InvestecThe Investment Case

UBS Conference October 2011

Stephen Koseff

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Strategic positioning

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Mission statement

We strive to be adistinctive specialist bank and

asset managerdriven by commitment to

our core philosophies and values

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Specialist bank and asset manager… with three distinct business activities

Provides investment management services and independent financial planning advice

Broad range of services:Advisory StructuringLendingSecurities TradingMarket MakingPrincipal Transactions

Provides investment management services

To its predominantly global institutional client base

Provides investment management services and independent financial planning advice

To: Private clientsCharitiesTrusts

To: Government InstitutionalCorporatesHigh Net Worth ClientsHigh Income Clients

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Private Client

Focused on well defined target clients

Wealth & Investment

Investment BankingActivities

Capital MarketsActivities

Private BankingActivities

Corporate / Institutional / Government

Specialist BankingAsset

Management

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Not “all things to all people”

With a solid international platform

Core infrastructureDistribution channels Origination channels

Since 1974

Since1992

Since1997

Assets: £19bln

Assets: £29bln

Assets: £3bln

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And a diversified revenue stream

Asset Management

29.3%

Wealth & Investment

9.3%

Specialist Banking 61.4%

Asset Management

19.3%

Wealth & Investment

6.0%Specialist Banking74.7%

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Contribution to group earnings 31 Mar-11 Contribution to group earnings 31 Mar-10

Specialist BankingThe Investment Case

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Operating as a Single Specialist Bank

Creating the appropriate business structure to maximise the product offering to the client

Sharing competencies to achieve greater operational efficiency

Ensuring synergies and connectivity across the group

Leveraging off global capabilities

Focusing the Mindset around Client demand

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Investment Banking: Investment caseIntegrated business with local client delivery and international access

• Brand well established• With Evolution would position

us as a leading mid-market investment bank in the UK

• Agreement with Lloyds as their chosen partner for M&A and ECM

UK and Europe

• Business is in a re-investment phase

• Team has been rebuilt • Focus is on top end of

mid-market

Australia

• Benefiting from a well diversified portfolio

• Acquired Access Capital in Jun-11 to facilitate the link between China, UK and SA

Hong Kong

• Established a presence in 2010 • Facilitates the link between India,

UK and SA

India

• Strong brand and positioning in advisory

• Restructured activities in securities around specialisations

South Africa• Property Fund• Property Investments

• Advisory• Institutional, Research,

Sales & Trading• Direct Investments and

Private Equity

Activities

Capital Markets: Investment casePrimarily focused on traditional bank customer flow/related activities

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• Structured and asset finance• Project and infrastructure finance• Commodities and resource finance• Corporate loans• Residential mortgages origination

• Money markets and forex• Interest rate solutions• Equity derivatives and scrip lending

• Securitisation• Credit investments and trading

Client focused business concentrating on three areas of customer related activities:

Lending and leasing activities Treasury and trading activities Structured credit

South Africa UK & Europe Canada Australia India

• Clients and counterparties:

• Government• Financial institutions

• Corporates• IFAs

• Funds• SMEs

• Private Banking, Investment Banking and Wealth Management clients

Financial Markets and Structuring Support

Value proposition• Successfully built sustainable businesses on the

back of client driven transactional flow

• Balanced business model with good business depth and breadth

• Well positioned in the primary and secondary markets

• Ready to capitalise on market opportunities

Capital Markets: Investment caseStrong international platform

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2006 2011

Strong client relationshipsPrivate Banking: Investment case

Value proposition• Provide HIGH TOUCH transactional banking, credit,

deposit and investment services to two distinctclient bases:

• High Income – c.135,000 clients• HNW– c.6, 000 clients

• Also offer trust and fiduciary services, advice and tailored credit and investment solutions to HNW’s

• Key focus is on: • Back to Basics• Growing the client base• Ensuring the product offering is delivered to our

global client base

16,722

72,969

Australia

South Africa

UK and Europe 51,77621,500

1,290

47,560

70,350 141,517

Number of clients

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Wealth & InvestmentThe investment case

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Value proposition• Business has been built via consolidation of smaller

businesses over a long period of time

• Well established platforms in the UK and SA which could cope with significant additional ‘bolt-ons’

• Focus is on globalising the business and currently have £29bn funds under management

• Largest private client wealth and investment manager in SA

• Building scale in the UK business which, with Evolution, would create a major UK player in the private client investment management industry and add £7.6bn to total FUM

Wealth & Investment: Investment case

*Note: Total third party assets held under management excluding the Rensburg Fund Management business which was sold in January 2011

Building an international platform

0

10

20

30

2003 2005 2007 2009 2011

£'bn

Discretionary Non-discretionary

c.100,000clients

Funds under management*

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Asset ManagementThe investment case

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• An independently managed subsidiary of Investec Group• Investec Asset Management’s origins are African but we are global in

our approach• Worldwide, top 100 asset manager*• Third party assets under management grown from £41.8mn in 1991 to

£58.8bn in 20 years**

Global specialist investment manager

* Global Investor 2008 Survey** As at 31 March 2011

Asset Management: Investment case

20-year growth story

0

20

40

60

80

100

120

140

0

10

20

30

40

50

60

70

Mar

-92

Mar

-93

Mar

-94

Mar

-95

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

AUM Operating profit (RHS)

£’bn £’mn

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• Developed business from scratch out of a domestic position in an emerging market

• Create successful investment capabilities organically• Strong investment performance• Truly global in our approach with broader distribution than ever

before• Unique and clearly understood culture• Stable and experienced leadership:

• Executive committee, average tenure of 17 years• Top 30 leaders, average tenure of 13 years

Asset Management: Value proposition

Performance Clients Innovation Insight

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Asset Management: Drivers of future performance

• The economic power shift from West to East

• Continued development of funded savings pools around the globe

• The rise of international investing in the markets with large mobilised savings pools

• Convergence between traditional and alternative managers: growth opportunity in private markets

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Investment case: demystifying the

numbers

20

c

Solid base of recurring income

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-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Net interest income Annuity fees and commissions Other fees Client flow trading income Investment income

Average since 2002 of 65%

c

Driven by strong growth in funds under management

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CAGR since 2002 of 15%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Asset Management Wealth & Investment Other

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0%

20%

40%

60%

80%

100%

120%

-

5,000

10,000

15,000

20,000

25,000

30,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Customer accounts

Core loans and advances to customers (including own originated securitised assets)

Core loans (excluding own originated securitised assets) to customer deposits

CAGR since 2002 - loans 21%

And loans and depositsCAGR since 2002 - customer deposits 15%

Revenue continued to grow faster than costs

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-

500

1,000

1,500

2,000

2,500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Total revenue Expenses

CAGR since 2002 - Revenue 14% CAGR since 2002 - Expenses 12%

Good growth in operating profit before tax* and impairments

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-

100

200

300

400

500

600

700

800

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Operating profit before tax and impairments* (NIBTBI) Operating profit before taxation* (NIBT)

CAGR since 2002 - NIBTBI 21% CAGR since 2002 - NIBT15%

*before goodwill, acquired intangibles and non-operating items

But Specialist Banking held back by elevated impairments

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*before goodwill, acquired intangibles and non-operating items

-

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011

£‘mn

Operating profit before tax

-5

10 15 20 25 30 35 40 45

2006 2007 2008 2009 2010 2011

£‘mn

Operating profit before tax

-

100

200

300

400

500

600

700

2006 2007 2008 2009 2010 2011

£‘mn

Operating profit before tax

Operating profit before tax and impairments

Specialist Banking Wealth & Investment Asset Management

*

** *

Strong growth in capital and a reduction in leverage

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-

1,000

2,000

3,000

4,000

5,000

6,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mn

Total shareholders’ equity (including preference shares and non-controlling interests)

Total capital resources (including subordinated liabilities)

0

2

4

6

8

10

12

14

16

18

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

times

Gearing/leverage ratio (assets excluding assurance assets to total equity)

Core loans to equity ratio

CAGR since 2002 of 20% Average 10-year leverage ratio of 14x

Resulting in a decline in ROE in Specialist Banking

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0%

100%

200%

300%

400%

500%

600%

-5

10 15 20 25 30 35 40 45

2006 2007 2008 2009 2010 2011

Net tangible shareholders' equity

Tangible ROE post tax

0%

20%

40%

60%

80%

100%

120%

-

10

20

30

40

50

60

70

2006 2007 2008 2009 2010 2011

Net tangible shareholders' equity

Tangible ROE post tax

0%

5%

10%

15%

20%

25%

30%

35%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2006 2007 2008 2009 2010 2011

Net tangible shareholders' equity

Tangible ROE post tax

Tangible ROE post tax, pre impairments

Specialist Banking Wealth & Investment Asset Management£’bn £’mn £’mn

Share price 13% (10%)*

Overall CAGR since 2002:

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NTNAV per share 19%

-

500

1,000

1,500

2,000

2,500

3,000

0

100

200

300

400

500

600

700

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

£'mnpence

Net tangible asset value (excluding goodwill) (£'mn) (RHS)

Net tangible asset value per share (excluding goodwill) (pence) (LHS)

Share price (pence) (LHS)

NTAV 24%

*To 26 October 2011

Conclusion

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We have a distinctive investment offering …

… a quality scalable global business

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… dedicated employees that are focused on clients and building the business

… with a balanced business model and an entrepreneurial culture

… a well established brand that supports a sustainable long term strategy

Resulting in …

Thank you

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