Investec PLC Investec Exposures to Steinhoff (9265Y)
11 December 2017 - 6:00PM
UK Regulatory
TIDMINVP
RNS Number : 9265Y
Investec PLC
11 December 2017
Investec Limited Investec plc
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Incorporated in the Republic Incorporated in England
of South Africa and Wales
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Registration number 1925/002833/06 Registration number 3633621
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JSE share code: INL LSE share code: INVP
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NSX share code: IVD JSE share code: INP
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BSE share code: INVESTEC ISIN: GB00B17BBQ50
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ISIN: ZAE000081949
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Investec (comprising Investec Limited and Investec plc)
exposures to the Steinhoff Group of companies
11 December 2017
Investec wishes to clarify its exposure to Steinhoff
International holdings NV (Steinhoff) and its subsidiaries,
including Steinhoff Africa (PTY) Ltd (Steinhoff Africa) and
Steinhoff Africa Retail Ltd (STAR), it's separately listed African
retail activities.
Investec has credit exposures to the Steinhoff Group of
companies, which represent a small portion of the group's balance
sheet as explained in detail below. Based on the information
currently available to the group, Investec is not expecting to
suffer any losses on these credit exposures.
The exposures are largely to Steinhoff Africa's subsidiaries,
with an immaterial exposure to Steinhoff. The majority of the
transactions have been undertaken by Investec Bank Limited (South
Africa), with Investec plc having an insignificant exposure to
Steinhoff. The exposures to Steinhoff Africa largely comprise
lending exposures and overnight facilities, and are secured by
guarantees from certain of the Steinhoff Africa and STAR
subsidiaries.
Exposures to client share covered loans where reliance is placed
on value being accorded to the Steinhoff share price to support
repayment is negligible.
Investec Bank Limited (South Africa) does have certain
derivative exposures linked to the Steinhoff share price, where a
trading loss could materialise. The loss could be zero but the
maximum potential loss could be approximately 3% of the Investec
group's post-tax operating profit.
In addition to the above, Investec Bank Limited (South Africa)
holds Steinhoff convertible bonds in it's available for sale
portfolio. The carrying value of these bonds represents less than
0.3% of the group's consolidated tier one capital.
The group's associate investment, The IEP Group, has no exposure
to the Steinhoff Group of companies, and Markus Jooste who was a
director on their board resigned last week.
Investec manages credit exposures within strict risk parameters
to avoid any specific concentrations in its credit portfolios.
Thus, any one particular exposure would represent a small portion
of the group's total credit and counterparty exposures, as is the
case with the group's exposure to Steinhoff.
As at 30 September 2017 (the group's last reporting period)
Investec Limited (South Africa) had cash and near cash balances of
R102.6 billion and tier one capital of R36.6 billion. The South
African banking business reported solid results for the six months
to 30 September 2017 as announced on 16 November 2017.
Furthermore, the group's total post-tax operating profit
(adjusted earnings) for the year ended 31 March 2017 amounted to
R7.9 billion (GBP435 million). As at 30 September 2017 the group's
consolidated tier one capital amounted to R64.8 billion (GBP3.6
billion) and the group's cash and near cash assets amounted to
R193.4 billion (GBP10.7 billion)
The group's exposures to the Steinhoff Group of companies are
summarised in the table below:
Counterparty As a % of As a % As a % As a %
South Africa's of the of South of the
total credit Investec Africa's Investec
and counterparty group's total tier group's
exposures consolidated one capital consolidated
(which were total credit (which total tier
R464.8bn and counterparty was R36.6bn one capital
at 30 Sept exposures at 30 Sept (which
2017) (which 2017) was GBP3.6bn
were GBP43.1bn at 30 Sept
at 30 Sept 2017)
2017)
--------------------- ------------------ ------------------ -------------- --------------
Steinhoff Less than Less than Less than Less than
Africa* - 0.25% 0.2% 3.0% 1.5%
loans
--------------------- ------------------ ------------------ -------------- --------------
Steinhoff Less than negligible Approximately Less than
Africa* - 0.05% 0.5% 0.5%
other credit
and counterparty
exposures
--------------------- ------------------ ------------------ -------------- --------------
STAR - other Less than Less than Less than Less than
credit and 0.1% 0.1% 1.5% 1%
counterparty
exposures
--------------------- ------------------ ------------------ -------------- --------------
Steinhoff immaterial immaterial immaterial immaterial
- loans
--------------------- ------------------ ------------------ -------------- --------------
Steinhoff negligible negligible Less than Less than
- available 0.5% 0.3%
for sale investment
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* Secured by guarantees from certain of the Steinhoff Africa and
STAR subsidiaries.
For queries:
Investor Relations:
+27 11 286 7070
+44 207 597 5546
investorrelations@investec.com
NOTE:
The financial information on which this statement is based has
not been reviewed and reported on by the group's auditors.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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