Avior Capital Markets - Investec Limited (101G) Investec | Banking on progress

Report

Avior Capital Markets

Harry Botha

Investec | Banking on progress

Investec%u2019s H1 %u201920 results for the Banking and Wealth management operations showed divergent trends in its operations by geography, as the SA operations delivered strong earnings growth in challenging conditions while the UK lagged due to lower investment banking revenues and wealth management investment spend. We expect Investec%u2019s medium-term focus on improved cost and capital efficiency to support the Group%u2019s earnings growth in FY %u201821f and %u201822f despite our forecasts for higher credit impairment charges in SA and the UK. We believe the Group%u2019s share price overly discounts the UK Specialist Bank. The bank continues to gradually improve its operating and capital efficiency. The UK bank%u2019s capital adequacy ratio remains sufficient, with potential to rise on the Ninety One unbundling. Please find our analysis and updated forecasts in this report.

08/01/2020 16 EN

Underlying

Investec Limited

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ZAE000081949 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Harry Botha

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Investec | Banking on progress

Investec | Seeing opportunity

Investec | Value hidden by short-term costs

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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