Investec Bank (Australia) Limited
Investec Bank (Australia) Limited ABN 55 071 292 594 Unaudited consolidated financial information for the year ended 31 March 2012
Executive summary
1. Introduction Investec Bank (Australia) Limited (Investec Australia) substantially strengthened its balance sheet during the year ended 31 March 2012 and has continued to build innovative platforms for future business growth. This strategy has been successful, primarily due to the sale of the majority of an legacy default property loan book, the development of existing business areas and the introduction of new growth initiatives. As a result, Investec Australia's balance sheet reflects: - Our core liquidity ratio is 35.7%; - Our Level 2 capital adequacy ratio is 17.5% (tier 1 of 14.6%); our Level 1 capital adequacy ratio is 16.6% (tier 1 of 13.6%); - Our default loans have reduced by 81% from $372.1 million at 31 March 2011 to $69.9 million at 31 March 2012; - Our deposits and wholesale funding have increased by 7% to $3.6 billion, including $2.0 billion from Private Clients, since 31 March 2011. With a very strong balance sheet, we are now well-positioned to grow our core businesses and benefit from the opportunities as a Specialist Bank which we believe will emerge as markets recover. These targeted business initiatives and innovative strategies include: - Selectively growing our loan portfolio with high quality clients in identified sectors; - Reshaping our high net worth platform towards a more focused offering of integrated solutions, lending for business, property or other investment purposes, corporate advisory, treasury and specialist investment products; - Expanding our Professional Finance business by further investment and developing additional products and services; - Diversifying our deposit base; - Building a balanced business model between lending and non-lending income; - Growing our Financial Markets business to include foreign exchange, interest rate and other treasury products; - Increasing the scale and diversity of our Asset Finance business to build a loan book of size and quality featuring good returns; - Expanding and integrating our Corporate Finance, Securities and Capital Markets offerings in the resources sector; - Further leveraging our expertise and acknowledged track record in renewable energy and social infrastructure advisory and development; - Growing and refining our fund and related activities in property and aviation.
2. Financial Performance As part of year end reporting at 31 March 2011, Investec Australia indicated its objective to divest and exit non-core businesses unlikely to provide growth opportunities, and / or cease to fall within the framework of tightened credit risk. This resulted in closing our property development finance business, including the sale of our default loan book referred to in 1 above. To reflect this in a meaningful way, results have been allocated between ongoing core businesses and the property development finance business whose loan assets were substantially sold or recovered. For the year ended 31 March 2012, Investec Australia has reported a pre impairments profit of $45.9 million (2011: $70.3 million) from its ongoing core activities. After impairments the profit from core activities was $25.1 million (2011: $51.0 million).
1
The net result is summarised below: Profit / (loss) before income tax
$m Core businesses Non core property development finance business
Year ended 31-Mar 2012
Year ended 31-Mar 2011
25.1 (126.8)
51.0 (48.9)
(101.7)
2.1
While the sale of the majority of the non core default loan portfolio resulted in a substantial loss, the considerable benefit arising is the significant decrease in default loans and a very much strengthened balance sheet. At 31 March 2012, Investec Australia’s loan book was $3.0 billion. In line with our previously-stated strategy of diversifying its loan book, Investec Australia focused on diversifying loans across all sectors in which it operates. We are pleased to report that our Professional Finance business now comprises in excess of 55% of the loan book. Total deposits and wholesale funding (excluding securitised liabilities and subordinated liabilities) at 31 March 2012 were $3.6 billion, including $2.0 billion of Private Client deposits, up 7% since March 2011. Wholesale funding has actively been managed to maintain high liquidity levels.
3. Strategy and Outlook Investec Australia's direction continues to be as a specialist investment bank to both private clients and corporate and institutional markets. Our aim is to create wealth for our clients. We lend, we provide investment opportunities and we find solutions. Our outlook is positive and optimistic as we continue to implement the initiatives outlined above. Our strong balance sheet, sound risk disciplines, ongoing investment in quality people and systems allow us to look forward to the 2013 year and beyond with enthusiasm and confidence, and we are well- positioned to capitalise on the opportunities the changing market landscape is likely to present.
4. Presentation of Information The information contained in this report is presented in Australian dollars and values have been rounded to the nearest million dollars unless otherwise stated.
2
Restatements and presentation
In terms of Investec's recent presentations and announcements the Investec group has positioned its strategic discussions around three core business areas namely, Asset Management, Wealth & Investment and Specialist Banking. In some respects the group believes that it has historically overcomplicated its external disclosures by elaborating on six core areas of business. As you would have already seen in the Investec group's recent presentations all the banking businesses have been combined under one broader umbrella of Specialist Banking. As a result the Investec group has chosen to refine some of its disclosures which are explained further below. The Investec group believes that these refinements provide greater clarity on the key income and balance sheet drivers of its business. Commentary on income statement reclassifications • The previously reported principal transaction income line item has been split into the following line items: o Investment income: income, other than margin, from securities held for the purpose of generating interest yield, dividends and capital appreciation o Client flow trading income: income from trading activities arising from facilitating client activities o Income from balance sheet management and other trading activities: includes proprietary trading income and other gains and losses as well as income earned from the balance sheet management desk
Commentary on balance sheet reclassifications The main driver behind the revision to the balance sheet is to enable a better understanding of Investec's exposures and to minimise reconciliation points to the detailed risk disclosures in the annual report. It is noted that there are no measurement changes nor are there any changes to total assets, liabilities and equity. Each category of reclassification is noted below: • Cash equivalent corporate paper o Cash equivalent advances to customers has been renamed to "non-sovereign, non-bank cash placements". These balances represent short term placements in corporates that run an in-house treasury function. • Loans and securitisation o To better align the balance sheet with the group's risk management disclosures, loans and advances and securitised assets that form part of our "core" lending activities has been separated from assets that are in warehoused facilities and structured credit investments arising out of our securitisation and principal finance activities. This has resulted in a need to split loans and advances and securitised assets into two balance sheet categories for each. Securitised liabilities has been split into two line items to enable the relationship with securitised assets to be clearly identified. • Securities reclassification o The bank’s previous balance sheet split securities (other than lending related) into two key line items being trading and investment securities. This classification was driven by the accounting rule sets that mainly distinguish between instruments fair valued through profit and loss, those carried at amortised cost (held to maturity) and those fair valued through equity (available for sale). The bank is of the view that disclosure of the nature of exposures on the balance sheet, distinguishing between instruments held to manage balance sheet liquidity, as principal exposure and balance Commentary on line of business segmental reclassifications The Investec group previously reported segmental disclosures by six core business lines as well as including a segment for the Investec group's central functions. The Investec group is now disclosing its segmental disclosures in three core business lines, namely, Asset Management, Wealth & Investment and Specialist Banking. In this regard: • The income statement format has been revised as discussed above • To align with the information provided to the Chief operating Decision Maker, the Private Banking, Investment Banking, Capital Markets and Group Services and Other divisions have now been grouped under one banner and collectively referred to as Specialist Banking for the bank. Accordingly no additional disclosures have been provided regarding the segmental results as the bank only has one segment and significant information was provided in the income statement and balance sheet to comply with the requirements of IAS 34. The total operating profit has however, not changed from that which was previously reported Further information on these restatements will be provided in the annual financial statements.
3
Overview of results 31 March 2012 Total group profit/ (loss) before income tax ($m) Ongoing core business ($m) Non core property development finance business ($m) Total shareholders' equity ($m) Total assets ($m) Customer deposits ($m) Retail deposits ($m) Cash and liquid assets ($m) Leverage ratio Capital adequacy ratio (Level 2) Tier 1 ratio (Level 2) Capital adequacy ratio (Level 1) Tier 1 ratio (Level 1) Liquidity ratio
(101.7) 25.1 (126.8) 598.0 5,232.2 2,370.0 2,012.5 1,578.1 8.7 x 17.5% 14.6% 16.6% 13.6% 35.7%
4
31 March 2011 2.1 51.0 (48.9) 683.9 5,375.0 2,211.3 1,877.0 1,467.7 7.8 x 17.6% 14.7% 16.8% 13.9% 32.4%
Income statement
$m Interest income Interest expense Net interest income
Year to
Year to
31 March 2012
31 March 2011
382.1 (281.0) 101.1
406.3 (287.7) 118.6
58.3 (5.2) (12.4) 16.7 (1.7) 0.1 55.8
65.3 (6.4) 14.8 10.6 (0.4) (1.3) 0.4 83.0
156.9 (152.0) 4.9 (106.6) (101.7) 30.1 (71.6)
201.6 (140.5) 61.1 (59.0) 2.1 (0.8) 1.3
Fee and commission income Fee and commission expense Investment income Client flow trading income Other trading income Trading income arising from balance sheet management activities Share of profit/(loss) of investments accounted for using the equity method Other income Total operating income Operating costs Net income before impairments Impairment losses on loans, advances and investments Profit/(loss) before income tax Income tax (expense)/benefit Profit/(loss) attributable to members
Segmental information - business analysis Profit / (loss) before income tax ($m) Private client activities - made up of: Ongoing core business Non core property development finance business Capital markets Investment banking Property investments Group services and other activities Total
Year to
Year to
31 March 2012
31 March 2011
14.1 (126.8) 19.1 (5.5) 4.7 (7.3) (101.7)
5
31.8 (48.9) 16.1 (10.1) 11.6 1.6 2.1
Consolidated balance sheet Unaudited $m Assets Cash and balances at central banks Loans and advances to banks Sovereign debt securities Bank debt securities Other debt securities Settlement debtors Derivative financial instruments Trading book securities arising from customer flows Investment Portfolio Loans and advances to customers Own originated loans and advances to customers securitised Interests in associated undertakings Deferred taxation assets Other assets Property and equipment Goodwill Intangible assets Intergroup Total assets
31 March 2012
31 March 2011
277.7 105.6 357.6 817.7 126.3 9.5 206.3 10.6 18.6 2,179.9 825.2 8.0 68.7 103.5 15.1 90.0 11.1 0.7 5,232.1
240.9 149.6 348.2 821.2 123.3 0.3 125.0 25.4 2,553.2 749.7 2.5 32.5 71.5 7.0 90.0 8.4 (0.9) 5,347.8
134.0 2,370.0 1,198.6 812.7 47.0 71.5 4,633.8
6.0 75.0 2,205.3 1,545.3 732.3 29.3 70.7 4,663.9
Total equity
598.3
683.9
Equity Share capital Retained earnings Other reserves Total equity
291.7 301.0 5.4 598.1
291.7 364.2 28.0 683.9
Liabilities Deposits by banks Derivative financial instruments Customer accounts(deposits) Debt securities in issue Liabilities arising on securitisation of own originated loans and advances Other liabilities Subordinated debt Total liabilities
6
Asset quality
$m
31 March 2012
Current loans to customers Total gross non current loans to customers Past due loans to customers (1-60 days and management not concerned) Special mention loans to customers Default loans to customers Gross loans to customers
31 March 2011
2,930.1 94.1 22.0 2.2 69.9 3,024.2
2,937.0 431.1 37.5 21.5 372.1 3,368.1
(18.9) (2.4) (16.5)
(53.3) (2.4) (50.9)
Net loans to customers
3,005.3
3,314.8
Average gross loans
3,185.3
3,228.1
Total gross non-current loans to customers - Gross loans to customers that are past due but not impaired - Gross loans to customers that are impaired
94.1 40.3 53.8
431.1 217.6 213.5
Total income statement charge for impairments on loans
106.1
58.8
Gross loans to customers that are impaired Specific impairments Impaired loans net of specific impairments
53.8 (16.5) 37.3
213.5 (50.9) 162.6
55.2 -
162.6 -
0.5% 23.6% 2.3% 1.2%
1.5% 13.7% 11.0% 4.8%
Total impairments Portfolio impairments Specific impairments
Collateral and other credit enhancements Net default loans to customers (limited to zero) Specific impairments as a % of gross loans to customers Specific impairments as a % of gross default loans Gross defaults as a % of gross loans to customers Impaired loans net of specific impairments as a % of gross loans to customers
7
Capital adequacy (Level 2) 31 March 2012
$m Regulatory capital Tier 1 Called up share capital Retained income Other reserves Total Tier 1 Less: deductions Net Tier 1 Capital (net of deductions) Tier 2 Total capital Risk-weighted assets (banking and trading) Credit risk - prescribed standardised exposure classes Corporates Secured on real estate property Counterparty risk on trading positions Short term claims on institutions and corporates Retail Institutions Other exposure classes Equity risk - standardised approach Listed equities Unlisted equities Market risk - portfolios subject to standard method Interest rate Foreign exchange Commodities Operational risk - standardised approach
31 March 2011
291.7 301.2 (7.0) 585.9 (148.1) 437.8
291.7 364.4 (5.0) 651.1 (153.0) 498.1
86.8 86.8
98.0 98.0
524.6
596.1
2,997.9 2,530.7 2,820.2 32.4 57.0 13.1 68.4 108.9 (569.3) 67.4 15.8 51.6 16.5 13.8 0.4 2.3 383.3
3,386.9 2,956.6 2,265.8 44.5 66.1 22.9 87.5 94.7 375.1 57.4 19.7 37.7 14.4 8.5 0.6 5.3 358.5
Capital adequacy ratio (Level 2) Tier 1 ratio (Level 2)
17.5% 14.6%
17.6% 14.7%
Capital adequacy ratio - pre operational risk (Level 2) Tier 1 ratio - pre operational risk (Level 2)
20.1% 16.7%
19.7% 16.4%
Capital adequacy ratio (Level 1) Tier 1 ratio (Level 1)
16.6% 13.6%
16.8% 13.9%
Capital adequacy ratio - pre operational risk (Level 1) Tier 1 ratio - pre operational risk (Level 1)
18.8% 15.4%
18.5% 15.3%
8
Executive summary
1. Introduction Investec Bank (Australia) Limited (Investec Australia) substantially strengthened its balance sheet during the year ended 31 March 2012 and has continued to build innovative platforms for future business growth. This strategy has been successful, primarily due to the sale of the majority of an legacy default property loan book, the development of existing business areas and the introduction of new growth initiatives. As a result, Investec Australia's balance sheet reflects: - Our core liquidity ratio is 35.7%; - Our Level 2 capital adequacy ratio is 17.5% (tier 1 of 14.6%); our Level 1 capital adequacy ratio is 16.6% (tier 1 of 13.6%); - Our default loans have reduced by 81% from $372.1 million at 31 March 2011 to $69.9 million at 31 March 2012; - Our deposits and wholesale funding have increased by 7% to $3.6 billion, including $2.0 billion from Private Clients, since 31 March 2011. With a very strong balance sheet, we are now well-positioned to grow our core businesses and benefit from the opportunities as a Specialist Bank which we believe will emerge as markets recover. These targeted business initiatives and innovative strategies include: - Selectively growing our loan portfolio with high quality clients in identified sectors; - Reshaping our high net worth platform towards a more focused offering of integrated solutions, lending for business, property or other investment purposes, corporate advisory, treasury and specialist investment products; - Expanding our Professional Finance business by further investment and developing additional products and services; - Diversifying our deposit base; - Building a balanced business model between lending and non-lending income; - Growing our Financial Markets business to include foreign exchange, interest rate and other treasury products; - Increasing the scale and diversity of our Asset Finance business to build a loan book of size and quality featuring good returns; - Expanding and integrating our Corporate Finance, Securities and Capital Markets offerings in the resources sector; - Further leveraging our expertise and acknowledged track record in renewable energy and social infrastructure advisory and development; - Growing and refining our fund and related activities in property and aviation.
2. Financial Performance As part of year end reporting at 31 March 2011, Investec Australia indicated its objective to divest and exit non-core businesses unlikely to provide growth opportunities, and / or cease to fall within the framework of tightened credit risk. This resulted in closing our property development finance business, including the sale of our default loan book referred to in 1 above. To reflect this in a meaningful way, results have been allocated between ongoing core businesses and the property development finance business whose loan assets were substantially sold or recovered. For the year ended 31 March 2012, Investec Australia has reported a pre impairments profit of $45.9 million (2011: $70.3 million) from its ongoing core activities. After impairments the profit from core activities was $25.1 million (2011: $51.0 million).
1
The net result is summarised below: Profit / (loss) before income tax
$m Core businesses Non core property development finance business
Year ended 31-Mar 2012
Year ended 31-Mar 2011
25.1 (126.8)
51.0 (48.9)
(101.7)
2.1
While the sale of the majority of the non core default loan portfolio resulted in a substantial loss, the considerable benefit arising is the significant decrease in default loans and a very much strengthened balance sheet. At 31 March 2012, Investec Australia’s loan book was $3.0 billion. In line with our previously-stated strategy of diversifying its loan book, Investec Australia focused on diversifying loans across all sectors in which it operates. We are pleased to report that our Professional Finance business now comprises in excess of 55% of the loan book. Total deposits and wholesale funding (excluding securitised liabilities and subordinated liabilities) at 31 March 2012 were $3.6 billion, including $2.0 billion of Private Client deposits, up 7% since March 2011. Wholesale funding has actively been managed to maintain high liquidity levels.
3. Strategy and Outlook Investec Australia's direction continues to be as a specialist investment bank to both private clients and corporate and institutional markets. Our aim is to create wealth for our clients. We lend, we provide investment opportunities and we find solutions. Our outlook is positive and optimistic as we continue to implement the initiatives outlined above. Our strong balance sheet, sound risk disciplines, ongoing investment in quality people and systems allow us to look forward to the 2013 year and beyond with enthusiasm and confidence, and we are well- positioned to capitalise on the opportunities the changing market landscape is likely to present.
4. Presentation of Information The information contained in this report is presented in Australian dollars and values have been rounded to the nearest million dollars unless otherwise stated.
2
Restatements and presentation
In terms of Investec's recent presentations and announcements the Investec group has positioned its strategic discussions around three core business areas namely, Asset Management, Wealth & Investment and Specialist Banking. In some respects the group believes that it has historically overcomplicated its external disclosures by elaborating on six core areas of business. As you would have already seen in the Investec group's recent presentations all the banking businesses have been combined under one broader umbrella of Specialist Banking. As a result the Investec group has chosen to refine some of its disclosures which are explained further below. The Investec group believes that these refinements provide greater clarity on the key income and balance sheet drivers of its business. Commentary on income statement reclassifications • The previously reported principal transaction income line item has been split into the following line items: o Investment income: income, other than margin, from securities held for the purpose of generating interest yield, dividends and capital appreciation o Client flow trading income: income from trading activities arising from facilitating client activities o Income from balance sheet management and other trading activities: includes proprietary trading income and other gains and losses as well as income earned from the balance sheet management desk
Commentary on balance sheet reclassifications The main driver behind the revision to the balance sheet is to enable a better understanding of Investec's exposures and to minimise reconciliation points to the detailed risk disclosures in the annual report. It is noted that there are no measurement changes nor are there any changes to total assets, liabilities and equity. Each category of reclassification is noted below: • Cash equivalent corporate paper o Cash equivalent advances to customers has been renamed to "non-sovereign, non-bank cash placements". These balances represent short term placements in corporates that run an in-house treasury function. • Loans and securitisation o To better align the balance sheet with the group's risk management disclosures, loans and advances and securitised assets that form part of our "core" lending activities has been separated from assets that are in warehoused facilities and structured credit investments arising out of our securitisation and principal finance activities. This has resulted in a need to split loans and advances and securitised assets into two balance sheet categories for each. Securitised liabilities has been split into two line items to enable the relationship with securitised assets to be clearly identified. • Securities reclassification o The bank’s previous balance sheet split securities (other than lending related) into two key line items being trading and investment securities. This classification was driven by the accounting rule sets that mainly distinguish between instruments fair valued through profit and loss, those carried at amortised cost (held to maturity) and those fair valued through equity (available for sale). The bank is of the view that disclosure of the nature of exposures on the balance sheet, distinguishing between instruments held to manage balance sheet liquidity, as principal exposure and balance Commentary on line of business segmental reclassifications The Investec group previously reported segmental disclosures by six core business lines as well as including a segment for the Investec group's central functions. The Investec group is now disclosing its segmental disclosures in three core business lines, namely, Asset Management, Wealth & Investment and Specialist Banking. In this regard: • The income statement format has been revised as discussed above • To align with the information provided to the Chief operating Decision Maker, the Private Banking, Investment Banking, Capital Markets and Group Services and Other divisions have now been grouped under one banner and collectively referred to as Specialist Banking for the bank. Accordingly no additional disclosures have been provided regarding the segmental results as the bank only has one segment and significant information was provided in the income statement and balance sheet to comply with the requirements of IAS 34. The total operating profit has however, not changed from that which was previously reported Further information on these restatements will be provided in the annual financial statements.
3
Overview of results 31 March 2012 Total group profit/ (loss) before income tax ($m) Ongoing core business ($m) Non core property development finance business ($m) Total shareholders' equity ($m) Total assets ($m) Customer deposits ($m) Retail deposits ($m) Cash and liquid assets ($m) Leverage ratio Capital adequacy ratio (Level 2) Tier 1 ratio (Level 2) Capital adequacy ratio (Level 1) Tier 1 ratio (Level 1) Liquidity ratio
(101.7) 25.1 (126.8) 598.0 5,232.2 2,370.0 2,012.5 1,578.1 8.7 x 17.5% 14.6% 16.6% 13.6% 35.7%
4
31 March 2011 2.1 51.0 (48.9) 683.9 5,375.0 2,211.3 1,877.0 1,467.7 7.8 x 17.6% 14.7% 16.8% 13.9% 32.4%
Income statement
$m Interest income Interest expense Net interest income
Year to
Year to
31 March 2012
31 March 2011
382.1 (281.0) 101.1
406.3 (287.7) 118.6
58.3 (5.2) (12.4) 16.7 (1.7) 0.1 55.8
65.3 (6.4) 14.8 10.6 (0.4) (1.3) 0.4 83.0
156.9 (152.0) 4.9 (106.6) (101.7) 30.1 (71.6)
201.6 (140.5) 61.1 (59.0) 2.1 (0.8) 1.3
Fee and commission income Fee and commission expense Investment income Client flow trading income Other trading income Trading income arising from balance sheet management activities Share of profit/(loss) of investments accounted for using the equity method Other income Total operating income Operating costs Net income before impairments Impairment losses on loans, advances and investments Profit/(loss) before income tax Income tax (expense)/benefit Profit/(loss) attributable to members
Segmental information - business analysis Profit / (loss) before income tax ($m) Private client activities - made up of: Ongoing core business Non core property development finance business Capital markets Investment banking Property investments Group services and other activities Total
Year to
Year to
31 March 2012
31 March 2011
14.1 (126.8) 19.1 (5.5) 4.7 (7.3) (101.7)
5
31.8 (48.9) 16.1 (10.1) 11.6 1.6 2.1
Consolidated balance sheet Unaudited $m Assets Cash and balances at central banks Loans and advances to banks Sovereign debt securities Bank debt securities Other debt securities Settlement debtors Derivative financial instruments Trading book securities arising from customer flows Investment Portfolio Loans and advances to customers Own originated loans and advances to customers securitised Interests in associated undertakings Deferred taxation assets Other assets Property and equipment Goodwill Intangible assets Intergroup Total assets
31 March 2012
31 March 2011
277.7 105.6 357.6 817.7 126.3 9.5 206.3 10.6 18.6 2,179.9 825.2 8.0 68.7 103.5 15.1 90.0 11.1 0.7 5,232.1
240.9 149.6 348.2 821.2 123.3 0.3 125.0 25.4 2,553.2 749.7 2.5 32.5 71.5 7.0 90.0 8.4 (0.9) 5,347.8
134.0 2,370.0 1,198.6 812.7 47.0 71.5 4,633.8
6.0 75.0 2,205.3 1,545.3 732.3 29.3 70.7 4,663.9
Total equity
598.3
683.9
Equity Share capital Retained earnings Other reserves Total equity
291.7 301.0 5.4 598.1
291.7 364.2 28.0 683.9
Liabilities Deposits by banks Derivative financial instruments Customer accounts(deposits) Debt securities in issue Liabilities arising on securitisation of own originated loans and advances Other liabilities Subordinated debt Total liabilities
6
Asset quality
$m
31 March 2012
Current loans to customers Total gross non current loans to customers Past due loans to customers (1-60 days and management not concerned) Special mention loans to customers Default loans to customers Gross loans to customers
31 March 2011
2,930.1 94.1 22.0 2.2 69.9 3,024.2
2,937.0 431.1 37.5 21.5 372.1 3,368.1
(18.9) (2.4) (16.5)
(53.3) (2.4) (50.9)
Net loans to customers
3,005.3
3,314.8
Average gross loans
3,185.3
3,228.1
Total gross non-current loans to customers - Gross loans to customers that are past due but not impaired - Gross loans to customers that are impaired
94.1 40.3 53.8
431.1 217.6 213.5
Total income statement charge for impairments on loans
106.1
58.8
Gross loans to customers that are impaired Specific impairments Impaired loans net of specific impairments
53.8 (16.5) 37.3
213.5 (50.9) 162.6
55.2 -
162.6 -
0.5% 23.6% 2.3% 1.2%
1.5% 13.7% 11.0% 4.8%
Total impairments Portfolio impairments Specific impairments
Collateral and other credit enhancements Net default loans to customers (limited to zero) Specific impairments as a % of gross loans to customers Specific impairments as a % of gross default loans Gross defaults as a % of gross loans to customers Impaired loans net of specific impairments as a % of gross loans to customers
7
Capital adequacy (Level 2) 31 March 2012
$m Regulatory capital Tier 1 Called up share capital Retained income Other reserves Total Tier 1 Less: deductions Net Tier 1 Capital (net of deductions) Tier 2 Total capital Risk-weighted assets (banking and trading) Credit risk - prescribed standardised exposure classes Corporates Secured on real estate property Counterparty risk on trading positions Short term claims on institutions and corporates Retail Institutions Other exposure classes Equity risk - standardised approach Listed equities Unlisted equities Market risk - portfolios subject to standard method Interest rate Foreign exchange Commodities Operational risk - standardised approach
31 March 2011
291.7 301.2 (7.0) 585.9 (148.1) 437.8
291.7 364.4 (5.0) 651.1 (153.0) 498.1
86.8 86.8
98.0 98.0
524.6
596.1
2,997.9 2,530.7 2,820.2 32.4 57.0 13.1 68.4 108.9 (569.3) 67.4 15.8 51.6 16.5 13.8 0.4 2.3 383.3
3,386.9 2,956.6 2,265.8 44.5 66.1 22.9 87.5 94.7 375.1 57.4 19.7 37.7 14.4 8.5 0.6 5.3 358.5
Capital adequacy ratio (Level 2) Tier 1 ratio (Level 2)
17.5% 14.6%
17.6% 14.7%
Capital adequacy ratio - pre operational risk (Level 2) Tier 1 ratio - pre operational risk (Level 2)
20.1% 16.7%
19.7% 16.4%
Capital adequacy ratio (Level 1) Tier 1 ratio (Level 1)
16.6% 13.6%
16.8% 13.9%
Capital adequacy ratio - pre operational risk (Level 1) Tier 1 ratio - pre operational risk (Level 1)
18.8% 15.4%
18.5% 15.3%
8
