional tier 1 capital

2,389

920




Tier 1 capital

39,092

37,960




Tier 2 capital

12,042

14,688




Total regulatory capital

51,134

52,648




Risk-weighted assets per risk type:



Credit risk

244,469

242,288

Counterparty credit risk

5,716

5,805

Credit valuation adjustment risk

3,817

3,832

Equity risk

23,232

16,111

Market Risk

4,848

3,209

Operational risk

31,617

21,939

Total risk-weighted assets

313,699

293,184




Total minimum capital requirement

36,161

33,802




Capital ratios



Common equity tier 1 ratio

11.7%

12.6%

Tier 1 ratio

12.5%

12.9%

Total capital adequacy ratio

16.3%

18.0%

 

 

Leverage ratio disclosures


Excluding unappropriated profits


Investec Limited*

IBL*

As at 30 June 2019

R'mn

R'mn

Tier 1 capital

39,092

37,960

Total exposure

533,607

506,240

Leverage ratio

7.3%

7.5%

 

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

 

 

 

Liquidity disclosures

 

Liquidity coverage ratio (LCR)

The objective of the 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.

 

The minimum LCR requirement in South Africa is 100% as of 1 January 2019, for both Investec Bank Limited (IBL) (solo basis) and Investec Bank Limited (IBL) consolidated group.

 

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. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord, as specified by BCBS d400 (2017) and Directive D1/2018.

 

The following table sets out the LCR for IBL (solo basis) and IBL consolidated group for the quarter ending 30 June 2019:

 


IBL (solo basis) - Total weighted value

IBL consolidated group - Total weighted value

High quality liquid assets (HQLA) (R'mn)

95,588

96,749

Net cash outflows (R'mn)

67,773

65,788

Actual LCR

141.4%

147.4%

Required LCR

100%

100%

 

The values in the table are calculated as the simple average of 91 calendar daily values over the period 1 April 2019 to 30 June 2019 for IBL (solo basis). IBL consolidated group values use daily values for IBL (solo basis), while those for other group entities use the average of April, May and June 2019 month-end values.

 

Net stable funding ratio (NSFR)

The objective of the NSFR is to promote the resilience in the banking sector by requiring banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities on an ongoing structural basis. By ensuring that banks do not embark on excessive maturity transformation that is not sustainable, the NSFR is intended to reduce the likelihood that disruptions to a bank's funding sources would erode its liquidity position, increasing its risk of failure and potentially lead to broader systemic risk.

 

The minimum NSFR requirement in South Africa is 100%. This applies to both IBL (solo basis) and IBL consolidated group.

 

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 NSFR disclosure requirements. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord, as specified by Directive 11/2015 and Directive 01/2018.

 

The following table sets out the NSFR for IBL (solo basis) and IBL consolidated group as at 30 June 2019:

 


IBL (solo basis)

IBL consolidated group

Actual NSFR

112.7%

114.0%

Required NSFR

100%

100%

 

 

Further disclosures with respect to Investec Limited's and Investec Bank Limited's capital and liquidity is provided on the Investec website as required by the relevant regulations.

 

01 August 2019

Sponsor: Investec Bank Limited


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