REG - Investec PLC - Investec Limited Capital Disclosures
RNS Number : 1010HInvestec PLC30 July 2021
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INLNSX share code: IVD
BSE share code: INVESTEC
ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
Investec plc
Incorporated in England and Wales
Registration number 3633621
LSE share code: INVPJSE share code: INP
ISIN: GB00B17BBQ50LEI: 2138007Z3U5GWDN3MY22
As part of the dual listed company structure, Investec plc and Investec Limited notify both the London Stock Exchange and the JSE Limited of matters which are required to be disclosed under the Disclosure Guidance, Transparency Rules (DTR) and Listing Rules of the Financial Conduct Authority and/or the JSE Listing Requirements.
Accordingly, we advise of the following:
Investec Limited - Basel III disclosures at 30 June 2021
Capital disclosures
Investec Limited calculates capital resources and requirements at a group level using the Basel III framework, as implemented in South Africa by the South African Prudential Authority, in accordance with the Bank's Act and all related regulations. Investec Limited continues to hold capital in excess of regulatory requirements and board-approved minimum targets.
Including unappropriated profits
Investec Limited*
IBL*
As at 30 June 2021
R'mn
R'mn
Common equity tier 1 capital
44,317
43,792
Additional tier 1 capital
2,727
1,936
Tier 1 capital
47,044
45,728
Tier 2 capital
10,405
13,326
Total regulatory capital
57,449
59,054
Risk-weighted assets per risk type:
Credit risk
260,201
256,442
Counterparty credit risk
11,393
11,393
Credit valuation adjustment risk
6,523
6,523
Equity risk
24,301
9,542
Market Risk
6,120
3,422
Operational risk
26,832
22,193
Total risk-weighted assets
335,370
309,515
Total minimum capital requirement
36,891
34,047
Capital ratios
Common equity tier 1 ratio
13.2%
14.1%
Tier 1 ratio
14.0%
14.8%
Total capital adequacy ratio
17.1%
19.1%
Leverage ratio disclosures
Including unappropriated profits
Investec Limited*
IBL*
As at 30 June 2021
R'mn
R'mn
Tier 1 capital
47,044
45,728
Total exposure
618,715
584,373
Leverage ratio
7.6%
7.8%
Excluding unappropriated profits
Investec Limited*
IBL*
As at 30 June 2021
R'mn
R'mn
Common equity tier 1 capital
41,456
42,399
Additional tier 1 capital
2,733
1,937
Tier 1 capital
44,189
44,336
Tier 2 capital
10,467
13,326
Total regulatory capital
54,656
57,662
Risk-weighted assets per risk type:
Credit risk
259,476
256,126
Counterparty credit risk
11,393
11,393
Credit valuation adjustment risk
6,523
6,523
Equity risk
23,839
9,542
Market Risk
6,120
3,422
Operational risk
26,862
22,193
Total risk-weighted assets
334,183
309,199
Total minimum capital requirement
36,760
34,012
Capital ratios
Common equity tier 1 ratio
12.4%
13.7%
Tier 1 ratio
13.2%
14.3%
Total capital adequacy ratio
16.4%
18.6%
Leverage ratio disclosures
Excluding unappropriated profits
Investec Limited*
IBL*
As at 30 June 2021
R'mn
R'mn
Tier 1 capital
44,189
44,336
Total exposure
618,315
584,246
Leverage ratio
7.1%
7.6%
* Where: IBL is Investec Bank Limited consolidated. The information for Investec Limited includes the information for IBL.
Liquidity disclosures
Liquidity coverage ratio (LCR)
The objective of the LCR is to promote the short-term resilience of the liquidity risk profile of banks by ensuring that they have sufficient high-quality liquid assets to survive a significant stress scenario lasting 30 calendar days.
With effect from 1 April 2020, the minimum LCR requirement in South Africa was reduced from 100% to 80%, until such time as the South African Prudential Authority (PA) is of the view that the financial markets have normalised post COVID-19. This applies for both Investec Bank Limited (IBL) (solo basis) and Investec Bank Limited (IBL) consolidated group.
In accordance with the provisions of section 6(6) of the South African Banks Act 1990 (Act No. 94 of 1990), banks are directed to comply with the relevant LCR disclosure requirements. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord, as specified by BCBS d400 (2017) and Directive D1/2018.
The following table sets out the LCR for IBL (solo basis) and IBL consolidated group for the quarter ending 30 June 2021:
IBL (solo basis) - Total weighted value
IBL consolidated group - Total weighted value
High quality liquid assets (HQLA) (R'mn)
97,587
99,249
Net cash outflows (R'mn)
65,633
62,895
Actual LCR
149.3%
158.5%
Required LCR
80%^
80%^
^ - temporarily reduced from 100% by the PA.
The values in the table are calculated as the simple average of 91 calendar daily values over the period 1 April 2021 to 30 June 2021 for IBL (solo basis). IBL consolidated group values use daily values for IBL (solo basis), while those for other group entities use the average of April, May and June 2021 month-end values.
Net stable funding ratio (NSFR)
The objective of the NSFR is to promote the resilience of the banking sector by requiring banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities on an ongoing structural basis. By ensuring that banks do not embark on excessive maturity transformation that is not sustainable, the NSFR is intended to reduce the likelihood that disruptions to a bank's funding sources would erode its liquidity position, increase its risk of failure and potentially lead to broader systemic risk.
The minimum NSFR requirement in South Africa is 100%. This applies to both IBL (solo basis) and IBL consolidated group.
In accordance with the provisions of section 6(6) of the South African Banks Act 1990 (Act No. 94 of 1990), banks are directed to comply with the relevant NSFR disclosure requirements. This disclosure is in accordance with Pillar 3 of the Basel III liquidity accord, as specified by Directive 11/2015 and Directive 01/2018.
The following table sets out the NSFR for IBL (solo basis) and IBL consolidated group as at 30 June 2021:
IBL (solo basis)
IBL consolidated group
Actual NSFR
114.7%
116.0%
Required NSFR
100%
100%
Further disclosures with respect to Investec Limited's and Investec Bank Limited's capital and liquidity will be provided on the Investec website in due course as required by the relevant regulations.
30 July 2021
Sponsor: Investec Bank Limited
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