Investec Group

Ladies and gentlemen, good morning and welcome to this presentation of our Financial Year 2021 Results. I welcome you from Sandton.

I'm joined by Nishlan Samujh, on my left, our Finance Director. We'll start off with a quotation from Nassim Taleb, and I'm going to read it out to you; "Nature uses disorder to grow stronger, it's like going to the gym; you get stronger because you subject your body to stresses and gain from them".

It is self-evident that the year under review was characterized by significant challenges that arose out of COVID. So right at the beginning, I would like to thank our clients for their support, and also thank our colleagues for the work that they have done, they were dedicated to servicing our clients through a very tough year.

As we look at the year, we see an environment that is improving. I think at the end of the presentation, I hope you will take away the fact that our business has been very resilient, that our efforts to reduce complexity, to focus the business, and to improve capital allocation are beginning to bear fruit.

We will also be giving you a sense of how we see the future and we will provide both a near-term guidance of what we expect to perform like in the next year, but also give you a sense of what our commitment is to our stated medium-term targets. It will be clear from the results that we have seen a significant rebound in economic activity and that our business has done particularly well in the second half, with profits in the second half being more than double the profits that we registered in the first half.

So we take good momentum into the second half of the year. Going back to the macro environment that we have operated in, starting off with economic activity in our two core geographies in South Africa, we had seen a significant contraction last year as a consequence of COVID, with the economy contracting at about 7%.

We have begun to see significant rebound. And for the year, the calendar year, expectations are that economic activity will be at around 4%, 4.5%.

As the year progresses, estimates continue to improve. In the UK, we have similarly seen a very strong rebound with an even more optimistic outlook on economic activity for this year.

While economic activity is improving on a year-on-year basis, activity levels will be lower. So you will see that coming through in our results when we look at client activity.

We've also seen a strong rebound in financial markets. And in some cases we have seen, particularly in the US, indices at historic highs.

These levels of markets obviously will be supportive in our wealth businesses and also will affect positively the valuation of assets. Over this year, the exchange rate of dessert [ph] versus the rent, the average deteriorated by approximately 14%.

Two-thirds of our earnings are generated from Investec Limited, so those earnings would be affected when we translate them into our reporting currency, the pound sterling. We are beginning to see some indications that inflation may start, maybe picking up.

At the moment it is not clear whether that is transitory, the pickup that we see in inflation, or whether these inflation expectations are being anchored. So while we saw interest rates coming down and, therefore, affecting interest earned, the expectation going forward will be that we will see in the medium-term a rise in inflation rates.

Everybody's watching the U.S. 10-Year Treasury as we go forward.

Clearly, the optimism that we have for the recovery in economic activity is based on the progress that has been made on the rollout of vaccines across the globe. Clearly, more progress made in advanced economies and in emerging economies, less developed economies like South Africa, the rollout has not been as successful.

It's been slow. Thankfully, in South Africa, we have now started mass vaccinations, so the impact of COVID on the citizens of these countries where rollouts are slower will obviously be longer.

What is important, though, is that even though there is this progress, we have the risk of variants. As the saying goes, until all of us are safe, none of us are safe.

Now, looking at some internal data to validate the sense of recovery. If you look at our private banking lending turnover, on a month-on-month basis in South Africa, or you looked at a UK high net worth mortgage monthly turnover, you can see very pleasing growth in both turnovers.

We have seen the continued acceleration of momentum even in April, as we started, our FY 2022 year. Now, looking at the results at a glance.

Adjusted operating profit printed at £377.6 million, 9.9% behind the prior year. This good performance was supported by growth in funds under management where we recorded firm [ph] of £58.4 billion, a record for us.

We saw obviously a pickup in markets market levels. We saw very good net inflows of £1.1 billion in wealth businesses.

And we also saw a loan growth of 6.1% to a loan book, closing loan book of £26.4 billion. This good underlying performance was negated by lower activities as commented earlier, and also negated by the fact that we've had lower interest rates in the reporting period relative to the prior year.

We also saw disappointing losses of £93 million in a structured loan book as had been initially indicated in our interims. Thankfully, the overall loss was at £93 million versus the guided loss, expected loss of around £106 million.

So an improvement of £13 million pounds. For the year coming, we are guiding that we expect the loss from this particular book to be significantly reduced to less than £30 million.

Just again to restate, the loss is as a consequence of risk management costs as we dynamically hedge the book and risk reduction costs as we continue to sell down the book reducing the overall risk as it were. We are very pleased with the work that our colleagues have done but disappointed still to have recorded the loss.

Adjusted earnings per share came in at 28.9p which is 14% behind the prior year. Net asset value per share grew pleasingly at 11.1% coming in at 460.2p, this showing a strong capital generation by the businesses.

Return on equity was recorded at 6.6%, down from the March 20 return on equity of 8.3%. Obviously, these results do indicate the impact of COVID.

On the operating environment, our cost to income ratio deteriorated to 17.9%, this largely as a consequence of a reduction in revenues given the tough trading environment. Costs were well contained, with total cost reducing by 1.8%, and most encouraging fixed costs reduced by as much as 6.6%.

Our credit loss ratio reduced from 52 bps to 35 bps, which is inside of long-term, or through the cycle range of 30 basis points to 40 basis points. This was driven by the good quality of the book and also recoveries in particular, in a South African business.

Nishlan will go into a bit more detail on these numbers as we go into the presentation. So, I will -- I have talked about financial highlights so I'll move to the next slide.

Looking at divisional performance; starting off with our UK and other territories wealth and investment business, we achieved record funds under management of £41.7 billion. Again, as I said, we've benefited from a recovery in market levels, very good investment performance, and net inflows of £1.1 billion.

Really tremendous achievement in terms of net inflows. Adjusted operating profit was up 18%, rising to £74.3 million.

When Nishlan goes into the detail, we will report also on our UK domestic business, which is 97% of wealth business, which recorded operating margins above 25%. Really, very good achievement.

Moving on to the South African wealth and investment business. Again, that business performed very well.

Recording discretionary fund inflows of ZAR7.6 billion, a pleasing performance, and adjusted operating profit was up 10.6% to ZAR554 million. Our UK specialist banking business, as indicated, had at to endure the losses of the structured product book.

So when we see the reduction of £56.4 million to £44.8 million, that loss is largely driven by the £93 million risk management and risk reduction loss in the structured deposit book. What we see in the business though that is encouraging, is very strong loan book growth of 8.7% to £12.3 billion.

This number excludes the Australian book, which -- obviously, we exited the business at the end of March. We also right sized the cost structure of a UK bank during the course of this year, losing about 194 roles in the London office as part of that process.

Our private banking business in the UK is performing extremely well and is ahead of our own expectations. You will remember when we have the Capital Markets Day presentation, in February 2019, we indicated our strategic intent to invest in this business because we believed there was a clear market opportunity for us to capture in this space, and we are seeing fantastic results.

We will go into the detail of our performance a little later. Moving on to the South African specialist banking business, while the loan book was flat at about ZAR287 billion, we were very pleased with the performance of this business, just given how constrained the South African economy has been over the last number of years.

And given the very restrictive lockdowns that we saw, particularly in the first half of our financial year, we continue to attract clients over this period. And in fact, our clients proved to be very resilient, you will remember that we reported that at the peak of the pandemic, about 23.7 or so of our loan book was under some form of relief or so.

And by the time that we went to the end of the calendar year 2020, we had around 0%, really, of the loan book under relief, so a strong and resilient client base within the South African bank. We are very pleased that we were able to report profits that are marginally down at £4.9 billion in an environment of this for a banking business.

As you know, we have enhanced our disclosure and we have included a group investments pillar. Assets under this pillar have a carrying value of £847 million.

And as of, I think, Wednesday, the market value of those assets is around a £1 billion. So while we reported very strong performance of the underlying franchises, it is important to note that we do have in the investment pillar assets that carry significant value.

The group ROE for Investec PLC printed at 4% and for Investec Limited, printed at 9.3%. Right from its inception, Investec has lived by the motto that we live in society and not of it, and I think the founders have always been quite conscious of our responsibility as a business to be a good corporate citizen.

So, I am particularly pleased to report on our sustainability goals, and on our ESG. Generally, on the environment, we achieved net zero direct emissions.

This year, we launched a number of products that are climate-friendly during the course of the year. On social and society, we obviously had to step up quite significantly during the pandemic to support communities in which we operate.

The total spending on our charitable efforts and CSR amounted to 2.6% of our operating profit up from last year, a contribution of 2.3%. In South Africa, we continue to be rated level-one in terms of broad-based black economic empowerment contribution.

If we move to efforts on the employee side, we have enhanced our efforts on belonging, inclusion, and diversity. And our proportion of female senior leadership stands at 38%, an improvement over last year.

We have the transition, as you know, seamlessly into a working-from-home environment, and given the risk of a third wave in South Africa, we have encouraged people to revert to working from home almost exclusively until we are over the current phase. And data proves that we have transitioned from the third wave.

We are pleased to report that we were awarded the Best Company in the Workplace Practice recognition by SERAS CSR Awards. In our business, talent is important, culture is important, and it is really fundamental that even with the effects of COVID, we continue to look after our people and we continue to look after the culture that makes us distinctive.

Now moving on to what we have been doing strategically to improve the performance of the business. Under the mantra of simplifying, focusing and growing, we have continued to reduce complexity of the business.

We've exited our Australian businesses announced. This allows us to focus a lot more on our core geographies.

As said earlier, we also refreshed our executive teams in the UK bank, and in the UK wealth business. Ciaran Whelan and Ruth Leas will present later on today on what we have been doing in those markets.

I hope the high level overview I gave you of the two businesses and the underlying performance validates the changes that we have made in executive leadership. We've also closed and are running down the capital at-risk structure deposit business in the UK that led to the losses that we have referred to.

And we continue to make significant progress on capital efficiency and capital allocation. With respect to the reduction in the group investment portfolio, we have recorded asset realizations of about ZAR3 billion in South Africa.

As the environment improves, we think that we will be able to make more progress in reducing the investment portfolio in South Africa as we previously stated. We received approval to adopt AIRB on SME and corporate models from the 1st of April, 2021, giving us an uplift in capital ratios of 60 bps.

And as we go forward, and we have more models for approval, we would expect another 100 pips to 150 pips improvement in capital. So as we go forward, our business is well-positioned for growth.

We are substantially complete in terms of simplifying the business, reducing complexity, and focusing the business on key core geographies and key businesses where we have relevance, scale and competitive advantage. Our business is well capitalized, lowly leveraged, and we have significant and strong liquidity as we go forward, we're adequately provided as well.

And having gone through the simplification process, we now have an attractive market positioning in both geographies. I'm now going to head over to Nishlan, our FD, to go into the detail of the results.

Nishlan, over to you.

Thanks, Fani, and good morning to all my colleagues, and actually, good afternoon to some of our colleagues in Australia. And let's just unpack a little bit of what Fani has introduced.

I think, as he mentioned, our profitability, about 67% of the profitability coming from South Africa, with total revenue -- around 59% of our revenue being generated in UK and other. From a divisional contribution perspective, our wealth businesses contributed 25% to our underlying profits, with the specialist banking businesses contributing 67% and our group investments for the contributing 8%.

In the detail booklets that we've provided to you, we've also enhanced our disclosures and have unpacked the specialist banking business to give you a more clearer picture of the contribution from our private client's activities within the banking business. Overall, operating profit coming in at 9.2% below the prior year, at £1.6 billion.

And again, just to emphasize that with the weakening of the rand by about 13.4%, there is a material impact in terms of the weaker currency on these numbers. If I get into the each of the businesses, our wealth and investment business in South Africa grew funds under management by 32% to ZAR333 billion.

There was obviously net positive momentum on improved markets. But at the end of the day, we are highly encouraged by the quality of the franchise attracting net inflows of a discretionary nature of ZAR7.6 billion over this period.

And with a diversified revenue base, and operating income up by 7.8%, with -- whilst costs included investments for areas such as higher IT spend, and inflationary increases. Adjusted operating profit increased by 10.6% in the period to ZAR554 million.

Wealth investments in the UK, as Fani has indicated, close the record funds under management at £41.7 billion. And our UK domestic business accounting for about 97% of the underlying firm in the business, generating profits of around about £78.5 million with an operating margin of 25.2%.

That operating margin has continued to widen from the prior year, based on initiatives taken by the business which resulted in operating costs reducing by 3.7% over the period. Specialist banking business in South Africa, I think at the end of the day, the market impact of the lockdowns and the sharp reduction of the interest rates that we reported in the first half, you will see that as we close the year off, our lending books have actually closed flat, flattish year-on-year, and so have our deposit book.

I'll unpack a bit of this in some detail later on. Specialist banking business in South Africa, with net interest income reducing by 4.2% over the period, and net interest margin actually improved by about 10 basis points from what we reported at the half year, as the effects of the sharp decrease of interest rates by 300 basis points over the period has been balanced out by repricing across the book and a slight improvement on the net margin on our credit books.

Obviously in the period, notwithstanding the improving markets, we did see a slowdown in terms of transactional activity and, with some of the volatility improved, income from a trading platform perspective. Low investment income obviously continues to be a factor, particularly on our unlisted investment assets in this particular book.

Cost to income ratio at 55.7%, with operating income reducing by 3% and operating costs increasing by 1%, while below inflation. Specialist banking business in the UK continues to see strong growth in net core loans and advances, closing at £12.3 billion.

Obviously, there is the consequence of the sale of the Australian book. And once we factor that particular sale in the underlying remaining book producing a net increase of 8.7% in core loans and advances.

And again, I will unpack some of the detail a little later on, continued increase of our diversified retail deposit book by 5.2% to £16.1 billion. The bank in the UK, as we got to the end of the year, net interest income actually increased by 3.3% of the momentum in terms of increasing our average interest earning assets.

There have been strong equity markets, and that has effectively resulted in some strong fees earned within our equity capital markets to area and costs have been reasonably well contained in this business. Now, as Fani alluded to earlier on, the impact of the structure deposit book of £93 million is reflected within this particular business.

And in fact, if one had to, effectively for a moment, recognize the contribution of the underlying franchise, generating an ROI of 5.6%, an operating profit of £138 million, obviously, the weight of the impact of the structure products book bringing that down to £44.8 million pounds in the period. I think during the course of this week, some of our investments that we hold in the group investments portfolio reported and whilst we see a lower contribution from both our investment in IPF, there was strong ability of the business to be agile in terms of managing its balance sheet position, as well as clear evidence of taking opportunity of the current markets.

From an IP perspective, again, the severe lockdowns up to June in this financial year in the South African market impacting on the businesses, but again, we are encouraged by the recovery of revenue since then. Ninety One reported it's results two days ago, and again, reporting record growth in underlying funds under management, positively impacting our 25% holding in the investment.

Just to note that equity account, so it's effectively the change in net asset value that is represented on our balance sheet. These portfolio of assets effectively carry a capital requirement of about £463 million on an average basis, providing a return on equity in this period of 7.3%.

And there is still quite a material difference between book and market value. From a revenue and analysis perspective, I think on the top graph, you can see the impact of low interest rates, lower client activity overall, and in trading income, really, the impact of the structure deposit book.

Overall speaking, I think it is still relatively strong performance with operating income reducing by 4.4% on a currency neutral basis. The operating income mix, I think, still maintaining a high level of annuity income revenue at 77.6%.

From an earnings driver perspective, in this period, again, we recorded -- record from at £28.4 billion growing by 29.8% over the period. But I think what is fairly important is that with an experienced net inflows into the businesses, into our wealth businesses, of £1.1 billion over the period, obviously positively impacted by recoveries in the market, as well as investment performance on the portfolios managed.

Customer account is overall up by 6.9%, and core loans up by 6.1%. There has been a positive impact of currency, so actually increasing by 1.6% on a currency neutral basis, and just providing some color on our core loan book.

This particular slide splits out our book in terms of high net worth and private client lending properties and our corporate lending. And I think we're encouraged by the recovery of corporate lending in the second half of the year, just noting that there is still caution, while general optimism is starting to return to markets.

From a UK perspective, as we reported at the half year, we continue to see strong momentum in terms of growth around our private client and a high net worth lending. Again, corporate markets remaining relatively cautious, but noticing an improvement in terms of momentum.

From an operating cost perspective, Fani did indicate that our costs reduced by 1.8% over the period. Obviously, there is some positive impact of currencies in that number.

But overall, fixed operating costs reducing by 6.6% in the period, and our personnel cost increasing by 2.4%, by £20 million is the area where we dominantly carried the restructuring costs of around about £26 million that have been incurred. So with the closing costs run about £1.165 billion on an ongoing basis, at just over £1.13 billion.

Now, the initiatives that have taken place, and the sort of benefits from the restructuring will be reflected more in our 2022 set of results. Moving on to expected credit loss, I think here you do see the impacts of the virus and the momentum that has had on the economy.

I think this is our second snapshot in terms of COVID-impacted environment through its lifecycle. And you can see the sharp increase in expected credit losses in the second half of 2020, at £102 million, sort of reducing as we moved into the first half of this financial year to £66 million, as we remain cautious on the economic outlook.

But a lot of that pressure now subsiding and, therefore, impairment levels in the second half pretty much comparable to the first off. There have been some recoveries, particularly in our South African specialist banking business, that would have dampened debt ratio by about 8 basis points.

Now, if we look at the split out from a South African perspective, we saw our credit loss ratio of about 18 basis points reported in the first half of last year increasing sharply to 55 basis points in the second half. And in this period, coming in at an overall 18 basis point credit loss ratio.

From the bottom graph, if you look at the momentum of impairments, impairments of around about ZAR48 million in the second half, has been dampened by the positive effects of recoveries experience, pretty much additionally at a level of about ZAR200 million compared to normal levels that we experience. From a UK perspective, our credit loss ratio for the full year 56 basis points compared to 69 basis points last year.

And both in the South African and a UK perspective, whilst there is positiveness in terms of the economic outlook, there are still uncertainties that are factored into our modeling. And for that reason, they are very pointed overlays that we have continued to raise and continue to maintain the quantum of impairments raised on our balance sheet.

And this is reflected in terms of our balance sheet provisioning that is split out across the South African and the UK balance sheet. In South Africa, we did write off some of the older exposures that did have a higher coverage ratio in our stage three provisioning, as well as with the momentum, as you saw in the half year, with the momentum of some migration from stage two into stage three of higher collateralized assets.

We did see our coverage ratio reduced from 42.2% to 17.9%. I think what is pleasing in both the South African and the UK businesses is when you look through the detail, the sort of pressure in terms of migration from stage one into stage two and three felt in March 20, as well as in September 20, has very much subsided as you analyze the data into the last six months.

From a return on equity perspective, our capital base is pretty much evenly split between South Africa and the UK, with South Africa producing an overall ROI of 9.3% and the PLC at 4% in this period, 4.8% on a return on tangible equity perspective with overall ROI at 6.6% in this period. From a capital perspective, I think we've continued to see the capital position of both geographies strengthening with the CET1 ratio for Investec PLC at 11.2% and a leverage ratio at 7.9% in this period.

From an Investec perspective, the positive effects of continuing to migrate towards a IRB with approval to adopt IRB on our SME and corporate models contribution 60 basis point uplift in our capital ratios on a pro forma basis, because those rules really come into effect from April 1st, 2021. CET1 ratio at 12.8%.

We are not complete with that journey. There are still some models that we are yet to finalize and obtain regulatory approval.

So we still expect an improvement in our ratios of between 100 basis points and 150 basis points as we move through that. Now, I think from an outlook perspective, just contextualizing the underlying performance of our businesses, with the wealth businesses reflecting strong performance in this period and maintaining momentum, with the South African banking business reporting operating profit that is around about 1% lower than the prior year, and factoring in the impact of the financial products and elements, good momentum in our underlying businesses in the UK.

We remain fairly optimistic in terms of the momentum that we carry into the new year. We have provided you with a forecast that it's pretty early on and I do draw your attention to the sort of provisos that you see on the first page, which has got a list of provisos around putting out such a forecast.

But from where we sit, we see the momentum carrying on into the new year, and a growth of earnings per share from what we've reported at this period of 28.9p to a range of between 36p and 41p. Now, that does not mean that we're yet where we need to be, and the Group remains fully focused and committed to our medium-term targets of return of equity of 15% to 18% for Investec Limited, and 11% to 15% for Investec PLC.

So all in all, that is our results. And I will now hand back to Fani.

Thank you, Nishlan, for unpacking the results. What I would like to do now is just take stock of the changes we have made to the business over the last two years.

Investec has a 40-year heritage in private banking, corporate banking, investment banking, and wealth management. And it is in these areas that we are putting a focus.

We've also undertaken a process to reduce complexity and focus our investments in two home geographies, and run the business in an interconnected way. And as a consequence, serving clients better and achieving operating leverage.

We've made good progress on execution on the promises and the objectives that we set ourselves in February 2019. We have a domestically relevant and internationally connected banking and wealth group, focused on a few geographies where we can compete, where we have scale and relevance.

Again, I hope at the end of this presentation you will get a clear feel of what has been achieved and what we still have to achieve as we go forward, as Nishlan indicated. We are quite excited about the next 12 months in terms of the momentum that we see, and the improvements we have seen in our business, and we recommit to our medium-term targets.

Where were we in February 2019, when we relaunched Investec post-demerger. We obviously had a business that was underappreciated by the market, it was very complex in terms of its structure.

And we had a level of some inefficiency and capital allocation given how we have grown over time. And we wanted to make sure that we could look at capital allocation into areas and geographies where we could have the level of scale that makes us relevant and competitive.

And we wanted to make sure that we could invest in certain areas of future growth in a manner that would give us a runway over a long time. We had said to you at the time that our cost structures looked out of proportion with the sizes of the businesses that we had.

And we will go and try address that. And we said also that we wanted to develop a client ecosystem that allows our clients to benefit from the very good products and services that we offer, and that we would offer them with the highest service that we are known for, and that we would be supported by a digital capability that we continue to invest in, the so-called the high tech-high touch offering from Investec.

So what has that journey been? The journey started with the de-merging of Investec Asset Management, now separately listed as Ninety One.

You will remember that we distributed to our shareholders 55% of Ninety One. If you look at the current market value of Ninety One, a £2.2 billion, that distribution in the hands of our shareholders represents £1.25 billion of value placed back in the hands of our shareholders.

We then entered a period where we reviewed scale, we reviewed whether the business was -- businesses were caught or not, we reviewed geographies, and we also looked to refine our risk appetite. And we'll give you a sense of what we've been able to achieve in that regard.

The purpose of the simplification was to allow us to concentrate both our resources of capital and resources of talent into fewer areas, fewer businesses, fewer geographies, and therefore, enable us to serve our clients better. We called the approach towards building an ecosystem, a one Investec approach, because clients don't see the divisions and the silos that oftentimes our employees see internally.

We have had significant work done in a UK bank in terms of choosing the areas where we can win. And in fact, right sizing that cost basis well as part of the focus, emphasis in our business.

And obviously, when we spoke to you in February 19, we made certain commitments in terms of investment in growth. And as I reported earlier, a conviction around the private bank in the UK have been proven right.

Given the size of market share, we have been able to gain in the chosen area, and also not only the growth in turnover and book, but the risk at which we're doing it. Ruth will report to you later that our credit loss ratio in that business is around 4 basis points or 5 basis points.

So good growth in a market segment that is attractive. So post-demerger, a focus business in two geographies and specialist banking and wealth management, with leading -- market-leading client franchises rather, and providing high levels of service that are enabled by a strong digital platform.

And lest we forget, this business is no more or no less than its people and the culture that binds us together and enables us to be entrepreneurial, gives people a sense of ownership in what they do, and a dedication to our clients that we've always had over the last 40 years. We obviously did say two years ago that we will have a number of initiatives that we will pursue to create value and to get to a point where we can generate returns that are in excess of our cost of capital.

I won't rehash those initiatives. So what I would like to do now is take some stock of our numbers over the last three years or so.

You will see that we moved from financial year 2019, from an adjusted EPS of £48.7, to where we are today, given the impact of COVID. And we've guided to a strong recovery, to adjusted EPS of between £36 and £41, as we said we are seeing good momentum in our business.

We also see that costs have been well contained in the period, if you look at where our costs were in 2019, £1.277 billion to £1.165 million, you will realize that in the number £1.165 billion, there is £26 million of restructure costs. So continuing improvement in the cost base, and the benefits will come through as we go forward.

You can see there that impairment picked up from £66 million in financial year 2019 and as a consequence of COVID, more than doubled. And we are now beginning to see impairments abate and, if the economic recovery persist, we will see further improvement in that line.

We have talked at length about the quality of our book, and the resilience of our client base. You will also see that we have kept the weighted average number of shares outstanding relatively flat and in fact, decreasing.

Two years ago, the number was £942 million, and we are now at £929 million, because our shareholders have given us feedback that continually issuing shares and diluting them was not acceptable, and we decided we will focus on this issue and improve what we do on it; there is the track record. You will also see that two years ago, we started off with a capital base of £3.9 billion, we are now at a capital base of £4.255 billion; so a business that generates capital quite strongly as we go forward.

Because as Nishlan was saying, we have better efficiency in terms of capital in South Africa, we will have excess capital in the business also resulting out of the reduction in the investment portfolio. So there is a level of optionality in terms of excess capital that has been generated by the business, I think it is really quite important to look at these numbers and to take stock.

Now, moving on to one of the initiatives that we had committed to of capital discipline, really, by that we mean taking capital away from businesses and geographies where you cannot generate a good return, or where the risk is simply too high for what we're trying to do, and re-investing that business in those areas. So reinvesting that capital in those areas, where we can make returns in excess of our cost of capital.

So we will go into the next slide where we show the exits that we made over the last two years, and I've talked about the reduction in the South African investment portfolio of 3 billion over the year. That portfolio, the South African investment portfolio, generates a return of 2.8%.

As we reduce that portfolio and reinvest in the client franchises where we have significant returns, we will see a pickup overall returns. As stated already, the investment portfolio has a market value at 18th May of a £1 billion and the capital held against that portfolio is £463 million.

Over this time, we have continued to refine our risk appetite to make sure that we can protect our balance sheet. In essence, we have continued the efforts to diversify and granularize the loan book, and also to avoid outsized exposures because those can hurt you when things do go wrong.

We've talked about the transition to adopting a full IRB, and we have indicated that we expect between ZAR3 billion and ZAR4 billion of capital to be released as a consequence of that migration. So on this next page, I'm not going to spend too much time talking about what we have been able to achieve over the two years.

Needless to say, we have done significant work on moving to FIRB, now moving to AIRB on certain of the portfolios. We have closed and are running down our business in Hong Kong, the risk was simply too high there.

We've closed Click & Invest because we didn't believe we could get to scale and we were making losses of approximately £15 million per year there, sold a sub-scale wealth and investment business in Ireland, and we've improved our position in India by entering into a joint venture with the State Bank of India. So, we will be growing there without the need to deploy more capital, and we will have access to the vast client base and connection of the State Bank of India.

And of course, they have a massive balance sheet as well. So you can see what we have done there.

And lately, we have announced the exit from Australia, because we had been in Australia for a long period, had built a good brand equity and a good business. But we were not generating the levels of return that we needed, or the size to be able to absorb losses that do come through from time to time.

And this slide goes through the same issues in a different manner, so I wouldn't go deep into that slide. Now I would like to move on to the second pillar of the strategy that we have been executing, that being growth.

So how do we think about growth? We chose clear and scalable opportunities that we wanted to pursue to deliver growth.

One of those, of course, was the private banking business. The next slide will show you a number of other growth initiatives that we are pursuing, that we believe will be scalable and will increase our revenues over time.

And we also wanted to grow with discipline. In other words, stay within both the strategic trend lines and our risk appetite as we do so.

I commented on the significant growth in the private bank, and yet at a risk cost, that is really quite competitive. As we go forward, we do acknowledge that with the demerger of Asset Management, the mix of revenue has shifted significantly towards capital-heavy.

So strategically, we would like to increase the contribution of capital light businesses both in the bank and on the wealth side. So if you want to see how we thinking about the business, this is where we will be going in the future.

We think there are opportunities in particular, in the UK wealth space, where there's a level of consolidation, opportunities for small and bolt on acquisitions. And at some point, and we think the time may be right now, bigger scale consolidation.

Our business is strong there. We've made serious progress over this year and Ciaran will talk about it a little later.

So we should have the opportunity to participate in any consolidation that occurs in that market. As we go forward, we obviously will look at strategic partnership.

As an example, in South Africa over the last 12 to 18 months, we entered into a strategic partnership with Goldman Sachs on equity distribution, and we have moved significantly into a leadership position by partnering and bringing our strengths together with the strength of a leading player like that. I mean, it's an example what opportunities could exist going forward.

There are pools of clients that we could service without necessarily going into certain other businesses. So this is how we are thinking about strategic partnerships as we go forward.

We will be spending on our technology side for growth; there's a latest slide where I will show you that as we go forward, we want to move our spending from business as usual, to technology spending that is true spending, technology spending, very supportive of growth. Over this period, we have seen total revenues from new growth initiatives of £273 million.

SA -- the SA business generated approximately £4.2 billion of those revenues. So, in the long-term, this is an area that is really important as we go forward or front footed and we are not internally focused as we have been over the last two years or so.

Here are a number of growth initiatives that are at an early stage. As an example, in the UK, we have launched digital banking offering in terms of deposit taking channel and we have a number of other similar channels that we are developing there, I've talked about the UK Private Bank.

And if you look at what we have been doing in the past, we obviously have invested Investec for business in South Africa, we have been supporting our life business, as you know, and our wealth business in South Africa is significantly internationalizing given the needs of our clients. So a number of growth vectors that we are excited about.

The mindset is that of a business that can grow and compete as we go forward. Moving on to cost discipline.

I've indicated on the slide earlier, the progress we have made on containing costs over the last few years indicated also that in the current numbers, £26 million of restructuring costs have been absorbed and we will see the benefit of that going forward. Unfortunately, restructuring does lead to job losses and we obviously have had to make some of these decisions with very heavy hearts.

The exit of Australia has indicated the reduction of about 194 roles in our UK bank. So we've taken tough decisions, and we understand obviously and regret the impact on our colleagues as we move forward.

Group costs over this period have reduced by 28% and the South African cost base, within an environment where inflation is generally expected to be 3% three and 6%, continues to be well managed. And as I said, we expect more operating leverage and the benefits of the work we have done as we go forward.

Without taking too much time, let me just give you a sense of how we are thinking about operating leverage. There are certain capabilities that we can share as a Group.

As an example, we have a world-class client support center that is based in South Africa, and services our clients across the globe. Similarly, when you look at global lending operations, we are able to service our businesses in a manner that enhances operating leverage.

I'll leave the slides there for you to have a look at some of the other initiatives that we are engaged in to improve our operating leverage. One of the key initiatives that we have pursued is that of making sure that we have a connected client ecosystem that is supported by a digitalized technology platform, both cross-border and in country.

And we have seen improvements, for instance, in the number of private bank clients that wealth clients and vice versa, a number of clients in South Africa in the private banking space that are now clients of the UK private banking business. We're seeing significant progress, but there is a lot more that we need to do in this space.

But we are committed both to measure our progress and to invest to make sure that we can be successful. This serves clients better, this is not just about cross-sell.

This is about servicing clients and giving them the best that Investec can offer. So we've been on a journey towards digitalization over the last few years and we've made significant investments.

And when you look at what we spend on technology, approximately £200 million and there has obviously been some reduction, because we have been combining certain teams as an example in the UK, between bank and wealth, we have made certain decisions there and combined teams. And in some instances, we have moved some of our resources to South Africa to support the UK business.

So there have been some savings that have been generated in that space but this is an area where we have to continue to invest. So, the journey we foresee is that we will move over time to a 60% to 40% split in terms of growth supporting expenditure, versus just normal running expenditure on technology.

Clearly, our client experience can be enhanced by technology as much as we will remain a high touch business as we go forward. We've made the lives and we continue to make the lives of our colleagues easier through technology, and during the pandemic, we were able to seamlessly transition into a working-from-home environment.

So the quest to modernize our infrastructure continues. And we have made a decision to go with Microsoft in terms of technology partner as we go forward.

And in certain instances, we will partner with FinTech, as an example, within the UK banking business, I talked about a deposit channel, we also looking at a transactional banking channel that we can deploy using certain capabilities from a FinTech partner. So, we're thinking transformational in terms of what we can do in this space.

And we also hope to support innovation in how we move the business forward, so excited about the progress we have made to support our business. In conclusion, because I can see that Tess [ph] tells me that I'm beginning to run out of time, we've paved the runway to pursue the growth of our ambitions.

We've dealt with issues that we believe constrained our business. I colloquially say to my colleagues that we've taken a phone out of the zebras hoof, the zebra can now gallop with a lot more determination as we go forward.

I know Steven used to like to use these euphemisms about the zebra. So I think the zebra is much more confident.

And we have invested where we needed to invest, we've taken significant action on right-sizing the cost structure. We expect to continue to make progress around efficiencies as we go forward.

I've spoken about operating leverage in the business. And we are seeing the benefits of improved capital allocation in that we are investing where we have scale, where we have relevance, where we are competitive as a business.

We've realized ZAR3 billion of the SA Investment portfolio, the environment is more supportive with respect to that. We are also seeing efficiencies in terms of IRB.

So we do expect that there will be a level of excess capital that we generate. And that gives us optionality on what to do with that excess capital as we go AIRB £3 billion to £4 billion, and you have a sense of the size of our investment portfolio and the capital tied in that portfolio.

And businesses as we say, as a consequence of the actions we've taken are well-positioned to pursue the growth initiatives that we have set ourselves; excited about the future that lies ahead of us. This gives us the confidence to recommit to our medium-term targets of generating ROIs for the Group of between 12% and 16%, and in South Africa returns in excess of -- the local cost of equity returns of between 15% and 18%, in the UK, returns of between 11% and 15%.

The progress we've made on cost containment gives us confidence that we should get the overall group cost to income ratio to below 63%. We will intend to keep our CET ratio above 10%.

And in terms of dividend payout ratio, we intends to keep that between 30% and 50%. This year, that ratio is 45% as we reported.

While internally, we will continue to focus on subsidiary metrics and targets, in the public, we will focus more on the Group and on Limited and PLC. So finally, in conclusion, we continue the heritage that we've had in 40 years in the businesses that we have chosen to be in, and in the geographies that we have now scaled back to focus on.

We are dedicated to our purpose, that of creating, enduring worth, living in - not of society, we have a strong culture of entrepreneurship and thus in the end, our people, is what will set us apart from the competition and give us success in what we have chosen to do. Our people are motivated, they are talented, and they are empowered to serve our clients.

Clients have always been at the center of everything we do. Steven used to talk about our motto, a motto of breaking China [ph] for our clients, that we will do everything possible to make sure that we can service the needs of our clients.

So we are excited about the future that lies ahead of us. And we are grateful that we've had two years to execute on the plans that we've had, and we are clear about what lies ahead in terms of further execution.

We are hopeful about the recovery that we are seeing in the economies and the momentum in our businesses as we go forward. We're happy to take some questions from firstly the conference call.

Sorry we took a bit long, but it was really important for us to go through the detail that we have.

Okay, we will get back to the call later. Tess [ph], do you have some questions there from your line?

Yes, we do. Reddy Abbey [ph] from Merchants Investment.

Please could you give a breakdown of one your UK cost of equity? Then, two; SA cost of equity?

And three, blended cost of equity?

Nishlan, do you want to take that?

Yes, I think in terms of cost of equity, we would say in the UK running at around about 10%. Obviously, some will factor in a small element for risk premium in South Africa around about 14%.

And that's effectively where we blend towards the 12%, 12.5% percent.

Okay, next question is from Mark from OysterCatcher, when will you consider selling down the Ninety One holding?

Look, we've indicated that we are not a strategic holder of the business. We are pleased with the performance of that business.

Again, just to repeat, we had indicated pre-demerger, the 10% of that stake will be regarded as part of the capital of the PLC. So the excess for this purpose is 15%.

So we will make decisions as we see fit over time. We wouldn't really ever want to publicize or advertise what we tried to do there.

Needless to say, we are not a strategic long-term shareholder of the business

Hamato from Sampada [ph]. Please share more color, information and expectations regarding the non-discretionary outflows, and also the trend of fees in the wealth management division?

Nishlan, do you want to take that?

Yes, sure. I think as we've indicated, there was about ZAR8.5 billion of outflows in our wealth South African business, but at the same time, inflows to our discretionary portfolio of about ZAR7.6 billion, and a fair amount of those outflows being captured in into the discretionary portfolio.

I think at the end of the day, non-discretionary is non-discretionary. We generate good levels of earnings across that portfolio; so it is very relevant for us.

But it is a portfolio that is managed by clients. And I think when you go through a scenario that we've gone through, which at the end of the day, I think I'd be grateful if we experienced this once in our lifetime, I think to see this type of momentum in terms of overall management is pretty normal.

Okay. Chris from Ninety One.

Please, could you unpack the earnings contributions of Investec Property Fund and Investec Australia Property Fund?

Sure. I don't have the absolute numbers in front of me, but Investec Property Fund was a slight loss in this financial year.

And that's a function of reduced rental income experienced, as well as some negative valuation movements, particularly on the South African portfolio, offset by gains on the European logistics portfolio. And from an Australian Property Fund, you would have seen a yield of about 35%.

There is zero carrying value at the end of the year, because we realize our portfolio, and that business has now been called Iron Gate. And all in all, I would say, probably -- I can't remember the exact number, but odd ZAR100 million.

Jared from Allwither [ph]. Do the medium-term group targets include the stake in Ninety One at the current level of ownership?

Yes, they do. I mean, obviously, as we plan forward, your plan on the basis of the portfolio that you have, to the extent over the medium-term, we are not a holder.

Clearly, that capital will either be returned or, as I said, our orientation would be at the moment to look to grow our capital light revenues within -- in particular, the wealth business and potential also in the bank. But you have to plan on the basis of what you have today.

Thanks, Tess [ph].

Okay. We have one more from Nick, Signal AM [ph].

It's a very long question. I'm trying to understand why INP trade is at a 5% premium to INL.

Investors have always been told that the economic interests of both entry point are the same, yet the share register shows that sophisticated asset managers are prepared to pay a premium for INP. Surely it would be naive to think that these investors are paying these premiums without receiving an economic benefit.

I think Tess [ph], you know, to respond to that question, at the end of the day, it is markets. The INP share is listed in the UK market, the INL share is listed in the South African market.

I think sometimes you are influenced by momentum of buying and over this period there was a greater momentum on the INP share. So beyond that, I think it is -- you know, at the end of the day, pretty much driven by shorter term demand traits, but recognizing that there is a difference in terms of where the shares are listed.

Okay. We're taking the last question, it's from Mohammed from Sentio [ph] Capital.

Can you elaborate on the capital light growth; you will be driving the growth pillar on and how you see the driving in our or in the periods ahead?

Yes. Let me take that.

I mean, obviously, as I said, we are quite conscious that with Ninety One demerged the mix of revenue is much lower; so in the bank you will have certain businesses that are capital light. I talked for instance about our equity distribution joint venture with Goldman Sachs; we have some advisory businesses equally that generates that non-capital heavy revenues.

On the wealth side, obviously, there are more opportunities, both to improve in the UK -- more improvements in performance but also to participate in a market that is consolidating, just given the cost structure of that industry and some of the headwinds, for instance, regulatory costs, technology costs and alike. So, it will be a mix of internal opportunities that we pursue in the bank and opportunities that we pursue in the wealth business.

As an example in Henry's business, the SA Wealth business, part of the growth is the internationalization that we see that that business has committed to. So there will be a number of vectors that we pursue to increase the revenue mix.

Thanks, Tess [ph]. Do you have any calls from the conference call?

Mr. Titi, we have no questions on the audio line.

Yes. I think on that basis, let's just conclude by saying that we've had -- what we believe has been a good performance in a very tough year, affected by COVID.

We are encouraged by the recovery in economies across the world. Obviously, spurred by the outlook on vaccination; we do understand the near-term risks of variants, and in South Africa, specifically, that the process of rolling out the vaccine is still at an early stage.

So while we have to have caution around that, we are encouraged by the momentum that we have seen in our business, and our people are very optimistic and excited about the challenge to continue to build the business. The efforts to reduce complexity to focus the business on where we can compete and win, and the efforts to improve the allocation of capital have made significant difference, and we hope to see the benefits of those as we go forward.

So, thank you so much for listening in, and for participating. The results; I almost forgot.

We will take five minutes. In South Africa, the time is 11:16.

We will start at 20 past 11:00 with a presentation of the UK business, both the bank and the wealth business. And in the UK, obviously, it will be 10:20 when we restart.

Thank you very much.

Good morning, everybody, and good morning to my colleagues in London. I'm presenting from Sandton.

My colleagues told me that this is the hot seat because we are going to talk about our international business, which is mainly the UK at the moment. So, I will present a bit of an overall picture and then I'll deal in detail with the Wealth business and my colleague, Ruth who will deal with the bank.

So yes, it is the hot seat, but we think it's hot for a different reason. Because it's an exciting hot seat, not hot because it's problematic.

So, we have always believed in our international business at Investec for a couple of reasons: one, it was good for our business model; and two, we always use it to follow our clients and that's why we went to various different geographies. We have refined that in the past.

Australia was one, Israel was another. We have exited those geographies and our core international businesses is now the UK with satellite branches in some other regions that complement our UK business.

And we know that the international business outside of South Africa has caused concerns and valid concerns because our results have been problematic. We've had lots of once-offs, some positive but largely negative in the past, which have really dragged than what we believe are results from a very credible and exciting franchise business.

So, hopefully today, we can show that we have realigned our international businesses, particularly our banking businesses to show much more focus on discipline and we are sticking to our knitting in our key core geographies, which as we talked about, we've exited Australia, and we've done a deal in India, we've exited our Hong Kong businesses, we backed to our key geography being domestic UK, and then partly into Europe. I think we will also look at showing you that we have a unique position in the UK.

And I'll show you a slide in a moment or two where we think we are positioned -- what we think it is unique, which will enable us to deliver in our businesses and improve our profitability and our returns to get to the stages that Fani has talked about earlier. Our Wealth business has seen significant change in leadership in the past year, but we do believe that we are in a really good space now and hopefully, we will show you as we go through our presentation -- that the combined business makes a hell of a lot of sense.

So that's what we're going to try and demonstrate today. So, when I say it's the hot seat because most of you analysts and shareholders have said to is, 'Why are you there?

Get out.' We think that it makes a hell of a lot of sense, and we have listened to what you've said, and we have redefined our businesses and hopefully you will see that today.

So, if I look at the PLC, I'm going to skip through slides. This is where we think we are positioned.

So, we are not competing head on with those big domestic UK and bulge bracket players. We believe that we have a lot more depth of product and services both in terms of business needs and personal needs than some of the nice players.

So, we are there above the niche players, below the bulge bracket players and we really believe that that is a position that we can compete successfully and deliver for our clients and our shareholders. I'll go back to some of the key things we are domestically relevant and we internationally connected.

We are there for the corporate clients and it's the mid-market clients with entrepreneurial mindset to be their long-term partner. We are there for our ambitious affluent and high net worth clients that want to create and optimize their Wealth.

Ruth will talk about our private banking offering, I'll talk about our Wealth offering and our very compelling offerings for the target market that we are looking at. This slide is a really interesting slide, I've given away the answer.

But if I asked you, where do you think we fit in terms of gross revenues in the UK with what are hundreds, maybe thousands of financial institutions? In terms of revenue -- and we've only been there for about 30 years -- we sit at Number 9 in the UK.

The one to nine are the big balls, racket players where we do not compete head on with. They are the traditional High Street banks.

So, we are Number 9 after 30 years. Our challenge, and that's what we've been addressing is to take that Number 9 in terms of revenue, and convert that into bottom line results.

So, we have to avoid the once-offs that we've had and we believe that in the restructuring that we have done, that we will be able to achieve that going forward. That is a really credible performance after 30 years starting from nothing.

So, that's our opportunity and that's our challenge and that's what we've been trying to do and I hope that at the end of this presentation, you will see that we have the mechanisms in place to achieve that. Quickly on our business model.

It's capital light and capital heavy in the bank. Capital light being our Wealth business in some of our banking businesses.

Our revenue is based approximately 52% is capital light. The balance been in our banking business.

I love the comments that we got this morning. One about that our PLC share price is higher.

That shows something, but that 'Nishlan nor Fani are not strategic holders of the Ninety One stake, they're going to give the money to the Wealth business in the UK' and we are going to spend it wisely. Because there are lots of opportunities as I will talk about later on the Wealth businesses.

There's lots of consolidation opportunities that we're seeing. So, I'm delighted that the purse is open, and that we are cared recipients of that money, should it come.

So, that's a very high-level. We are excited.

Yes, it is the hot seat, but we are very excited about what we are doing and it has been a torrid couple of years. It really has.

The work that all our colleagues have done -- I'm talking about the UK now, particularly in the UK, where we went from completely in the office to completely out of the office overnight in March last year, and we haven't dropped the ball and we've done significant change in that period. So, I thank all of my colleagues.

I'm going to hand over to Ruth now, who will take us through the UK bank. I will then deal with the UK Wealth business, then we'll have some closing remarks, and then happy to take some questions.

So, Ruth, over to you.

Thank you, Ciaran, and good morning, everyone, from London, and thank you all for joining us this morning. It's a pleasure for me to be speaking with you today.

Not only on the progress that we've made in the UK bank, but also how we see the future. As Fani has already alluded to, the past year has been an extraordinary period to navigate through for the Investec group as a whole and for the UK bank in particular.

Despite the headwinds faced by us, as well as the rest of the world, I've seen so much over the past year that evidences the optimistic, entrepreneurial, can-do spirit of our investing people. It was only because of the tremendous commitment of our people that despite this unprecedented difficulties we were up against, we grew market share across many of our businesses.

We continue to invest in people and technology while being risk-conscious and protecting our balance sheet. We came into this crisis with a strong balance sheet, lowly leveraged with strong levels of capital and liquidity and we were able to support our clients as a reliable credit provider.

In spite of the challenges around us, we will open for business all the way through. We were also be able to support our people and the communities in which we live through a number of initiatives, including supplying 18 food banks across the UK with essential supplies and generous donations by my colleagues across Investec around the world.

What I've seen during this time of crisis has reminded me why I joined Investec 23 years ago and has given me tremendous optimism for the future. Today, I'm going to give you a summary of the actions we've taken over the past year to position the bank for growth and for greater efficiency, enabling us to create long-term shareholder value.

But most of the presentation is going to be about what differentiates Investec bank in the UK from our competitors. Why we are positioned to win here in the UK market, and importantly, how we see the equity story for the future.

The past financial year was the time we had to show fortitude, having strong results to act and to drive change. We knew we needed bold action, we needed to simplify and reduce complexity and make sure our focus was clear.

I'm going to spend quite a long time on the first pillar on the slide to unpack this in detail for you so you may see it for quite some time. Everything we've done in the financial year to March 2021 has been to position ourselves for growth -- to grow and strengthen our existing client franchises and to increase our share of wallet across our clients.

During this financial year, we embedded within the UK bank our One Investec approach to delivering solutions to our clients. We embedded this not only as a mindset of strategic collaboration around a cohesive client ecosystem, but we also make internal structural changes by removing silos and our removed management players.

We've put the client firmly at the center of all we do within our traditional activities of private banking and corporate and investment banking, but operating in a new structure of client groupings where we have a clear focus on client rather than product. I'll explain each of these client groupings in detail later in the presentation.

I've created a single-leadership team jointly responsible for the performance of all the client groupings and incentivized accordingly, each with a particular client focus and accountability, but not in isolation of all others, making sure to bring the whole of Investec to our clients where it makes sense to do so. Through this strategic integration, we significantly rationalized our cost base and reduced headcount, where there were roles duplicated in the original silos of private banking, corporate and investment banking and the center.

This was an incredibly difficult decision to take especially during the pandemic, and led to 194 role redundancies out of the London operations, or about a 12% reduction in our London based headcount. All these redundancy costs were taken in the year to March 2021 and these cost savings will come through as initial and indicated earlier in the FY 2022 financial year.

With respect to cost of funding, it's a key strategic objective of ours to reduce this and we've regrouped our liability raising channels which were also operating on a silo basis into one area, focusing not only on the cost of our deposit products and funding, but also focused on the cost of that platforms and manufacturing costs of these liability channels and where we can eliminate duplication. The interest expense on our deposit products has already reduced 29% in the second half of FY 2021 and we will see further reductions in cost of funds as these rate reductions come through and take full effect.

Last year, we took a strategic decision to focus our capital resources and concentrate our firepower on building scale and relevance as Fani has referred to earlier. We decided we needed to focus on the well-established base we have here in the UK market where we have grown strong client franchises and relationships of almost 30 years, as Ciarian mentioned just now.

The UK provides a significant market opportunity for us to grow into and gain further market share rather than spread ourselves too thinly across multiple geographies in terms of our capital, our management attention, and our investment spend. With this focus on our core UK market, we decided to exit our business in Australia.

We are actually close to completion of the wind down of our Australia activities and this wind down process was accelerated by a very successful execution of the sale of about AUD1 billion corporate and acquisition finance book at the end of March 2021. Meaning, we will no longer need to manage this book down over time.

And all the restructuring costs from the exit of Australia have also been taken into this current financial year. As reported already, we are winding down our financial products business and also took the decision to discontinue the structured products in the UK as a method of raising liabilities for the bank.

This was a very successful long-term liability raising channel post the great financial crisis. But given market dynamics, and the level of interest rates, and taking into account the current strength of the Investec credit and branch here in the UK, we can now raise retail and term liabilities far more cheaply through our other existing liability channels and therefore the rundown of this structure product.

The structure product liabilities will actually contribute positively towards a lower cost of overall funding for the bank as we go forward. In addition to these actions, we exited our resource finance business, which had a presence both in Australia and the UK.

We closed fund solutions in the U.S. and realized [ph] our activities in Hong Kong.

Now moving on to the second pillar on the slide, Financial Year 2022 and 2023 will be all about continued focus and growth. Delivery on our ROE and cost-to-income ratio targets will be driven by our growth drivers: growth in our client numbers, enhanced by our client ecosystem approach, deal volumes, optimization of cost of funds and further efficiencies we will make as appropriate.

We have some for our high-tech, high-touch client proposition that Fani spoke to earlier and this means that we'll optimize the digital experience for our clients, while at the same time, still giving them the personal service that our refreshingly human approach to business has always meant. And finally, having successfully implementing the changes we've made over the past year, and having become firmly established in our growth strategy over the next two years, we will then be well-positioned to deliver sustainable long-term growth and the achievement of our medium-term targets of 10% to 13% ROE and cost-to-income ratio of below 65%, while at the same time maintaining a CET1 ratio of above 10%.

This is of course subject to stable macroeconomic conditions. Before I go on to explaining our unique competitive positioning in the UK market and our UK market proposition, I'd like to just take a few moments to sit in context our recent financial performance and then also on the next slide, just have a look at our current diversified loan book.

In the financial year 2019, UK bank operating profits were £192 million, and we delivered an ROE of 11.2%. Then, in FY 2020, we were impacted by both the effects of the uncertainty surrounding Brexit, resulting in low levels of activity and then also in the closing weeks of the COVID-19 process resulted in significantly increased COVID provisions and fair value write-downs, as well as the beginning of the substantial negative effect of on-financial products business which persisted into FY 2021.

However, it is critically important to note that our operating profits before taking into account the impact of financial products were £6 million higher in this financial year at £138 million versus March 2020 despite the fact that this year was impacted throughout by COVID and its related lockdown and difficulties. So, what this table demonstrates is that in a normal operating environment, we are able to produce an ROE in our target range and that our business is very resilient, representing the benefits of a diversified business with high-quality revenue streams, displaying its counter cyclical strength.

These two factors, together with our focus on growth, and after all the changes made last year, and the competitive positioning I'm about to set out is what gives me the confidence I have in our ability to deliver our target or ROE on a consistent and sustainable basis in the medium-term. While we cannot guarantee there will be no bumps in the road ahead, we've taken these decisive actions to best position Investec bank in the UK for growth and for consistent delivery going forward.

What we see on the next slide, is that net core loans have grown solidly over the past few years to £12.3 billion and we have actively focused on diversifying the book and avoiding concentrations. Exposure to property is reduced as we rebalance the portfolio, increasing exposure to mortgages and other high net worth lending as well as corporate lending.

In the financial year to March 2021, Nishlan referred to this earlier, net core loans for the bank grew by 8.7%, excluding the sale of our Australian book which took place in March and only just over 1% of this growth related to lending under the government's COVID schemes. In the rest of the presentation, I'll explain where we see the growth coming through, talking to some of the areas which will contribute to the growth of the book.

But noting that given the time constraints today, I won't be able to go into all areas of book growth. The credit loss ratio pre-COVID for the financial year 2019 was 38 basis points.

This increased to 69 basis points in FY 2020 and is now at 56 basis points in FY 2021. If we were to include the COVID-related provisions that we took back in March 2020, our credit loss ratio for this financial year would be approximately 88 basis points.

We've remained conservative in our provisioning and as Nishlan referred to earlier, we have not released COVID-related provisions taken even though we've not seen an increase in overall defaults coming through and this is because there are still high-levels of uncertainty in the macro outlook. I want to spend a few minutes discussing how we are uniquely positioned within our competitive landscape here in the UK and what differentiates Investec from our competitors.

There are a number of logos on the slide and they're just examples. It's not an exhaustive list of who we compete with.

So, just to give you an idea of what the landscape looks like, but not including everyone. What we offer to our clients is fundamentally different to that of any one of our competitors, because none of them offers the breadth of solutions that we offer to our clients and their businesses as they develop over time.

To explain our competitive strength, I'll first refer to the smaller pie chart on the right. Here, we have divided the banking sector into three segments.

The first is the global large cap segment where the bulge bracket banks and they are focused primarily on large corporations and typically ignore smaller growing businesses. The second is the high street banks, which are focused on mass market retail banking, but cannot provide the broad range of products that are typically provided by the bulge bracket banks.

Investec is not within either of these two segments. The remaining segment in the middle is where we have categorized all the financial businesses that service as thousands of UK companies that have the scale and sophistication to meet a broad spectrum of financial solutions, which the high street banks can provide to them and which the bulge bracket banks don't provide to them.

Investec is in this third segment. However, unlike our competitors, Investec is the only bank that covers both the personal and business needs of growth-orientated plans across a broad array of products.

All our competitors operate within one, or two, or maybe even three of our business areas, but none of them are as capable of being relevant to clients throughout the journey of personal and corporate wealth creation. This is our USP in this market.

Yes, we are positioned as the bank for business builders -- distinctive, positioned to win and to grow our target market clients. Turning into detail about our newly formed client groups, which will come on the next slides.

I'll explain how Investec is uniquely positioned relative to our competitors in terms of being relevant to our clients through their personal and business journeys and this is a key driver of growth. What we've set out on this slide, all operate synergistically like cogs in a well-oiled engine.

Each part is important, but none of the parts operate in isolation. They must all work together in order for us to be able to provide holistic solutions to our clients and be relevant to them as their needs change and develop over time and to drive the growth engine.

So, to address our clients' personal financial needs, we have our private banking activities, and our Wealth business, which Ciaran will talk in detail about in a little later. And to address our client's business needs through our corporate and investment banking activities, we have client groupings for privately-owned companies, listed companies and the private equity community.

Overtime, we've developed highly specialized expertise in aviation, Power & Infrastructure finance, and real estate or property and therefore for each of these particular sectors, we have specialist teams which straddle the client groupings. Each of our business areas has deep roots in the UK and strong networks of relationships have built over many years.

Everything we offer to our clients falls into one of three broad categories: capital, being either debt or equity, advisory or banking. An extent to which each of these offerings is relevant to a client will typically depend on the stage of the particular client's development -- whether they be at an early growth stage or phase of expansion, or when they're growing in scale.

And the beauty of Investec's capability set is that we have all the tools in our toolbox to be able to help our clients throughout the process. There are so many examples of clients whom we've helped grow over many years.

In the case of many of our corporate clients, one or more of their executives, or employees are also private clients, or Wealth clients of ours, or both. By the way, we're now internally reorganized.

We've actively enabled encouraged our teams to be more cohesive in a strategic way, which is already working. We are seeing an increase in opportunities pursued across client groups within the bank and across our Wealth business for the benefit of our clients.

I'm now going to turn to each of our client groups in more detail. Our private banking activities are now fully invested and we are growing ahead of budget.

We have invested in talent platforms, marketing and digital tools, which give us a solid base from which to efficiently scale these activities. We continue to gain market share, as well as a greater share of wallet as our private clients connect seamlessly through our Investec ecosystem.

We expect private client costs to remain close to flat from here on. All costs incurred in developing this business have already been expensed.

This business finished very close to breakeven in this financial year and will turn to profitability in next financial year, which is ahead of our original plan. At the 2019 Investec Capital Markets Day, we explained that there's a very large and addressable market of approximately 90,000 high net worth individuals in the UK, who meet our target client's characteristics.

And given our successful growth and delivery to date, this represents a real and achievable opportunity for us to become a major player in the space. At last CMD, we indicated a target range of striving for 7% to 10% of this market in the UK.

Our target client characteristics are both quantitative and qualitative. The individuals with at least £3 million of NAV and £300,000 of earnings and from a qualitative perspective, we see clients who are active wealth creators, who are entrepreneurial-minded and are generally time poor [ph].

While these are our minimum entry criteria, the average income across our book of private clients is actually £722,000 and the average NAV is around £11.5 million. We've already demonstrated very strong growth in recent years with about 5,200 clients today in our onshore London business, compared to 3,500 at our CMD two years ago.

We also delivered on this client growth in spite of COVID lockdown conditions. We were very innovative in our client acquisition under these circumstances, Our client's categories including 30 professionals [ph], banking, entrepreneurs and funds, and we generate both annuity revenue from lending as well as capital light fee income from transactional banking, FX transactions and deposit activities.

About 900 of our private clients are also Investec Wealth clients, about 17%, demonstrating the synergies between these two business units and showing the extent of flew [ph] the opportunity for our client base to take up our own Wealth offering. We estimate that across our total private clients, there's about £10.2 billion in investable liquid assets, which is not yet with our Wealth business, or deposited in Investec bank accounts.

With respect to our mortgage book, this has grown very strongly to £3.1 billion now onshore from £1.7 billion at our CMD in 2019. Over the past four years, the book has been growing at a compound annual growth rate of about 35% per annum and the number of clients by over 23% per annum as we've gained traction in the market.

We've not loosened our competitive standards and we have maintained our strict risk appetite standard throughout this growth. The book has an average LTV of around 60% and since the great financial crisis, only just under £1 million has been written off in the private client onshore business, which has consistently run at a credit loss ratio of less than four basis points.

We've also seen strong growth in our other private client lending activities such as portfolio loans and private capital and general high net worth lending. And something else important to note is that much of our growth comes from our existing clients -- referring new clients because of our refreshingly human approach to how we do business, our flexibility and approach, our speed of execution, and our instinctive investor culture.

Moving on to private companies. Our private companies franchise operates within the deep and broad arena of privately-owned businesses in the UK.

And we've identified over 20,000 private companies as having the characteristics we are looking for in target clients. Although we've become well established in this market over the last 15 years or more, we see it as one of the most exciting growth opportunities ahead.

As demonstrated on the chart on the right, this business has shown consistent growth over the past several years. The asset finance book, which is within this overall total, has nearly doubled from approximately £1 billion in 2017 to around £1.8 billion today.

The total loss rate on the asset finance book is 72 basis points for the year to March 2021, down from about 98 basis points in March 2020 and it was around 83 basis points in March 2019. Payment holidays for asset finance have reduced to only 1.7% of the book at March 2021.

We're capable of providing lending and advisory solutions to these companies, as well as FX [ph] risk management solutions and savings. Our private companies franchise is now fully leveraging the high-tech, high-touch philosophy I mentioned earlier, and in FX and payments we've made significant enhancements to the proposition including online trading, hedging analytics and payments.

Over £100 million was traded online with us over the past year. We're currently developing a transactional banking capability for these clients funded partly by the BCR funding we were awarded.

Actually, our M&A advisory business is seeing very significant interest particularly from private equity funds in the UK private companies space, with levels of activity rising sharply at the current time. Relative to our competitors in this market, Investec is capable of providing not only asset finance product, but also the ability to focus on the client holistically and provide a combined and diversified offering to this under-serviced client segment, which is too small for the bulge bracket banks to put focus on and avoided by the high street banks who can't provide their diversified offering.

This is why we believe that we are so well-positioned to acquire even greater scale than we already have within this client base and growth and momentum is already building here. The next client grouping is private equity and this is one of our new combinations within our internal structure where we've brought together the focus on private equity clients from our fund solutions business, growth and leverage finance business and M&A advisory teams working closely together.

In fund solutions, we've had exceptionally strong and well-entrenched relationships with private equity funds, who we've been lending to for many years. In our growth and leverage finance business, we have dealt extensively with PE funds and sponsor back leveraged finance transactions and are further leveraging the PE fund relationships in M&A advisory.

This business services a very large addressable market of around 200 private equity funds across the UK, Benelux and the dark regions, and currently has relationships with about 70 of these. If you look at the chart on the right, the lending book has demonstrated steady growth over the past several years, proving the robustness of the business model and its ability to deliver and the book currently stands at around £2.4 billion.

The book continues to perform well as demonstrated by Stage 3 credit loss ratio for our growth and leveraged finance book of about 33 basis points this year. And in Fund Finance or what we call today Fund Solutions, we continue to have experienced no losses in this business.

We've effectively raised third party capital to ensure that we are not constrained by their balance sheet of Investec, given the demand from this business and we've developed a very successful distribution and institutional sell-down capability that I'll talk a bit more about later. We've already seen the strategic collaboration across our areas focused on private equity, enabling us to scale rapidly [ph], including what we can offer on the advisory side and on the personal private client side.

Importantly, both the average revenues per client and the average number of products used per client are growing consistently, which is why we see this client group delivering strong growth as we go forward. Moving on to our listed companies franchise; this is a top-ranked UK broker.

It contains our equity sales, trading and research activities, as well as our advisory colleagues and this is a very well-known and respected brand in the City of London. It is a strong client growth, and is clearly differentiated by it's breadth of capabilities.

I should probably point out for the South African audience joining us today that listed companies in the UK typically engage a corporate broker on a retained basis to advise them on interactions with the UK stock market on raising equity, M&A, or other capital transactions. As well as being a corporate broker, Investec is very active in the PLC takeover market advising clients.

Now, as reflected on the right, we have very significantly expanded the scale of our retained UK listed company client list in recent years, and currently have 134 clients in comparison to 104 back in 2019. Of these, nearly 40% on multi-product clients.

The average market cap of the new clients won over the past year is around £400 million and across the client base, the average market cap is probably around £1 billion. Over the past year, we have raised £3.5 billion in equity across about 30 listed clients and we were ranked second in terms of volume and value traded in the FTSE 250.

We've also been a leading UK public markets takeover specialist over the past 10 years, second in the league tables with our core target market. In 2020, most successful year ever in the institutional investor survey out of being rated the Number 1 corporate broking team with more top-ranked research sectors and analysts than any other broker.

In terms of growth, we've been winning new clients and we actively involve with them as business builders, leading to further growth and opportunities for us. The strong momentum in this business off the back of excellent performance in the past year, and to further accelerate growth, as we go forward.

As I mentioned earlier in the presentation, overtime we've developed deep [ph] power in infrastructure, finance and real estate. And these businesses draw on the expertise of our client groups, which I've just mentioned, but other time they've developed their own franchises by virtue of how strongly they've grown, the extent of our client relationships and the spacious nature of these sectors.

These businesses within our corporate and investment banking activities have previously delivered strong profitability, and high ROE. Our aviation business is represented by a global team providing tailored solutions primarily covering access to capital and treasury risk management, as well as advisory services to about 30 corporate clients.

It is a book currently of around £400 million [ph], and also includes fund management which provides recurring capital revenue from debt funds of just over £400 million and equity funds of just over £100 million. We have strategically reduced the size of our book in aviation, as the market continues to be materially impacted by COVID and over the past year, we've really mostly been focused on protecting the balance sheet and supporting our clients through unprecedented and challenging conditions.

Overall, this book has held up robustly. This book is largely fair-valued and the valuations have just recently been reviewed through the end of year audit as this book is marked to market.

Our Power & Infrastructure Finance franchise provides advisory services and balance sheet support and also acts as a book runner and lead arranger covering multiple areas of Power & Infrastructure Finance, including renewables. It comprises about 100 clients with a core focus on mid-market companies and infrastructure funds across the UK, Europe and the U.S.

It has a book of around £800 million. This book has performed well having negligible Stage 3 ECLs at March 21.

Levels of activity did reduce in Power & Infrastructure Finance markets last year, but we have started to see an increase in activity as economies are opening up further. And this is a key growth sector for us where we've established a very strong foothold in the space both in our U.S.

and UK businesses and we are well-positioned for growth in renewable and other infrastructure financing going forward. Our real estate or property specialist business is a fully-integrated financial service offering for over 90 Real Estate focused clients, which are approximately 50% corporate and institutions and 50% high net worth individuals, who we've been dealing with for many, many years.

The credit quality of our just over £2 billion book remains strong and we have seen the market recently rebounding following the successful vaccine roll out in the UK and the start of the reopening of the economy, leading to a strong pipeline of activity as we start the financial year, even though growth was really muted last year. Ongoing property Stage 3 credit loss ratio for this book totaled about 36 basis points in this financial year.

Our net exposure to the UK legacy portfolio has materially reduced to around £84 million at March 2021, largely reported under Stage 3. So, these specialist industry groups, along with each of our client groups that I went through earlier, are diverse across multiple areas and will contribute to an overall consistent and stable delivery of profits.

As always, this is subject to surrounding market conditions. I just want to talk now to our very highly successful origination and distribution capability.

Given the growth in our client franchises and the growth of our clients themselves over time, we are able to actually originate more loans than we choose to hold on our balance sheet. This gives us the opportunity to enhance our revenues from a greater volume of transactions and also importantly, to be able to do much larger transactions.

This is not an originator to distribute model for someone who lives through the 2008 crisis -- I can say that definitively and clearly. Rather than that, this is a balance sheet management mechanism to enable us to service the growing appetite of our clients for risk we are happy to hold ourselves, but where we are constrained in terms of the size of our own balance sheet and given we want to maintain as Fani said earlier, a more granular and diverse book.

As you can see at the bottom of this slide. In the past year, we've sold down exposure across 116 different transactions, for a total of about £3.8 billion.

While this is slightly down on the average sell-downs of the prior two years at approximately £5 billion, it's still a decent level of sell-down, especially given lower levels of activity due to COVID, particularly in the first half of the last financial year. This financial year we also raise £3.8 billion in third party funds, mostly for our Fund Solutions business.

And you can see here that we received non-interest income from these activities of around £30 million, contributing to our capital act [ph] revenues. Selling down exposure also has a number of other advantages.

It helps us to manage our capital allocation, also the capital light fee income I've just referred to is enhanced. We have enhanced return matrix if we do it in this way and it provides us with valuable market intelligence which in turn stimulates dealer originations, as well as critical information on pricing in the market, and also raises the profile of Investec amongst other institutional investors.

Fani earlier outlined the five strategic priorities of the group and I want to reiterate that we are committed to these in the UK bank. I've spent much of this presentation explaining how we will drive growth, bold actions we've taken to reduce and remain disciplined on costs, and to allocate capital with focus on building scale and relevance.

These are all underpinned by a relentless focus on connectivity, and our One Investec strategy. In other words, leveraging the whole of our product offering across our clients growth journeys.

In the past, collaboration was ad hoc and now under our new integration [ph] leadership structure, this collaboration is driven strategically, which is already delivering new opportunities and growth in origination. With regards to digitization, which Fani spoke a bit about earlier, here in the UK bank, we continue to enhance the internal delivery, has improved the client experience with various initiatives, such as digital region retail savings, which has already been launched and has been very successful, and we have a dedicated product client app for our UK banking Wealth clients.

We've embarked on our Technology Modernization strategy that will focus on creating leverage across our business platforms. For example, having single platforms for each of lending payments, clients and data.

We continue to change the way we work, embracing the digital workplace and adapting our operating model to be cloud-first. And importantly, as Fani spoke to earlier, we are partnering with UK FinTechs in order to accelerate innovation.

All of the above is central to our core business proposition with truth outlined in this presentation, a total focus on clients and execution so that we can deliver the financial targets outlined [Technical Difficulty] of the slide, an ROE of 10% to 13% in the medium-term, and a cost-to-income ratio less than 65%. And we said earlier, this is of course subject to external market conditions.

To conclude, the past year has been about action and simplifying the business, making it more efficient, positioning it for growth. The next couple of years from now will be about focusing on consistent and stable delivery of this growth strategy.

And then in the medium-term delivering on our target ROE and cost-to-income targets. Our people are the secret to our success.

In terms of approach to our clients, the can-do attitude we display and how our people feel -- belonging [ph] diversity and inclusion has always been a focus of Investec starting right from our founders and it's been critical to ensure this is a lived experience, which the last year that we've all lived through has clearly emphasized. Our generosity of spirit and our distinctive Investec culture are key contributors to how we perform.

I want to thank all of my colleagues for how they've supported each other and for what they've delivered in the past financial year in a period of material internal change and external uncertainty. And of course, thank you to all of our clients.

We value your support as always. We enter financial year 2022 with cautious optimism for the way forward.

The success of the vaccine roll out in the UK and the U.S., strong and sustained levels of government support and indications for expected increases in economic growth lead to anticipation of better macroeconomic conditions than we experienced last year, albeit tempered by threats of new waves and strains of COVID. We strongly believe our integrated client-driven approach gives us a sustainable and unique competitive advantage with our target class.

We can differentiate against competitors, who may have similar offerings in certain product areas, but who do not have the combined and diversified proposition Investec in the UK offers. I believe we're well on a journey to achieve these targets.

We've done the hard work to get the business positioned for growth and our leadership team is collectively driving to deliver on this. Of course, supportive macro conditions will be welcomed by all of us.

Thank you all for listening. I wish you all well.

Keep well and stay safe. And I'll hand over now to Ciaran, who will speak about our Wealth offering in the UK.

Ruth, thanks very much. After listening to that, I've worked with you over the last year and more, I'm a buyer of the business, but then again, I guess I'm an insider too, because I know a lot more about what's going on.

But it is really positive and it has been tough. And I know a lot of our shareholders and analysts have questioned why we should be there.

And those questions are valid, but as I say, we are a much more risk-disciplined business and going forward, I think we have created a franchise that has a unique position and has the ability to deliver on all our objectives. So I'm a buyer.

I'm going to turn now to the Wealth business in the UK. This business has seen significant change in the past year.

I've been the CEO now for just over a year from the first of April last year. Seven out of the 10 previous executives on this business are no longer with us.

So, we've had big change in the business, we have had huge emphasis on our culture and on our people. This industry in the UK is essentially a white male-dominated business and that is not correct.

This is not right for the future. This is not where the future will deliver us success.

We have spent a lot of time working on our people and our culture. I think a lot of the work that we have done in this past year is not reflected in the numbers as it can't be, but it will be reflected going forward.

One of our key mottos in Investec -- not just in the Wealth business is that -- we have got to create an environment where people are happy to say, 'I'm happy to be me'. Whatever that 'me' is, it doesn't matter and generally, it's different from the perspective that we show.

It can generally be different, but we want to create that environment and that's what we have spent a hell of a lot of time doing. We've also created a culture of growth.

This business has been stagnating for a while. Many of our competitors in this have also been stagnating, but there is a massive market there.

Our operating results for the year are very positive. We've shown an operating margin in excess of 25% and a lot of the cost restraint initiatives that we've put in place will only be reflected in the next year.

So, we've incurred the cost of the changes this past year, we've got about £6 million of people retrenchment costs. So, we will see the benefit of that next year and the following years, both not having that cost and in reduced cost base going forward.

So, I'm personally very excited. I've got a great people around me in that business and we are poised for growth.

I'm not going to go through all of the slides. I'll go through one or two because I'm at the end of the show, so people probably turned off.

But where are we positioned? It's interesting.

This slide shows where we are relative to our competitors. We're probably around -- this is to show some of the competitor's report.

We're probably around Number 9 or 10 in the market. We've manage just over £41 billion funds under management.

You see the two big gorillas on the left side, St. James's Place and Quilters who have different business models to ours.

But we're there. We managed £41 billion.

Some of our distinctive attributes -- we have a recognized international brand within a big group of other activities that Ruth is talking about, which we can bring to our clients. So we are a safe house.

Our size allows us to be agile, but we have the strength to really compete successfully and we have a very experienced management team in place. Some of it is from the past, some of it is new, but we also have the experience to be able to do mergers and acquisitions.

And that is where we will grow in this business, we're not going to grow purely by organic growth. We need to be involved in a consolidation of the industry.

When I look at -- the total industry is somewhere around £2 trillion. Depending on how you measure it, we have between 2% and 5%.

We are a small player, but we are very big player. But the room for growth is huge.

Some of the key things driving this industry, it is a big industry. The move to overall financial advice rather than just managing the money you give us is key.

Costs are increasing in this industry mainly due to regulatory issues and margins are under pressure. So, we believe that our business which is clean from a regulatory point of view, we have the history of doing M&A activities and we have now a growth culture, which is very important for us.

I think one of the key areas of growth in this business going forward relates to this holistic financial advice. So, we have about 40,000 clients.

Say we have just over £41 billion of funds under management. In terms of advice that we give to clients, we only advise on about £3 billion of that £41 billion.

So, there's a massive opportunity both within our business and externally to our business to be able to grow the advice lead, which will then realize Investment Management led businesses. So we have big emphasis; that's where we're spending our money, upgrading our current staff, buying in, financial planning expertise.

That's what will lead the growth of this business and that's what will differentiate us from others. So that is a very exciting part of our business and we made big strides in this past year in upgrading our people.

I think just some of the key points of our business. We've managed £41 billion with an operating margin of over 25% and given the restructuring that we have done in the past year, we will improve that operating margin going forward.

We showed a compounded growth of just over 7% in funds under management over the past few years and we really think that we can improve that going forward. So, it is an exciting business.

Where does this fit into the group? Well, we have a lot more cooperation with our banking business in the UK.

As Ruth has said, they've got about 6,000 high net worth individuals. Generally, they manage their own money or they plowed into their own businesses.

We can help. There will come a time where they want to diversify and that's where we believe that we can play a good role.

We'll be led by advice initially trying to set up their structure so that when the money comes in, it comes in in the most tax-efficient way and we can really play a good role in that going forward. But it's not going to move the dial for our businesses.

So, if we're going to grow, we need to play in the M&A space. So, can it be listed separately?

Yes, that's one of the questions that I've seen so far this morning. Yes, that's possible.

We have been listed separately before as Rensburg Sheppards. So yes, it is possible going forward.

So we are in a big industry, we are a small player, but a very competent player, a clean player. There's lots of stuff in the market about those people who've played in the defined benefit schemes.

We don't have any of that on our books. So going forward, we do believe that we are in a good space.

I would go to finalize on this slide. Why we are a good investment proposition?

We have a very strong new leadership team, which encompasses people from the past with the history in our business and new external people from the industry who can bring challenging views. We have a very empowering culture now.

That has been some of the key areas of focus that we have done in the past year. It's been really important for us.

That will enable us to grow and to create that place that people want to come and work with and clients want to come and engage with us. We have a strong brand in the UK, very strong brand, everybody knows the Zebra, so it is very important for us.

We have right-sized the business in terms of structure, operating margin over 25% and growing. It's very enviable among our industry competitors and we are well-positioned to participate in industry consolidation, which is happening driven by pressure on fees, increasing costs and the need to be bigger.

And I'm going to be tapping Fani and Nishlan with their purse of the Ninety One stake. So, we have the money and we have the ability to do it and we have the team to be able to put these things in place.

So, that is a key message on our UK Wealth business. It is an important part of our group and it is an important area of annuity income in the overall scheme of our group results.

So now I'm going to put back on my Group hat and just try and summarize my own presentation and Ruth's presentation. I think we have a really strong management team in the UK business, in our international business.

We have refocused our activities, we have exited certain geographies that we just could not be relevant in going forward. We have refocused our energy and our capital with financial and non-financial into our core geographies.

We have an improved -- much improved focus on our risk discipline. We don't want these once-offs be that positive or negative -- generally the negative has outsize the positive.

We don't want those in our business. We want to be able to grow in a sustained manner.

But we have not lost our entrepreneurial flair. That is key to our internal soul and our external soul.

So, we believe that our international business outside of South Africa, which has performed exceptionally well, that our international business can really deliver the results. We have done the hard work, we have paid the school fees and we have learned the lessons of the past.

So, we think that we are there, and ready, and we can deliver to help deliver the results that Fani has talked about, and the results for the future in terms of getting our profitability and ROE, and creating a business that people want to work with us and our clients want to come and engage with us. So, it is an exciting time and I am delighted with Ruth to be in the hot seat if that's what they are.

We have the support of the rest of the Group. We have listened to the concerns of our shareholders and we have refocused and we really think that we will deliver going forward.

So, happy to deal with any further questions that we've got.

There are no further questions. Okay.

Thank you, everybody.