Investec Stock

Good morning. It's our pleasure to welcome you to this results presentation. We're coming to you today from London offices, and we're really looking forward to presenting our business to you.

Just as I start, it is clear that we are operating in a very challenged environment. Geopolitics has dominated markets for quite some time. And we also know that we are in a period where there is substantial change that is occasioned by artificial intelligence. So we see great volatility and yet our business has been able to produce resilient results. So I'm really grateful to my colleagues for the work that they have done over the last period.

In times of volatility, it is important that we hold high levels of capital and high levels of liquidity. Liquidity may be expensive, but it is important that we continue to be conservative in our positioning. This enables us, firstly, to continue to support our clients, but also to reinvest in the business. As indicated from last year, we are in a heightened investment period, choosing to have faith in the future by investing today for a larger, better business for our clients. So we've been making steady progress on our investment program. And later today, we will give you a peak into our private lines business. And importantly, we also will give you a brief update on our corporate mid-market business and the progress we have made since we made the announcement last year. We look forward to do that in the second half of the day.

As we indicated in our announcement, we're very confident that from 2028, the investment program will begin to show very positive results and that will result in an inflection in our growth and an inflection in our returns to shareholders. As we announced last year and the year before, we remain committed to reaching ROEs of 16% by financial year 2030 and 18% RoTE by that time. These are returns that we're committed to, we are on track to achieving. But importantly, these returns are a consequence of what we do for our clients. It is really important for us in the business not to lose site of what we mean to our clients, how we serve them, how we support them through very difficult times and how we continue to be the their trusted partner throughout their life cycles.

Now turning to the results. We see adjusted earnings per share increasing by 4.8%, as I said, in a very challenged environment. We have seen, if you look at key drivers of performance, a double-digit growth in funds under management. That really is pleasing in an environment that is so volatile and quite tough. We also see a high-teens increase in loans and advances and similarly, a high-teens increase in deposits. That tells us that our clients continue to trust us and continue to see us as a preferred provider to them.

If you look at the third block in terms of our net asset value, that is increased over the prior year by 8.3%. That means we're generating substantial capital. That allows us, as I said earlier, to reinvest in our business, but also to reward the providers of capital.

Looking at the last graphic on this chart, we see that return on equity is at 13.6%. And if you look at that graph, it looks flat, but I have to remind you that in September 2023, we concluded a combination of our IWNI business with Rathbones and that increased our capital base. So the return that you see there on a like-for-like basis is 1.2% higher compared to the '23 and '24 number that you see there. So steady progress in delivery of returns to our shareholders. Nishlan will unpack the numbers much more a little later. Just a number of comments on this slide.

We see our cost-to-income ratio being at 52.9%, which is in the middle of our 52% to 54% guided range. Cost discipline continues, although I must point out that because we're making significant investments, and we are capitalizing a very small portion of that investment, clearly, there is an impact on our profitability. As I said earlier, we are focused on the future, and we will take the pain in the short term. We see our credit loss ratio improving slightly from 38 basis points to 36 basis points. So credit quality continues to be good. Clearly, interest rates have not come down to the extent we had expected, and if we do get to that period, which at the moment looks a bit far given the impact of the closure of the Strait of Hormuz and the war in the Middle East, inflation may be higher for longer. So we may not see the expected reduction in interest rates, but very pleased with the credit loss ratio and asset quality in general.

If you look at our tangible net asset value at 553.1p, that is an increase of 9.2% and relative to the prior year. So very happy with the performance of the business in that regard. The Board declared a final dividend. That takes our total dividend for the year to 38.5p, representing an increase of 5.5% over the prior period. We're also pleased that we've completed the share buyback that we announced at this time last year that we would return to our shareholders about GBP 110 million or ZAR 2.5 billion in terms of the buyback. So really pleased that, that has been completed.

We always manage our capital dynamically. The first call is to reinvest in the business. Obviously, to the extent that we do not have enough investment, we would then return capital in special dividends. Our dividend policy remains unchanged. So we continue to be quite predictable in terms of retaining capital to our shareholders. We also have indicated that we remain open to potential opportunities, particularly in the wealth space where we would like to continue to make inroads and to increase the share of our capital-light revenues. Later today, we will talk about our private line business as I've said, and you will see what plans we have to boost the revenues that come from that segment of our client franchises.

Moving along, while we obviously pursue profits as we do, and we do so in service of our clients, we also are very mindful of our responsibility to make sure that we are a positive contributor both to society and that we also do make sure that we reduce our impact on the environment. So we've continued to meet our fossil fuel requirements and commitments. We also are driving quite hard throughout the businesses, our targets and activities related to sustainable and transition finance. We, last year, announced a target of GBP 18 billion or so. We were able to achieve our first year target of over GBP 3 billion. We continue to do a lot of work in helping our clients, firstly, to understand what is required in terms of transition and climate and obviously then advocating and helping them to have their own plans. So as we continue to report on our Scope 3 emissions, this is quite important, the advocacy helping our clients and making them really come along the journey as it were over time. So we continue to be very pleased with our progress towards our commitment to net zero by 2050.

On that note, I'm going to ask Nishlan to go a little deeper into the numbers. Nish?

Thanks, Fani. It's always a privilege to stand up in front of you. So if I get into the numbers, I think just a little bit on the context. The macroeconomic environment actually in this period that we're reporting was improving from a year-to-year perspective. And we've seen GDP growth improvement in both markets that we operate in. And in fact, across the geographies that we do. You do see an outlook there, which seems to indicate that there might be a bit of tempering and from a South African perspective, possibly higher achievement. However, that's at risk. I think if we look at the impacts that have come through in the first quarter and to some extent, the fact that inflation and the impact of inflation is still in the system and the constraints of supply are still in the system. So I think at the end of the day, let's hope we can get there.

From an interest rate perspective, again, we were, in this period, in a reducing interest rate cycle, and we've seen average interest rates drop over the period from South Africa from about 11.5% to 10.5% and from a plc perspective, from 4.95% to 4.04% million. To some extent, we will continue to see the drop off as that average in effect comes out of the system. However, the outlook for interest rates is definitely changing. So to an extent, our economic outlook was for interest rates to actually reduce by about 50 to 75 basis points over this financial year. The reality is we see these rates remain at least steady for most of this financial year with some risk to the extent that you may see some lift up depending on inflation outlook.

From a markets perspective, we do report in sterling. And the contribution from the South African balance sheet is stronger in this period given the fact that the closing exchange rate has actually improved by just over 4% -- well, close to 5%. Interestingly enough, the average exchange rate for the period is actually identical year-on-year. So there's very little income statement noise. And similarly, from a markets perspective, I mean, if you look at this chart, we probably think the world is pretty rosy out there because markets have improved quite strongly. Actually, in April '25, we did see quite a sharp drop off. And to some extent, that influenced AUM as well as fees in the first quarter of this financial year, but quite a sharp recovery as we look forward. I think as we get into March, markets have reacted to the war, have reacted to some of the constraints at play, but not significantly overall.

And that brings us to the drivers, and I think I'm quite pleased for reports. I mean growth of 15.4% or 10.5% in neutral currency of FUM with very strong net inflows. We also did have an acquisition in this period bolstering our activity in Switzerland, which has added just over GBP 300 million of AUM and net inflows of around about ZAR 23 billion into our discretionary portfolio in South Africa. Similarly, we've seen core loans grow by 9.6%. And in fact, in our private client portfolios in both South Africa and in the U.K., we saw growth of over 10% in terms of lending activity. Not all of that is beneficial to the same extent to the bottom line because in a highly competitive environment, margins continue to be under pressure.

Now if we look at the group performance, the blank pages so that I can introduce an income statement in a way that we can, just follow the dots, okay? So bear with me. At the very bottom, we had adjusted operating profit growing by 3.4% in the period from GBP 920 million to GBP 951 million, with total revenue growing by 4.2% over the period. Net interest income reduced by 1.6%. And for our business, lower interest rates result in lower earnings for our endowment capital. We have very little impact on structural hedges, but that has had some impact in terms of protecting margin from a U.K. perspective. But we continue to improve the cost of money and the cost of deposits by continuing to focus on the growth of our retail deposit base as well as the strong growth in our loan books, which has helped to effectively neutralize the impact of lower interest rates.

Noninterest income grew strongly over the period, growing by 13.6%, supported across the business by increased activity with our clients, by realizations of some of our exposures in a positive manner and at the end of the day, really driven by core activity driving fees across the business. Our expected credit loss, as Fani had indicated, remained at about 36 basis points. It's, in fact, fairly comparable year-on-year. To some extent, we had lower recoveries and therefore, that does mask the fact that actually -- there was actually a better improvement in the overall experience in terms of credit loss ratio. But you would see from an asset quality perspective, pretty much comparable year-on-year.

And then operating costs did increase by 4.7%, and in fact, fixed costs are up over inflation in both geographies. And I'll unpack some of the investment activity that's going through the income statement as we look forward. Cost-to-income ratio at 52.9%, again within the 52% to 54% guidance that we have provided.

Now if we get into some of the aspects, if I look at, in particular, IT spend, that remains at about 20% of our overall cost base with a total expenditure in this period of GBP 246 million. But what I will draw to your attention is the bar chart on the right-hand side, where you see, within this financial year, we actually spent around about 50% of that on areas of growth and enhancing our platforms and that includes implementation of new age technology into the organization as well as modernization of our platforms. Some of those are still in play, but we do have delivery that comes online within the next year and the following financial year, which is going to bring significant change.

I think like all of us did see with [indiscernible] coming out 3 weeks ago, we are not in a static world. AI continues to develop at a pace and continues to have an influence. And in fact, if any of you have picked up our analyst booklet, that booklet was reviewed by one of our agents. And if you pick up an error, please ask the computer. Okay. So if you look at our organization, we have 7,777 permanent employees in the organization, but we also have 800 agents that are now running deeply into the organization. And to some extent, we're starting to see benefit, but it is still early to measure where that leads to. I think our commitment to you is that we see ourselves continuing to operate within our cost to income ratios of 52% to 54% because on the flip side, there is a cost to implementing technology. And from our organization perspective, we will continue to stay as close as possible to development out there. I think from a cyber perspective, we remain highly vigilant. We are close to new age development and have access in the right places, which we will continue to develop. But our responsibility is also to make sure that we have the right ways to deploy. And at the end of the day, you are going to need to be able to check and understand what has been deployed. So it's not just easy accepting code because it's been written by a machine. You have the responsibility to make sure that, that coal is actually deployed correctly.

Now on the very bottom right-hand side, our cloud modernization. When we first start speaking to you guys, that was at about 8%. Last year, we reported it at 48%. And this year, we're at 58%, and we expect that to continue to increase dramatically. And why that is fundamental is because we shift into, again, the new age world where at the end of the day [Audio Gap] all of this is done with protecting our balance sheet. So to date, we have capitalized GBP 20.5 million of software relative to a significant balance sheet that remains insignificant overall.

And in fact, in the next sheet, you will see that since 2025 and to 2028, we're actually deploying around about GBP 282 million in investing in our platforms. Now this will include capability that humans bring into play as well as software capability. But that influences our mid-market strategy. It influences our private client strategies as well as new platforms that we're bringing into play. In fact, some of the technology as we've seen on the deployment of our new finance platforms and the built-in capability that is coming from our service providers is hell of exciting because we can see the transformation. And in some places, some of our research teams tells us that implementations that took months are now being measured in days and weeks because of what's been deployed. Part of what we've got to do is to make sure that we drive it deeply into the organization, and that's really where the effort is right now.

But this investment is significant. It's GBP 282 million and for South Africans that's ZAR 6.3 billion. And if you look at this chart, you will see that the majority of that cost on an annual basis is expensed and carried in our income statement with a small element that is capitalized as we see it come through. The majority of this on early stage is actually operating on a cost-income ratio of greater than 100%. So when we get to a later stage, this will bring in and come into our 52% to 54% as revenue starts kicking in, and we see that really happening from FY '28.

So if I get into our divisional reviews. From a U.K. perspective, overall operating profit increased by 1.3% to 462.7%. The contribution from Wealth & Investment, so that's our share of Rathbones' earnings, actually grew by 17%. In the year to December, Rathbones reported a growth in earnings of just over 4%. And some of that differential is that we actually accruing at 43% rather than 41.25% given the level of treasury stock that is held within that particular business.

Our banking business reported just over GBP 400 million or close to GBP 402 million from GBP 410 million, absorbing lower interest rates and greater activity countering that. Group investments is really our return on our investment in '91, which sits at about 9.2% following their combination activity with Sanlam, and that's really dividend flow that comes in, giving us a return on equity of about 18% on that investment. Group investments -- I mean, group costs, we continue to manage tightly.

Looking at the mix of earnings, I think I've covered this in some detail. Some weakness in NII, really absorbing lower interest and a highly competitive market, offset by book growth and strong fee generation and other noninterest revenue growth in the period. The cost-to-income ratio at 54%, again, is influenced by some of those investments that I've indicated that has been charged through the income statement. But cost to income is a function of revenue and costs, and you -- I have unpacked some of that detail.

Now if we look at impairments, again, the overall credit loss ratio improving from 60 basis points to 57 basis points, but still at the high end of our guided credit loss ratio. With interest rates having come down to some extent, and us seeing that it may plateau at these levels at this stage, we don't necessarily see a letup in this area in the short term. But our overall guided levels, we still remain pretty comfortable with. I think if we look at the staging and the quality of the book, there is nothing to call out. We see no deteriorating trends in any of our portfolios. Obviously, we will continue to pursue recoveries where we can, but at the end of the day, the trending between Stage 1 and Stage 3, we remain pretty comfortable with.

[indiscernible] investment from a U.K. perspective is purely a story of Rathbones. And I think they've provided a quarterly update to the end of March, reporting AUM of GBP 113.6 billion. Rathbones remains committed to enhancing the operating margin to 30% having reported margin in total for the period of 25.2%, closer to 20% towards the end of the year. And their view is that they anticipate getting to a 30% margin by the end of the quarter of the financial year ended 31 December 2026. I think there's been strong implementation of combining these businesses. There's a lot of complexity in bringing together these business platforms. And at the end of the day, delivering GBP 76 million of achieved synergies is well ahead of what was communicated at the time of the execution of the transaction.

Shifting to South Africa. Operating profit increased by 5.2%, with our Wealth and Investment business generating an 8.2% growth in operating profit. The banking business, 6%. Group investments will continue to reduce, but it may remain volatile because there are some elements that are held at fair value. But we continue to realize these portfolios for value, and therefore, that line will continue to become less relevant. Again, group costs are up in the period, but as you would see from a combined group perspective, well managed.

Again, looking at the split of earnings. In South Africa, we did see NII grow and that's notwithstanding lower interest rates. Obviously, the base is very different from a U.K. and a South African perspective. And again, growing our retail deposit base and enhancing our margin through the cost of funding, noting that our business and commercial banking element still has very little influence in the overall cost of money in both jurisdictions. Again, NIR up by 11.3% in the period, strongly supported by growth in fees. The overall cost-to-income ratio for the specialist bank at 48.6%, I think, is a strong base while the costs are well managed across the business.

I think across both South Africa and the U.K., we saw headcount increased by 2.8%, but that has been very specifically focused on areas of growth. We look at the credit loss ratio in South Africa. It's 14 basis points. Last year, it was 15 basis points. And again, there's nothing much to call out in terms of changes to the book and behavior of the overall book itself. Obviously, in both South Africa and the U.K., to the extent that we reached the end of March, some of the economic outlook did worsen. And to an extent, we picked up about GBP 9 million of impairments across South Africa and U.K. for the change that we had to absorb given the conflict and the constraint environment.

Looking at Wealth & Investment. I think [indiscernible] is sitting here in smiling because these numbers are strong. AUM or FUM growing by 9.8% to ZAR 609.6 billion. This business did replatform its underlying platform and has implemented new systems with significant capability for internationally active clients. And all of that has gone live in April and to a great extent has been absolutely successful. Operating margin at 29.6%, again, given the nature of the business, I think that is a hell of a strong.

And that brings us to the overall picture for the group. I'm not going to repeat the numbers. I think we've got a lot of the detail across and our returns on equity achieved in the period. I think it's worth noting that, that return on equity is also absorbing growth in capital that had to be deployed in the period. This is particular for Chris Stewart because he did ask me to please explain how this 3.5% result in 4.7% growth in adjusted earnings. And there's a couple of other things that move other than the profitability. Number one is the cost of additional capital instruments, our AT1 and perpetual preference shares. And in fact, in this period, that cost reduced by 6.9% as we had some pre-issued instruments, the older instruments, falling off over the period and some of that double count is now out of the system. We also managed to issue instruments at better pricing in this period. Taxes obviously followed profitability and the impact of buybacks is to reduce revenue as we lose the interest on that capital, but the ultimate benefit coming through with lower weighted average number of shares in issue, which closed at 850.3 million shares. And in fact, if we fast forward to the next year, that full weighting should take that number on an equalized basis out to about 840 million shares.

I've spoken about our return on equity and where we are right now. This sheet also gives you some idea of where the capital is deployed across the group, noting that from a U.K. perspective, a large portion is deployed in our investment in Rathbones and therefore, the differential between tangible and intangible. A recon of our net asset value will indicate a period in which it's really driven by profitability net of distributions, including buybacks that were executed as well as a stronger rand to some extent, positively contributing. The difference between net asset value and tangible net asset value is really the goodwill and intangibles that arises on our investment in the wealth business. And in fact, if I strip that out, the tangible net asset value is actually around about GBP 625 million.

Looking at capital and liquidity. We remain fairly defensive from a balance sheet perspective, and we'll continue to do so. So you see high levels of cash and near cash. Overall, CET1 ratios are strong at 13% from a U.K. perspective. Now to some extent, you see South Africa dropping from 14.8% to 13.6%. That's absolutely expected. And the drivers for that is, to some extent, the buyback has been skewed to South Africa as well as the fact that a capital floor has now come into play, which means that when we calculate risk-weighted assets, we are actually calculating and carrying capital at a higher level because there's a capital floor, which in our book limits some of the benefit of a much higher collateralized and lower risk book itself. That will introduce another shock absorber and another buffer into the capital ratio, specifically pointed at credit risk-weighted assets. Mr. Titi, it's over to you.

Thank you, Nish. I think Nish gave us a really good feel of how the numbers come together over this period. I'm not going to look ahead a little bit. And as I do so, let me just say that our client franchises are very defensive within an environment that is very volatile. We have private clients that are generally more resilient than normal retail clients. And in bad times, like the times we are in, where uncertainty is high, volatility can be unnerving, these clients are durable. Whether you talk about our wealth clients, you talk about our private banking clients. And obviously, we do serve corporate clients that have a level of resilience as well.

So this gives us the confidence that over varying environments and economic cycles, our business model should remain resilient. We also have very deep client relationships that help us in times of difficulty that we can be close to our clients, we can support them, help them through these times. So they continue to lean on us quite heavily because our view is that of being a long-term partner to our clients. We are less transactional. We are more relationship-based in the long term. And as I said, we are also making investments that will support our ability to expand our client ecosystems and client franchises, do more for our clients and as a consequence, get more from them, but in a win-win situation.

So while the environment looks tight, we remain comfortable that our model is resilient in the long term. That's why we are happy to again commit and tell you that we are on track to reaching our 2030 targets. Nishlan gave you a sense of the quantum of the investments we have been making and we are pleased that we are now getting this year -- this financial year to the peak of that investment cycle. He also indicated that we expensed a large portion of those investments. So a combination of a peaking of investment and the starting of revenues coming through makes a big difference for us. In 2028, we indicate that our corporate mid-market proposition in South Africa should meaningfully impact on our earnings. So we do see an inflection point in our returns from '28 and the other investments in the U.K., both the corporate mid-market and private clients and the expanded offering in private lines in South Africa should lead to a much more enhanced set of returns for us in 2030. So -- because 2030 is a bit far, we thought to give the market a sense of what we think the path towards 2030 is, that's why we have given you a midterm report about our expectations in 2028, again, as a consequence of the success of the investment we have made in the afternoon. We will give you a bit more color on the delta that we expect from our private clients businesses. Last year, we gave you a sense of the delta in profits and returns that we expect from our corporate mid-market business.

So in the immediate term volatility is high, in particular, in the U.K. where you also have a political situation that is uncertain. While we have seen our clients do more. For instance, in the last quarter of the year, the first quarter of the calendar year, we were a participant alongside our clients in some of the larger capital raises in the U.K., but the environment is such that decisions are now being delayed a bit because there is a level of volatility. Who comes in as a prime minister and when do they come and what type of policies will they have? So short term, a bit more uncertain in the U.K. So we're guiding for next year that we expect ROE of between 13% and 14%, largely in line with where we are this year. And from 2028, 13.8% to 14.2%, picking up to our long-term outlook.

We're also guiding that our South African business will continue to be at the top end of its performance range. Obviously, the bank continues to perform well there. And you saw the strong numbers from our Wealth and Investment business. So we're getting returns at the top end of the market, if you look at South African operations. Again, this underlines the fact that clients are resilient. They continue to be opportunity focused even in top markets. And it really is important to choose your clients carefully because if you get that right and you can get the service model right and the relationships are long term, you are likely to do better in the long term.

In the U.K., given the fact that the short term has a higher level of uncertainty. Nish showed you the retention of capital within our U.K. business and as we said, we continue to invest. We see returns at the lower end of -- through the cycle range of 13% to 17%. But again, there, we are quite comfortable and confident that the investments we are making will bear fruit. Nishlan indicated that we're comfortable with the asset quality of our business. So as we look forward, we see the credit loss ratio being within the target range that we have indicated, 25 bps to 45 bps. We came in at the center of that at 36 bps this year. Asset quality, as I say, it remains particularly positive.

So as we look out in terms of our businesses, we have people that are quite passionate about our clients, a commitment to those clients and we can only be thankful for the quality of clients we have and for the support that they have given us. The markets are competitive, particularly in low growth scenarios, the fight for clients is quite fierce and that we have been able to continue to depend on the custom of our clients is really particularly pleasing. So as we look forward, our business remains focused. We do fewer things for the people that we have chosen to work for in terms of our client pools. Our business continues to enhance scale and with scale comes a level of efficiency, and we remain particularly relevant to our clients. If we are not relevant to clients, we generally do pack our bags because we are really not adding much to them. We don't want to be a price taker as such. We want to be a value-adding partner to our clients and to be rewarded accordingly for the value that we add. So scale and relevance are important. Strongly capitalized, as Nish indicated. Despite the floors reducing a little bit, our capital levels in South Africa, liquidity remains high. These are uncertain times, so we have to be conservatively capitalize and liquidity has to be conservative as well because we generate strong capital, we are able to reinvest in the business. We are able to continue to reward our shareholders with steady dividends in terms of our dividend policy. And where we have excess capital, we do return that capital to our shareholders as such.

The opportunities for growth are significant. Ours is of well-defined opportunities on which we are executing. I've given you a sense of the progress we're making in South Africa. I've given you a sense that we are hiring in the U.K. for our corporate mid-market this afternoon, we'll give you or later this morning, will give you a sense of the scale of the opportunity, but the credibility of our ability to deliver into those opportunities. So we look forward with confidence and as I said earlier today, we are dedicated to making sure that we deliver enduring with to our clients, to our colleagues inside of our business. If our colleagues are happy and looked after internally, they are in a much better position to continue to support our clients. We are a positive contributor to society where we do operate. I live in South Africa as most people will know, but when I'm here, and Ruth takes us through a lot of the work that we do in our communities, we are filled with pride that we are a positive contributor to society.

We talked about our sustainability targets, and we continue to be a responsible corporate citizen and making sure that the endowment we have in our planet we can hand over to the next generations, and we have not been a negative impact to those. At this juncture then, we will go into questions. I don't even remember how we go into.

We start in the room. Thank you. The order is always important. Any questions from inside this room. Okay. No questions. I'm sure Stephen Koseff is listening in from Sydney. He says, if you don't get questions, just move on. So I will move on to Johannesburg. I've got Donald with a big smile. Donny? We have an echo, if we could fix the echo, please.

No questions in the room, but we do have a couple of questions online.

The first question is from [indiscernible] from Matrix Fund Managers. Well done on a strong solid set of results, credit losses in South Africa remain exceptionally low. To what extent is that driven by the quality of the book versus a deliberately conservative risk culture. Put differently, is there a risk that the group is leaving growth and profitability on the table?

We do get this question from time to time. As I said, we choose the client pools we serve quite carefully. That is what gives us the resilience that we have reported. I mean obviously, as we go forward, we have indicated that we will go into some segments that are likely to push that credit loss ratio up. In the business and commercial banking sector in South Africa, we would expect that we would have a credit loss ratio that is higher than the private banking and the CIB -- private clients and CIB credit loss ratio. So we will be taking more risk. But again, we will choose our clients carefully there. I think we did indicate that the sweet spot will be at the upper end of the business and commercial banking market, probably between ZAR 100 million of revenue to ZAR 300 million, even though the overall the overall revenue qualifier starts lower at ZAR 30 million. So a choice of clients, how we serve them. Do we understand their needs capitally and do we structure as we do. But we are conservative by nature. So I understand the question, but we will be taking more risk as we build our ecosystem a lot wider. The same can be said about the U.K. We have a mid-market corporate positioning in the U.K. So our credit loss ratio is higher through the cycle target there is very -- here is 35% to 55% to give you an indication of the nature of client that we target in the corporate mid-market, and we're comfortable with that. As indicated, we will be investing much deeper into the corporate banking part of that business. In the U.K., our credit loss experience in the private client space is next to nothing really because, again, that is the type of client that we service there.

So comfortable with asset quality, comfortable with the nature of clients we serve, but also committed to investing further, and we will see some increase in the credit loss ratio, but I do not expect that to be substantially worse than where we are today given the trust of client. But I appreciate the positive comment from -- was it [indiscernible]?

Thanks, Fani. The next question is from Harry [indiscernible] of Bank of America. What are your expectations for loan growth in FY '27 in both SA and the U.K.?

Look, we showed you a loan growth of upwards of 5%. I think in neutral currency, around 6-or-so percent. As Nishlan indicated, in the U.K. in the short term, the environment is constrained, but our people are quite excited about the challenge to continue to see significant loan growth. Ruth and the team were talking last evening about the ambition that they have for loan growth. So we continue to see that level of loan growth, but the environment in the short term, as I said, is quite constrained.

In South Africa, we have seen higher loan growth rates. As Nishlan indicated, the environment improved, but we are now at a point where commentary is that interest rates may rise given the geopolitical situation, in particular, the impact of oil prices on economies. So even in that environment, we will still see good loan growth, but I don't want to commit to numbers when there is, in the short term, such a significant level of uncertainty. Our people are positive people, and we have taken that approach into financial year 2027.

The next question is from Sharad Patel of Citi. What specifically drove an increase in stage 2 and 3 ratios in the U.K. corporate lending book? And what trends are you seeing in the U.K.

Thank you. I was just about to call Nishlan. Now I'm going to call Ruth to come to the floor. Ruth, do want come through. We have people in South Africa and across.So I rather you took the stage.

Thank you. Good morning, everyone. I'd like to answer a different question, but happy to answer about exposures into stage 2 and stage 3 really no trend deterioration in terms of what we're seeing, usual movements that you would see across a large diversified book that we have. In fact, movements into stage 3 have actually slowed relative to previous periods. So overall, a solid and resilient asset quality performance and the credit loss ratio reducing slightly over the period.

Thank you, Ruth. Was there another question because I thought that was the only question.

We have a question from Chris Steward of [indiscernible]. Please could finally unpack his comments regarding potential inorganic initiatives to grow non-margin revenues in Private Client businesses. which geographies, size, bolt-on or transformational, noting the market's aversion to the payment of goodwill and share issuances.

Chris, I hope you are pleased to see that slide that Nishlan put up reconciling growth in adjusted EPS -- operating profit and adjusted EPS. So at least let's start there. With respect to inorganic activity, I think this team has been very disciplined around capital allocation. If you look at the first 5 years of our tea as a team, we were able to lift returns both in terms of ROE and RoTE by about 200 basis points, and it was largely a capital allocation, disciplined exercise. And we committed that we will always look at returns above our cost of equity. I mean, obviously, you have a different cost of equity in each of the large markets that we operate in, in South Africa and in the U.K.

That discipline will continue to the extent we have an opportunity to make an acquisition. But again, our pecking order in terms of use of capital, obviously, is reinvest firstly, have capital that is above what set minima so that you are conservatively positioned with respect to absorbing risk in an uncertain and volatile market. That's one.

Two, make sure that we have capital to reinvest in the business, and I think we have proven and demonstrated the investment that we are making. And then to the extent that there are accretive opportunities, and we talked about an acquisition in wealth in Switzerland that Nishlan talked about, where we showed you an increase in funds under management, a delta of GBP 333 million. So we have been quite disciplined in what we do. So bolt-ons will be interesting to always look at because you're able to to add to capacity quite quickly. And where we do look at possibilities of inorganic activity, we will be very disciplined. We are not a reckless bunch by any stretch of the imagination. I have said last year that we desire contribution from capital-light businesses, particularly wealth businesses, to be at least a third of our earnings. So we will pursue that over time, but within the constraints of capital allocation discipline. So we are aligned with shareholders in terms of their concern on this one. So Chris, I have no sleepless nights thinking about that issue.

Thanks, Fani. We have two more questions online. The first is a follow-up from Chris Steward of [indiscernible] noting the ROE target of 13.8% to 14.6% in FY '28. Does this -- and the target of 16% for FY '30. Does this imply a 14.6% to 16% range for FY '29, with FY '29 being the end of most analysts' 3-year forecast time horizon.

Chris, I will say you're pushing it, right? We've given the market a view around our medium-term ambition in terms of ROE of 16% by 2030. And ROTE of 18% by 2030. We acknowledge that, that horizon is a bit long. So what we have done is we've given you a '28 sign post. I think it would be irresponsible of me to give '27, '28, '29, '30, '31, '32. So Chris, you've pushed it, but I'm afraid, I'm not falling into that trap. Thank you, though.

Thanks, Fani. The last question is from Jared from Allweather. Please explain why there was no change in the discretionary motor finance provision in light of what has happened elsewhere in the sector.

Yes. Thank you for that question. Firstly, I think we were at pains over the last 12 months or so to indicate that our exposure to this sector was very small. We came into it very late, and our practices have been particularly conservative. We took a number of assumptions when we made the initial provision. Those assumptions ranged from who is in the net, what level of take-up of a redress scheme would be likely so on and so forth. And we also had assumptions around the rate of interest that may have to be paid on the redress amount. So a combination of those those conservative assumptions made it such that when the final redress scheme was announced and we ran the scenarios again and the computations we were comfortable that we remain adequately provided, I suppose I can go back to [indiscernible] question. Sometimes we can be a bit risk-averse conservative, but I guess that's a good thing. So comfortable with with the provision, not a big issue in our lives, and we continue to invest in the business, and we continue to serve our clients. Thanks, [indiscernible].

Thanks Fani. One more comment rather from Chris Steward of [indiscernible]. He just mentioned that...

Sound like Steve Jobs, one more thing.

He thinks the absolute and relative share price performance over the past 5 years has been reflective of the capital discipline that has been exhibited. And as investors, we should not forget that.

We should not...

So he says, please don't let us forget that.

Forget it. Okay. Thanks, Donald. Chris, thank you for that comment. I mean, clearly, we have a task ahead and ambition that we have laid out, execution discipline is really important as we go forward. I'm grateful that our Board supported us in taking pretty tough decisions around capital allocation. You may remember that we resized the infrastructure here in the U.K. bank that we exited certain of the geographies where we did not have a scale and critical mass. So it's been a painful period and necessary set of decisions that we took and the discipline to look to generate returns above the cost of capital. remains the guiding principle. But beyond capital allocation, our ability to serve clients distinctively will determine our long-term success.

So appreciative of the comment, and I want to thank everyone for participating in the results presentation. We will take probably, what, 10 minutes. Is 10 okay. 10 minutes. So we will be back at 10 after the hour to get into really something that I'm very excited to share with you, our private clients proposition as we go forward.

Thank you so much, ladies and gentlemen. Thank you.

[Break]

Good morning, again, ladies and gentlemen. We're ready to start. I'm going to be joined by youngsters in presenting this section of our morning. So I hope I'm not too long in making our introductory comments.

And I'm going to start where Chris Steward ended in the last section of the results. Chris talked about the capital discipline of the period 2019 to 2024, where we saw a 200 points increase in returns. So thank you for that last comment, Chris, because it makes this slide very easy to talk to.

But today is not about looking back. We are looking forward. And when we talk about private clients at Investec, this is something really close to our hearts. This is where we cut our teeth 50 years ago from the dusty streets of Johannesburg, small coming into a crowded market where you had banks with critical mass, big balance sheets, so on and so forth. And at that time, what made the difference was that we could understand the needs of clients very, very, very finely; we would be flexible in addressing those needs; and we would accompany that with unmatched levels of service. So that's the origin of Investec. And over time, this dedication to clients unmatched service levels led to a brand that was associated with levels of service that are competitor. Our brand in most markets we serve is known to be a brand that signifies passion, signifies optimism, signifies service, signifies partnership signifies long-term relationships. If you look at our senior management teams, generally your average tenure goes towards 2 decades. But that is just an artifact of this approach of looking long-term relationships, particularly around clients, and this comes specifically from the traditions that we build around our private line business.

So when we go down this journey of increasing our client ecosystems and doing more, it is really about enhancing what we do as opposed to a reaction of a negative kind. We already have significant client pools that a lot of our competitors would like to access the returns that we are getting are competitive. In South Africa, as indicated there, we are at the top end of that market. In fact, this graph indicates overall business as opposed to South African returns. If you look at South African returns, our advantage there widens quite significantly. In the U.K., as indicated there, we are relying with our U.K. pay. So what we're going to present to you today represents a leveraging of an already competitive foundation. It also will give you a sense of why we think the contribution will be significant as we go forward. And I'm not going to repeat some of the themes we covered earlier in the day.

So to give you just a brief update on our corporate bid market, which is the one element that we covered a year ago. Again, as I said in the results, we're seeing client acquisition momentum in SA. We are almost at the end of capability building to get us to a point where that offering will be as pristine and is valued as our private banking offering and private client offering that we offer to our clients. As indicated, we are hiring within the U.K. corporate mid-market, and we are looking to launch a fully functional service competitive in H2 2027. This is very synergistic and complementary to the work we do across the corporate mid-market. A number of these clients, we will be doing a lot of TRS services towards, helping them hedge in a volatile market. I think Nishlan indicated that in this volatile market, we did particularly well with client flow in our results. So just complementing what we're doing there with transactional day-to-day banking will be important for us.

We talked about our tech investment. Nishlan gave us a bit of a feel about what we're doing there. So the portion of that overall program that deals with our finance organization and our P&O organization will be delivered fully by March '27. There are other elements of that, that we will continue to deliver. So when you go into these big tech investments, in some cases, you take a lot of risk. That's why I'm particularly pleased that we're beginning to deliver units of the tech platform investment. And I'm not going to talk about capital optimization and capital allocation. We covered that in depth.

So as I said in my opening remarks, we regard private client as a heritage franchise for us. This is where we have developed to be who we are. So we have a strong foundation already. This contributes 1/3 of our operating profit. So it's not something that is new. We have a great foundation, and we're looking to increase scale. First and foremost, we're looking to grow our client basis, and we will tell you why the growth numbers we are targeting are ambitious, but credible and executable. That's what we will do as we go forward. And there is a high degree of annuity in what we do in this business, not only with respect to wealth and investment as [indiscernible] will present, but generally, in the nation of the business that we do. So very excited about what this particular client franchise represents to us. So as you go forward, scale, growth and capital light. Those are the 3 vectors that we are pursuing.

And when you talk about private clients, I think it is really important to understand that we are not product pushers. We have relationship-based, and we lead with our clients so that we can do what's appropriate for the client. That's why we don't worry much about consumer duty when we deal with this particular sector of the market because we are advised [indiscernible] we have colleagues that are experienced that deeply about clients. And we are long term in our approach, so we will not be transactional and just sell product, the Delta throw [indiscernible] anyway our clients are very choosy. They wouldn't accept it anyway even if we try. Being [indiscernible] that is really important, being high touch, human first, but equally being supported by competitive digital platforms that really is [indiscernible]. And the third level of how we do this is that we operate a seamless exposure in banking and wealth. And that really is important. And we do so on an international basis. So that's why if you look at our South African competitors, it is really hard for them to serve a high net with clients the way we do, just given the seamless integration of Bank & Wealth, our international presence, we talked about Switzerland [indiscernible] now Dubai, the U.K. of course. So very competitive in how we serve our clients.

So I'm going to try to sketch for you the opportunity as we see it on one slide so that you get a sense of what it is we're trying to do. As I said, we have a proven franchise. We're looking to grow in specific segments and we have the experience to do it. So firstly, if you look at our South African business, we have about 128,000 clients in an addressable market of 1 million. I mean that 1 million as it happens, is really tiny because it represents a small sliver of 42 million employed individuals in South Africa. So 1 million, and within that 1 million, we only have about 128,000 clients. So our ambition would be to double that client base to about 250,000 clients. So that's the ambition of an addressable market of 1 million.

So while we will continue to lead the market in ultra-high net worth, and high net worth private client offering, we will also now go much harder at the affluent sector. So continuing to leverage our strength in the ultra-high net worth and high net worth, but now putting a lot more refined proposition and service model at the affluent segment of the market. And we will be going at it and we've been going at it through enhanced digital platforms. And we're also doing more about invest and insure. In other words, savings products and investment products that are tailored to the affluent segment. When we use our data analytics, we find that there is a substantial amount of flow out of our clients' account, both from an investment perspective and insurance perspective into other providers. So just mining, what we already know is innate and then continuing to acquire more and more clients. What do we expect out of this? We generate at the moment ZAR 3.5 billion rent of profit in this segment. We are aiming to get to ZAR 6.5 billion by the end of March 2030. So that's the delta that we are pursuing through this particular strategy.

Looking at the U.K. market, we are looking at an addressable market of 95,000 clients, and Ryan will talk about how we choose these clients. We have 8,200 of these clients, and we will be looking to add about 5,000 to these clients. In the longer term we gave you a number of getting to about 18,000. I think in the shorter term, we would like to do more with a smaller number of clients to reach our goals. There we want to move from GBP 32 million of operating profit to GBP 57 million of operating profit. That's what we see as the opportunity.

On the Wealth and Investment side, we have the 27,000 clients. The new push is around internationalization of our offering as we go forward. So scaling, and we're also looking at inorganic opportunities. [indiscernible] has a number of bolt-on opportunities he has seen over time. We've taken advantage of some of those. So internationalization, bolt-on acquisitions and of course, in some select situations, we will look for more than that. So that's the opportunity that we see. The challenge will then be how we execute on this.

So what is the thesis behind what we're doing. Obviously, we're widening and deepening our client ecosystem so that we can do more with existing clients and we can entrench them much more effectively and competitively. As we scale up what we do with our clients, we are seeing operational efficiencies and Nishlan talked about how we are adopting newer technologies, particularly AI, while widely spread in terms of use, the industrialization of AI adoption will happen as we go forward. And when we are ready, we will tell you about it. The way we see it, by the way, is that we will continue to be human first, supported by digital and AI technology that we will probably see not a retention of people, but probably a slowing in hiring as we adopt more and more of AI. So operational efficiencies and enhanced banking capability, transactional banking as we go forward, both with respect to the U.K. corporate mid-market, the SA corporate mid-market and the enhanced transactional capability in the U.K. means we now can do day-to-day work with our clients, better data around our clients, and we can gather deposits. So in the long term, we intend to address our cost of funding through the investments that we are making and talking to you about today.

So if you look at our business, what makes us different and distinctive. I'll give you just 6 pointers. The slide is busy, so I'm not going to go through all of it. We have deep specializations. At Investec, you ought to be good at what you do to get around the table. So when [indiscernible] talks to you about our wealth offering, we have specialists that do what they do. But these specialists work in an integrated manner with other colleagues around client needs. As I said, we are advice-led and not product-led. So deep specialization, a level of integration, we have strong human relationships as I have indicated, and those strong human relationships, deep levels of trust are complemented by digital platforms. And I've said we are international in our outlook and in our offering. We have a service ethic that is in our heritage, and we obsess about our culture and our service ethic. So these are the things that make Investec distinctive. As an example, we have a global client support center, the so-called CSC. That services our clients around the globe. Our standard is that if a client calls in, the phone should not ring for more than 3 rings. That just gives you a sense of how we obsess about service to clients.

Equally, when when our colleague talks to a client, we now have the capability that some of the more menial tasks can be done by agents while a colleague tries to resolve an issue that our clients may have. So that's what makes us very, very, very, very different to anyone else, and our colleagues will go into this as we go forward. So whether you talk about private bankers, you talk about our financial advisers and you talk about wealth managers, these distinctive characteristics are what determine the day-to-day experience of our clients.

I've given you a sense of the profitability expectations of what we're doing today and how that will contribute to our targets as we go forward. So this slide just gives you a sense of where we are today. The activities that we have talked to you last year about in terms of the corporate mid-market, in terms of the optimal use of capital, in terms of leveraging our existing client franchises and looking for opportunities to deploy excess capital, including return of that capital so today, we will focus a lot more on private clients. And with that, we have the confidence that we can reach our 2030 targets.

Having spoken for such a long time today, I'm sure you're tired of hearing my voice. It is now my pleasure to introduce the youngsters, starting off with Itu Merafe, who heads our Private Banking business in South Africa. Itu, over to you.

Thank you, Fani. Good morning, everybody. As Fani mentioned, my name is [indiscernible], and I have the distinct privilege of taking you through a part of our business that is not only well established and well known, but one with significant opportunity for growth. The private bank in South Africa has been a consistent driver of value to the group. And this consistency has been recognized with us winning for 13 years in a row, the Financial Times of London's best private bank and wealth manager in South Africa. This award we've won alongside our colleagues in wealth and investments. Now for us to do this has been through significant and focused dedication to strategic execution. This execution has led us to having the #1 market share of high-value home loans in the South African market. And importantly, we currently bank over 1 in 3 of every high net worth individuals within our market. The results are very clear, over ZAR 3 billion in operating profit, but in the period under review, we've seen an over 60% growth in our core client base.

Now historically, the private bank has had 2 core franchises: Our banking business as well as our structured property finance business. The latter continues to be an incredibly important and integral part of our private client offering, where we partner with high net worth property investors, developers and entrepreneurs as well as unlisted property funds and offer bespoke funding solution. Now this part of the business did face some significant headwinds coming out of the COVID-19 pandemic. But I can proudly stand here today and say even through that period, we've been able to grow this business and maintain our operating profit.

But the focus of today's discussion is our banking business, a business that through very specific acquisition strategies and intentional entrenchment targets, we've been able to double operating profit in the peak period under review. We've continued to invest in this business and what I will talk to you in a little bit is our invest and ensure offering, which is deepening our client value proposition and allowing us to win greater market share. As Fani spoke earlier, in its broadest definition, the addressable banking market in South Africa is just over 40 million individuals, but Investec continues to serve a highly targeted high-value segment of this market. That comprises of 1 million individuals earning ZAR 800,000 or more. We further segment this further within our ecosystem to ensure that we've got appropriate focus and specified value proposition for each part of this. And so if you look at the high net worth market, where almost over 40% of all high net worth clients, those earning over ZAR 5 million in South Africa, bank with Investec. These clients are served by experienced specialist high net worth bankers who work in very close collaboration with our wealth managers, and these clients have access to the structuring capabilities in our tech and fiduciary team. They also have access to our international platform, the star of which is our Swiss banking platform. We continue to be the only South African bank with a fully fledged banking license in Switzerland.

For our high-income clients, these clients are served by dedicated experienced private bankers who partner with our financial advisers to ensure that we are advice-led in a deeply personalized manner. Relationships are key because banking is an emotive thing. These 2 parts of our business are absolutely critical in driving value, and we continue to invest in our CVP to enhance our market-leading position.

The third part of this addressable market for us is where we see significant opportunity for growth. With a 7% market share, our view is that we are underrepresented in the affluent part of the South African market. This is the market with individuals who are earning ZAR 800,000 to ZAR 1.5 million. What is important to note is that this is not a market that is new to us. What we have is a strong position in core professions that give us a stable footing to build from. So historically, we've been incredibly targeted in the affluent market. And what we're doing is taking the lessons learned from that strategy and broadening it into the affluent market. What is important to take from this slide is that when we have strategic focus, combined with our capabilities and focus on a particular market, our right to win is clear. We've been able to execute. And so as we put these targets forward, they are credible because they're based in what we have achieved before.

Now being the client-centric organization that we are, before I get into our route to market and what our value proposition enhancements have been, we believe it is critically important to first define who is this affluent client that we're looking to bring on. These affluent clients are established professionals, entrepreneurs, senior managers with rising income and wealth needs. They are often underserved in a fragmented manner and their needs are typically more sophisticated than traditional retail banking, but they haven't always had the full access to private banking. What they require as a financial partner, not a product pusher and that talks to the ethos of who we are as Investec Private Bank. Our intention is to partner with these affluent clients through their financial journey and ensure that we can convert financial uncertainty and anxiety into confidence, peace of mind and trust. The timing of -- and our ability to do this is opportune at the moment.

Over the last while, we have invested specifically in our digital platforms. What has always been important to us is to ensure that as we build scale, we do so in an appropriate manner without for once dropping the service excellence that Investec is known for. Our digital track record is proven and has been externally recognized. And we now recognize that our digital platforms are the primary contact point between ourselves and our clients with 87% of our core clients being digitally active. What is critical as we continue to invest here is ensuring that we have AI-enabled intuitive acquisition journeys that can allow us to turbo-boost our acquisition targets. The reason I emphasize that acquisition is something that what is incredibly clear to u as, as soon as a client banks with us at Investec Private Bank and experiences our high service value and has access to the expertise of our bankers and financial advisers, they seldom leave. They partner with us for the long term. And so our ability to build scale and our ability to grow is predicated on us increasing our acquisition capability.

Now investing in digital platforms alone will not make clients come and bank with us. It will not make them come to us or what will. And this is the part that's really important. Because you may ask yourself what is different as you go and try and capture a much broader market opportunity, what are you different doing differently. Important to note that into the affluent market historically, how we got clients into the Investec ecosystem was through our banking offering. That was the only line in the water that we had. And over the last while, we have intentionally invested and now invest and ensure. And so if I take you through that a little bit. From an invest perspective, our My Investment platform in partnership with our Wealth and Investments team is our way of bringing the absolute best of our capabilities and products from a wealth and investment perspective into the affluent market. giving clients access to investment products that they ordinarily wouldn't have access to.

Secondly, it allows us to scale our retirement offering, which ensures long-term prosperity for our affluent clients. And as a true partner, this matters significantly to us. Secondly, we have invested in our Investec Life proposition, which allows us to roll out our proven insurance proposition not only into our existing market where we've got significant market share we can entrench those clients deeper, but it allow us to acquire clients through different avenues. And so historically, we only had banking to bring clients into the investing ecosystem. What we have now is bank, invest and ensure. It allows us to be advised-led in picking the right product and the right avenue for clients to join the Investec ecosystem. And as these clients are in our ecosystem, we will be data-led in how we entrench them.

The flywheel is truly turning as you can see from the significant CAGRs in this business over the last while. And so what will this mean? What did the results of executing on the strategy imply? Our 2030 targets are ambitious, they're clear, they're measurable, but we believe executable. And so the goal is to add over ZAR 3 billion in operating profit, to grow our loan books by just shy of ZAR 100 billion and to have our client numbers exceed 250,000 clients, our assets under management on our My Investment platform will grow from ZAR 5 billion to ZAR 29 billion, and our total insurance policies will be -- that are currently just under 27,000 will grow to over 50,000. We will achieve this by executing on our strategic priorities, that of simplifying our operating model in banking, our digital transformation for scale will continue. Will execute on our new wave strategy and our structured property finance, where we will be partnering with the new wave of property entrepreneurs as well as working very closely with our business and commercial banking team to bring our property expertise into that mid-market. And lastly, we will continue to turbocharge our investments and our invest and to ensure that we can meet our clients' needs appropriately.

As I conclude, our strong execution discipline is bearing fruit. This is not something we're looking to do in the future. We are in execution mode. We are deepening our proposition from our high net worth and high income clients to ensure that we have a differentiated and market-leading proposition. We are scaling profitably in a part of the market where we are currently underrepresented, and our new and simplified operating model will unlock scale. We will have targeted investment to ensure digital enablement, client acquisition and our invest and ensure business growth. and all of this will lead to accelerated growth. We have clear line of sight for delivery and are confident in our capability to deliver our 2030 targets. Thank you very much, and I'll call on [indiscernible].

Good morning. My name is [indiscernible], and I will present the Wealth and Investment business to you. And I'm standing here on behalf of 600-odd colleagues in this business. And I'm sure many of them would have liked to stand up here presenting because we are both proud of the business we have built and we are very excited about what the future holds for us.

You would hear a number of themes that is consistently repeated by first Fani, Itu, myself and Ryan after this because this is a very integrated business. If you look at this first slide, the numbers tells us a story. It tells the story of the business that has been built over many years. This is a capitalized business contributing stable annuity and consistently growing income stream to the group. All of the metrics on there has been doubled over the last 6 years. But more importantly, this growing asset base, as Fani has also mentioned, tells us a more important story, a story of trust that our clients have put in us. They have appointed us as the stewards of their investments. Key in building these relationships is the long-term nature of it. Individual relationships are fostered and built and literally last decades. These relationships are around client-centric together with private bank and it is a business that is focused on the high net worth and the ultra-high net worth clients. Over the last 6 years, we have also expanded our footprint out of South Africa into Switzerland, into London, Mauritius and Latin America.

We have a clear North Star. We are building an international Private Client Wealth and Investment business. And to offer our clients were the best, we have structured ourselves into 3 core specializations: Holistic wealth management, a global asset manager and an investment platform on which all of this is delivered to our clients. Holistic wealth management brings to our clients all forms of advice. It includes financial planning, investment advice, for example, through asset allocation, structuring, tax fiduciary, philanthropy and intergenerational planning.

But because of the deep relationships that we have with our clients, we offer this in a truly human way. We go beyond the traditional risk profiles and financial benchmarks to gain a deeper understanding of our clients' needs, of the goals and their values so to create a wealth management solution that provides them with a sense of safety, a life of prosperity and a meaningful legacy. I will go into more detail about our asset management capability on the next slide.

We have recently -- and I think Nishlan or Fani has mentioned it, we have recently in South Africa launched an investment platform. This enables our clients through the opening of one account to have access to invest globally. This investment platform is built on modern technology and incorporate AI. This is a first and only in South Africa, and brings us in line with our global peers. Our asset management capability has been established more than 20 years ago. And it is on the same principle of longevity and trust that we have built with our clients. We have a clear investment philosophy. It is about long term. It is about active management of assets and it is about concentrated portfolios. And we have embedded in all our processes in all our mandates, the principles of responsible investing.

Our scale allows us to cover the breadth of the different asset classes. And today, we manage about 2/3 of our clients' assets in international portfolios. For example, our UCIT fund range that is domiciled in Luxembourg currently exceeds $8.7 billion. We offer this to our clients through a segmented approach as it to have mentioned already, and we align very closely to them. For example, together with private bankers, we service the high net worth and the ultra-high net worth through a high-touch basis -- on a high-touch basis through dedicated wealth managers. The affluent or high income clients, our service through omnichannel approach via the My investments platform as has been shown on the previous slides. And then internationally, we also distributed by a network of [indiscernible] for example, through the joint venture that we have in Latin America. But all of the above is about people. It is about attracting and retaining the best to provide excellence and the consistency that our clients expect.

One of our great successes over the last few years is the true partnership that we have built with Private bank, ensuring that we bring the best of Investec to all our clients and that we truly entrench them in our one ecosystem. And you can see the progress that we've made there, moving the overlap from 48% to 56% over these years. But on the right-hand side is our commitment to continue doing this. It is leadership led. We built relationships at the right levels. We use various operating mechanisms. For example, the [indiscernible] use of data, marketing, client events. And we also -- where our CVPs overlap have integrated teams, for example, our tax and fiduciary team.

Looking forward, 3 focus areas. Number one is we continue to build this core business. Everything I've spoken to you today is inside our core business. All our people are focused on building our core business. Secondly, we have to be cost leaders and it's about leveraging people technology, bring in AI, it is all about disciplined decision-making and execution. And thirdly, we are actively pursuing some new growth opportunities. These will be in the forms of acquisitions. And Fani and Nishlan as mentioned to the one we have done completed in Switzerland that is now in the implementation integration phase and we are looking at new jurisdictions and revenue streams. We are confident that our core business can deliver 12% to 13% growth through the market cycles. And in addition, through very targeted initiatives, we want to add another 3% to 4% of growth. We have grown our business by 13% over the last 5 years. We are confident that we can do it by 16% to 70% over the next 4 years. Some takeaways in a sense Fani, you have mentioned all of them. This is a business that has been built that delivers strong, high-quality and [indiscernible] earnings. We are consistent at all. Our business is all about trust, and it's all about long-term relationships with our clients, and we believe we have the people, the right people to service them.

We operate in a totally one invested ecosystem so that we can bring the breadth of Investec to our clients. And we are expanding our international footprint, both to give our current clients a better service, but also to provide new growth opportunities. So through this disciplined growth, we are confident that we can achieve the outcomes towards 2030. And I call on Ryan to speak to you about the U.K. private line.

Good morning, everyone. My name is Ryan Foley. It is my pleasure to present to you today the U.K. private client business and its evolution to date. There is an exciting new strategy that we're embarking upon here. And it's wonderful to be able to share that now in a confident fashion as we move forward over the next few years.

So I think the best place to start is to set the scene. Much as like my colleagues have done, our track record in this space is very, very strong. The last few years have been characterized by robust growth in our U.K. high net worth client numbers, and this has been coupled to double-digit compound growth in the lending book that's attached to these high-quality clients. All of this has resulted in a business that today delivers both a strong operating profit and a positive ROE.

And importantly, the clients on book that we've accumulated to date deliver us an unbelievable leverage opportunity across the group. Just in the last financial year 2026, we have taken a 1,000-plus referrals from our client base to the rest of the bank and the rest of the group, cross-group, into group, interbank and everywhere else that has resulted in many, many, many opportunities in our corporate and investment banking space and of course, in our wealth offerings to those clients. And I think what this does is it reinforces again the strength of a client base of this type, the value of this client base as a franchise and go forward. And our ambition now is to take this client franchise even further and to do that even faster. And that will be done by increasing our relevance to those clients and deepening our relationships with them.

If we look next to the market opportunity and sizing, we have what I think is a relatively small market share of what is actually a relatively large market niche. We have a proven capability to acquire and then retain these clients, and this has been further much further strengthened actually in our go-forward strategy through the delivery of an enhanced proposition that is integrated and is holistic in its outcome. And importantly, we continue to focus on clients that deliver both that value, both what we offer, but more importantly, how we offer it, and we bring sectoral and other expertise to those client bases as we move forward.

Our current client base comfortably also exceeds our minimum criteria. And that, I think, reflects both the quality of the book and the inherent latent opportunity in this space. for us to deliver further value and relevance to them as we move forward over the next few years. So this brings us to probably the changes powering the bulk of the strategy. And I think to understand this, you have to look at our evolution from pre-2016 to where we are today, which reflects probably the biggest shift at that time in the model of a product-led approach to something more specialist lending coupled to basic banking capabilities. That's what's got us here today. The next steps from 2026 to 2030 involve a substantial shift again, but arguably will be even more impactful. And this is really the private client business driving 3 critical vectors.

The first is we are expanding substantially our scope and quality of the proposition, and the integration of all of the various pieces that now will result. The second is shifting our people from being focused principally on lending to placing them at the center of this new expanded proposition and delivering more of investing more of the time, but importantly, at the right time. And finally, ensuring that all our dealings with clients are centered around holistic advice that will anchor those relationships on the go forward. And as these 3 shifts that we believe will allow us to position Investec for the first time here in the U.K. as a primary [indiscernible] that should allow us to grow our market share significantly to circa 14% over the 4 years ahead. And importantly, we maintain both the quality and also the relevance of the space in line with our group ambitions to deliver a truly integrated, seamless private client ecosystem.

On to the transactional banking piece, which I assume is going to be the subject of a lot of discussion today. We have a new, improved and comprehensive transactional banking proposition that is going to underpin this move from secondary to primary banking. The offering will include a private client current account that is significantly enhanced. This will be coupled to a fully functional and multicurrency debit card. A new credit card will be launched by us, which is a first for Investec here in the U.K. and all of this will be surrounded by a market competitive and relevant rewards and benefits platform that are linked to the breadth and depth of clients in their relationship with us in Investec's private client ecosystem. And importantly, all of this is being delivered in a digital-first manner, incorporating still, though, our world-class bankers and the CSE in line with our mantra of truly high tech and high touch, which remains, as we've seen from our colleagues, our ongoing USP. So this offering will be a key driver of deepening the engagement and interaction with clients, growing our liability base and unlocking new areas of value for us broadening the relationship with these clients for higher loyalty and retention and allowing insights and relevance that was previously unavailable through a primarily lending-led offering.

That said, even though we are excited about transactional banking, we're not standing still on our lending proposition either. Strategic initiatives here include the continued build of a fully digital mortgage and property finance offering that will increase our appeal to the direct-to-client and indirect-to-broker target client bases here in the U.K. It's modernizing our offering and importantly, building operating leverage through scale, allowing us to increase the lending book by circa 50% over these coming 4 years. In addition, we're taking active steps through both funding mechanisms and capital efficiencies to ensure we remain competitive, and we will still build on our core strength of flexible and bespoke lending solutions tailored for individuals much better than the competition.

Finally, our shift from this mortgage banker to relationship manager enables a greater offering at the source of any lending transaction, thereby increasing our relevance and retention and helping us drive that market share. As we approach the 3-year mark of the combination of our W&I in U.K. and Rathbones, it's important to recognize the strong and valuable partnership we've built with them over the years, resulting in great client experiences for those in the arrangement. That said, we are now evolving our relationship of the strategic partnership even further, and we'll be moving from a referral based system to an integrated assets under advice model with Investec now leading the client relationship and all the advice.

Alongside that, Rathbones will now provide underlying investment capabilities together with RW&I and International, and this is in line with the group's strategy to deliver a unified banking and wealth proposition across borders via single Investec platform and enabled by holistic advice. All of this will be underpinned by seamless and professional digital delivery and the private bank in the U.K. will continue to originate and source clients in this model. That will be onshore and our channel [indiscernible] business will continue to source and originate clients offshore thereby providing the power to us. It positions our existing wealth and investment international infrastructure as well as IBSEC, alongside Rathbones as 3 key capability engines powering this strategy and approach.

And overall, this strategic evolution, we believe, gives us a strong foundation to continue working together with Rathbones in partnership while simultaneously also delivering on the group strategy of a one Investec private client relationship. Bringing the strategy to life and connecting the enhanced proposition and its integration is a recognition that client value increases exponentially across 2 axes. The first is relationships broaden across product utilization. And secondly, relationships deepen over extended periods of time. Now given lending often creates the entry point for us, the enhanced proposition allows an immediate shift to relevant multiproduct offerings at source and then the ability to provide an advice-led relationship from the outset, thereby deepening for client relationship and increasing tenure. This value across 2 dimensions and over time, we believe, strategically affords us the ability to manage clients into a long tenured, integrated and holistic relationship, where Investec is the first port of call and the preferred choice of product. It creates strong annuity flows for us. and a disproportionately high share of client interactions, engagement and transactions. All of this drives trust and loyalty exactly what Investec is known for.

Ultimately, when the strategy continues delivering, it drives 3 key metrics: Firstly, enhanced operating profit increasing by circa GBP 25 million out to 2030 and expanded high-quality loan book, increasing by circa ZAR 3.3 billion out to 2030 and a larger client base of circa 13,000 by 2030 that are more deeply entrenched in the private client ecosystem and enable to utilize more of the corporate and investment banking services of the group and the success of this strategy is underpinned by 4 key strategic initiatives that are ongoing. The first is the launch and embedding of our transactional banking platform. The second is the build-out continually of our digitally enabled lending platform. The third is the evolution of a competitive lending offering as part of the enhanced proposition and finally, the drive towards a trusted adviser relationship manager approach as a center point of client engagement in our One Investec ecosystem. We believe this allows us to deliver a compound annual growth rate of 15%, but this platform then delivering growth from 2030 strongly beyond and even into the future there.

In closing, we have a strong record of delivery, coupled to disciplined and time is execution and all resulting in a scaled up product line franchise, generating improving profitability each year. We've demonstrated a right to win in the U.K. space. And with a now enhanced proposition that is tightly integrated and more relevant, the opportunity to take a relatively small market share into a sizable and valuable client franchise is palpable. The exciting piece for both our clients and our people is the significant opportunity to significantly increase our primacy and to build deep tenured relationships. Our targeted investments in the 4 key areas that we've spoken about are assisting us in unlocking operational leverage and driving this ecosystem growth that we're after. And finally, notwithstanding current market headwinds, we have strong momentum in the business today and an unshakable confidence that we will be able to deliver this by 2030 and beyond. Thank you very much, Fani, I call on you.

Thank you, Ryan. Thank you, [indiscernible] and Itu, it really is wonderful that over the last 2 set of results you have seen a number of our colleagues who normally don't share this stage to see the quality of people that we have. In November, you heard from Nick Riley, and you also heard from Andy, Andy sitting at the back there just enjoying seeing where the youngsters present.

I think what you heard through the presentations is a consistent message about how we obsess about our clients. and how we go out of the way to try to partner with them over the long term. That our provision is integrated and from a South African perspective, very international and that we have been investing significantly in our digital platforms to underpin our ability to continue to serve our clients. So the benefit of scaling over the next number of years will be seen, as I said, in operating leverage will be seen in the level of entrenchment that we get from these clients and overall in the profits that we want to drive. I'm goint to just scroll through 2 slides that I'm not going to talk to because they repeat what we have been saying an integrated One Investec offering to our clients. And of course, lifelong commitment to these clients as we go forward. So on that note, I'm going to close this particular presentation. And I'm really glad that the youngsters came through. you normally hear from Cumesh, you normally hear from Ruth. In fact, Ruth says she was a bit disappointed to get a question on staging after all the preparation she did for the last number of days, Ruth, take what you get, all right? So very glad. We're going to open it up to questions. And I know it's been a pretty long morning. I apologize for that [indiscernible] asked me not to offer another deep dive in the next set of results. So [indiscernible], am I going to listen or not?

Should you take questions? Are there questions from this room? Now shall we move to Donald in Johannesburg. I know it's been a long day, so you may choose to talk to us directly. Donald?

Finally, we do not have any questions in the room, but we do have quite a few questions line.

All right, let's go.

So we have a couple of questions from Chris Steward for each of the presenters this morning. So we'll just start with a question for Itu. Are you confident that affluent and high income clients can be serviced profitably under the high-touch service model that has been behind the success of the high net worth offering. And can customer numbers be doubled without diluting service levels to existing clients.

Thank you. Itu?

Thanks for the question, Chris. I think it's important to note a few points. The first is the number of clients that we have today has been a 60% growth from where we were 5 years ago, and our service offering has not diluted. And so what we mentioned around our ability to invest in our digital platforms allows us to continue to have a high service quality for a couple of reasons. The first one is through our platforms, our clients will be able to self-serve and many things that before they couldn't. And to Nishlan's point, around speaking about how we're using AI agents in the organizations. Certain things that clients often would call that sort of predicated that 3 rings we'll be able to do in other ways. And so we are investing in our ability to service our clients so that what our bankers can truly get to other things that require empathy and a level of complexity in dealing with our clients. So we are very confident that we will maintain that.

We have a follow-up question for Itu from Daniel Masvosvere of Ashburton Investments. For the SA Private Bank, how does the profitability of high net worth clients compared to affluent clients. And what does this mix evolution where you will grow more affluent clients imply for the ROE, which is currently at 15.9%.

Do you want to go through all questions for Itu while he is there, if there is any other.

That was the last question for Itu, Fani.

Thank you. Itu, I want you to get to rest at some point.

Thank you very much. I guess in response to that question, the profitability is driven by different things. And so part of what we've done in investing in our platforms is to ensure that our cost to serve in the affluent market is a very different number for that in the high net worth market. So it is important not just to look at what the revenue drivers are for our different segments, but we're intentionally segmented our clients ensure that our cost to service differently so that we can scale profitably. I guess the short way to answer your question, though, is that we expect that through our scale, it will still be accretive in terms of returns and profitability.

Thanks, Itu. Donald, how many more. Let's keep batting.

We have about 6 more questions Fani. The next two are directed at [indiscernible] from Chris Steward of [indiscernible]. Given the offshore platform and Swiss banking license, does Rathbones any longer provide necessary services to wealth and investment international as IWNI used to add to IWNISA.

Yes. Keep going.

And the second question for [indiscernible] will 16% to 17% earnings growth be partly delivered by increased operating leverage? Or will it merely be a function of higher revenue growth and a static margin of circa 30%.

Yes. Anything else for [indiscernible]?

Those were the two questions for [indiscernible].

Thank you. [indiscernible] do you want to come through. I think on Rathbones, Ryan indicated that we're changing the service model in the relationship. So we now have them as a capability provider to us. We take over the primary relationship in a similar way between banking and wealth. And there will be a capability provider alongside Switzerland, alongside W&I International. So that is an evolution, but our partnership continues as we go forward. And then you can take the other one. I decided to take up first. You go.

I do think we just need to understand that the Rathbones and the answer you gave is very specific to the U.K. Our agreement with Rathbones has always been that South Africa and international is outside of this agreement, both for their side and from our side. They can operate internationally where they want to and how they want to as well as we can. So that agreement is not changing. And this piece that you have explained that -- Ryan has explained earlier, specifically as to our relationship and evolving that partnership with them within the U.K. The first question or that's probably a lot easier to answer is around our leverage ratio and how that will change. So in South Africa, our target is to keep our cost-to-income ratio between 67% and 70% or the inverse if you want to do it in -- as a margin. In South Africa, we are already at the bottom end of that, and we expect that to stay there, so closer to the 67%. The reason why it's closer to 70% is because of Switzerland and investments we have made there to be able to acquire, for example, the acquisition we have done and to scale up that business to deliver better into South Africa. So their cost-to-income ratio is higher than 70%. We expect that to come down all the way, and we will hope to trade at the lower end of our 67% to 70% over time.

Good news, [indiscernible].

We have three questions for Ryan. The first question is from Chris Steward of [indiscernible]. How important to your private client offering is the success of the complementary wealth offering? Can this level of integration really be achieved by strategic partnership were lack control or only have a minority stake?

Thanks, [indiscernible]. I think Fani has really partially answered the question, and I would add to that by saying that we focus on 3 things in our strategy, which research tells us high net worth clients want. The first thing they want is an integrated bank and wealth offering with advice at the center. The second thing they want is a digital journey that allows a high level of self-service coupled to moments of magic where the individual and the relationship really makes a difference. And the third thing that clients want is access to unique opportunities. So when someone asks, is it critical to our journey, it is absolutely essential. Our whole shift is moving the relationship from a product-led relationship to advice at the center. And to do so, we've needed to add wealth in a much different fashion, much closer fashion in an invested integrated ecosystem be able to deliver that. As Fani mentioned, it's similar to what we already do in South Africa through one place where a client can work with wealth and bank interchangeably across a digital platform. And those 2 people are united in a joint up proposition. We are striving for the same thing here in the U.K. and have a high belief that we can achieve that in the structure that we've come up with, while still respecting the Rathbones partnership and using them as a key capability engine. So that's the first question.

There was another, I think, Don.

Yes, the next question is from Jared Oak from Allweather. How does the U.K. private client strategy provide an integrated wealth offering and control the client journey with Rathbone sitting outside of the group in a separate listed entity?

Okay. I think I've partially answered that in the previous question now. And I think the example is there to see. So Jared is welcome to contact us afterwards if he wants more detail on that.

And the last question for you is from Daniel Masvosvere of Ashburton Investments. On U.K. Private Bank, is your sense that this remains an underserved segment of the market which you have identified for a high-touch service with larger banks in the U.K. focused on high net worth clients above the GBP 3 million NAV and service levels naturally not as high touch in the brackets you are targeting.

Daniel also notes that the U.K. is a low-growth environment and asks, is there anything preventing larger peers from increasingly focusing on your target segment as they look for growth.

Okay. To best understand why we would win here. It's important to understand Investec. And Investec is one of the only institutions in the U.K. that can bring together both bank and wealth corporate and investment banking services in an integrated fashion. So many of the clients that you seamlessly move them around the entire proposition in an integrated way. So -- we do believe it is actually an underserved segment. There are obviously 95,000 clients to go for, which we currently have 8,200. And we'll be targeting very selectively those clients who need vein this form and in the way that we deliver that service. So we absolutely believe we have a right to win, and we've demonstrated that capability. I think quite ably over the last couple of years.

There was a second part to the question, Don, that can't remember now what was asked. Do you mind just repeating it, please?

So he says that the U.K. a low-growth environment. Is there anything preventing larger peers from increasingly focusing on your targeted segment as they look for growth?

So unfortunately, the Gini coefficient tells us that wealth is growing while the rest of society isn't. And it's one of the reasons why we are so focused on creating enduring worth. And we believe that by focusing on this ever-growing U.K. segment in spite of the fact that the U.K. GDP is not growing and many of our sectors are in some sort of flux. We do believe that we can grow positively and continue to move into that client base and obviously create some impact to society off the back of that. As these entrepreneurs in many cases, all key captives of the industry, are seeking to change their world and the societies they work in as well. So we're quite confident that we can do that and do it regularly and in an Investec fashion, which will make us different.

Thank you, [indiscernible]. We have one more question that's come in for Itu from one of...

You have been muted, Don. Thank you, Don. Well done. I think just in closing -- look at that smile. Just in closing, we've presented to you some plans about what we are doing in the private client space. We also have given our plans last year about what we're doing on the corporate mid-market and generally how we want to leverage and scale even further the propositions and capabilities that we have. I know that you have seen the quality of the people that have spoken to you this time around and the last time around. The objectives are ambitious for our business, the market has a level of uncertainty to it. So as we go forward, we have 3 clear responsibilities. The first is execution. So is the second and so is the third. So for my colleagues, we have to have the discipline to execute on the plans that we have laid before the market. And at the center of that, as always, for Investec is our clients. And for the leaders in the business at the center of that commitment is our people. And obviously, as we go forward, we have excitement about what we need to do, but we have to have the discipline on both accounts.

So on that basis, I would like to thank you for attending. I know it's been a long morning. We thank you for your interest to our shareholders, our investors and our analysts. We thank you for your interest, we know that when we go around, you will probe a lot deeper into these plans, and we welcome that probing. And we welcome from time to time, the advice that you offer us as we interact with you. We'll see you again in about 5, 6 months, and I'm sure you will have a number of other young colleagues talk to you. I'm really excited about these youngsters being presented to the market. Thank you so much. And to my colleagues. Thank you for your contribution to these results. Thank you for the way you serve our clients and you look after your colleagues. Thank you. That's the end of the presentation today.

Good day, ladies and gentlemen, and welcome to the Investec pre-close conference call. [Operator Instructions] Please also note that this call is being recorded.

I would now like to turn the conference over to Investec Group Chief Executive, Mr. Fani Titi. Please go ahead, sir.

Thank you, Donald, and good morning, all. Thank you for joining us for our pre-close trading update.

This update reflects the financial performance for the 11 months ended 28th February 2026, and the expected results for the year ending 31st March 2026. I'm joined this morning by Nishlan Samujh, our Group Finance Director; Ruth Leas, the CEO of our U.K. business; and Cumeshan Moodliar, the CEO of our South African business.

The group is expected to deliver a resilient performance, reflecting the strength of our client franchises and diversified revenue streams. We are making progress on the strategic growth agenda outlined in May 2025. The investment in our corporate mid-market private client segments and the ongoing modernization of our operating and digital platforms is on track. As part of our capital management, we have now completed the ZAR 2.5 billion or GBP 110 million share buyback program announced in May last year.

Turning to the performance for the 11 months ended 28 February 2026. Revenue was supported by increased client activity levels, higher average advances as well as net inflows in our wealth business. This was counterbalanced by the negative impact of lower average interest rates. Fixed operating cost growth reflected continued investment in people and technology, particularly in building and modernizing transactional banking capabilities as well as driving strategic and regulatory projects to enhance business resilience and support growth.

Looking at the underlying drivers for our core client franchises. Net core loans from our banking businesses increased by 7.4% annualized in neutral currency and by 13.3% annualized in reported currency to GBP 36.3 billion, benefiting from the 9.5% appreciation of the rand to pound sterling compared to 31st March 2025. Growth was driven across our private client lending and corporate lending books in both geographies. Customer deposits increased by 5.7% annualized in neutral currency and by 11.5% in reported currency to GBP 45.5 billion. Funds under management in our South African Wealth and Investment business increased by 26.7% since 31st March 2025 to GBP 29.6 billion at 28th February 2026. We saw strong inflows in discretionary funds, which were partly offset by outflows in nondiscretionary funds.

So for the year ending 31st March 2026, we expect to report the following: adjusted earnings per share to be between 3% and 6% ahead of the prior year; cost-to-income ratio to be between 52% and 54%; pre-provision adjusted operating profit to be between 3% and 5% ahead of prior year; credit loss ratio to be within the through-the-cycle range of 25 to 45 basis points; group ROE to be between 13.3% and 13.7%, this being within the group's medium-term target range of 13% to 17%; group RoTE to be between 15% and 16%, within the 14% to 18% medium-term range.

The group has robust capital and liquidity levels to deliver on our clear strategy to enhance long-term shareholder returns. We are focused on growing market share, deepening client relationships and driving incremental returns while maintaining cost discipline and capital efficiency.

I will now turn the call over to questions.

[Operator Instructions] Our first question is from Harry Botha of Bank of America.

Is it possible to give us some insights into the U.K. NIM, how it's progressing? And if you still see a stabilization in that NIM as we move into 2027 and '28? And could you possibly also provide us more insights into the slightly lower ROE guidance for both South Africa and the U.K., please?

Okay. Let me ask Ruth to talk to the NIM situation in the U.K., and then I will tackle the ROE question.

Harry, thanks for the question. We continue to see good levels of client activity and increased loan growth against a very uncertain macroeconomic backdrop, particularly in the United Kingdom. As expected, interest rates on average are lower across the period, and therefore, this has affected NIM to some extent. And as other banks have mentioned, there is a credit margin compression in the market. Nevertheless, we have been able to deliver or guide to performance, as we have indicated today, really making up for reductions in NIM through increased fee income. We've seen very good activity through the fee line. There is strong market demand for attractive transactions and for good credits and good deals, and we've been able to benefit from some of that through the period.

Okay. Thanks, Ruth. And a comment just on the ROE guidance. We have guided priorly for circa 13.7%. We have given you a range whose midpoint is at 13.5%, so a 20 basis point moderation of the previous guidance if you work on the basis of the midpoint. As Ruth indicated, from a U.K. perspective, there has been a level of margin compression given the kind of competition that is in the market. And obviously, a reduction in the average interest rates out in the market. And given that our book is different to the other books from a U.K. perspective in terms of the size of our structural hedge, we obviously have seen that level of reduction.

As Ruth correctly indicates, we have seen significant uptick in noninterest revenue. We have also guided from a U.K. perspective that our impairments will be towards the upper end of the 50 to 60 basis points guidance that we provided priorly. So as we go forward, the interplay between lower interest rates and higher activity and lower impairments will come to the fore.

In this period, we have not seen enough of that interplay. And obviously, as we go forward, we had expected that we would see further rate cuts and support for higher activity, and as a consequence of the lower rates, lower impairments. But we all know we are in a very different environment. We do not know yet the extent of the war in Iran and its impact on oil prices and how long that may last. And therefore, the inflation outlook and the interest rate outlook is quite uncertain as we go forward. So that largely accounts for the U.K. ROE guidance.

On the SA side, we've indicated that we're looking at approximately 18%, around 18%, which is pound denominated, given the fact that the pound has -- the rand has appreciated by about 10% versus the rand (sic) [ pound ]. And on an average basis, it is flat. So our revenue will have been fairly neutral in terms of impact, but our capital would obviously have been impacted when you average your capital. So it really is partly that. So in rand, you will have a higher ROE for SA Bank, which would generally be where we would have expected it. But the currency impact on capital would account for what looks like a lower ROE guidance for our South African business. I hope that helps, Harry.

Our next question is from Stephan Potgieter of UBS.

Hopefully, you can hear me. Just on the credit trends, it looks like it's picked up quite a bit, but if you can just unpack the U.K. versus South Africa, it's obviously due to the currency impact as well, but did the U.K. also accelerate towards the end of the period?

Stephan, I think the credit trends have remained in a, I would say, pretty similar territory if we look at it. South Africa is quite a low ratio. So there is influence on levels of recoveries and so forth. But I would say gross impairments are fairly similar, if not slightly better. And from a U.K. perspective, we've stayed at the upper end of our guidance of 50 to 60 basis points. I wouldn't say that there's any particular trend to call out over the period.

Sorry, maybe I haven't been clear. I'm talking about credit growth. So in terms of loan growth.

Oh, sorry.

Yes. I mean you had a pickup in loan growth that you're reporting there. So is a lot of that coming from South Africa?

I think it's actually across the book. So I'll let both Ruth and Cumesh give you some indication.

Stephan, so from a U.K. perspective, on the mortgage side, post the budget late last year, we did see demand for mortgages pick up and the pipeline has grown very well. And so that book growth has been running strongly at around 9% to 10%, which we're very pleased with. But of course, things were slow in the run-up to the budget. And then in terms of corporate and other lending, we've seen very diversified book growth in different pockets of the business. So very pleased with that outcome, strong velocity of transactions and good demand for good credits. I think this is a market where there's definitely strong demand for attractive credits and at the same time, a market where weaker credits will not be able to be funded.

Stephan, just to maybe add from a South African perspective, we saw actually good growth across 2 of the core client franchises. Our private client franchise, both in mortgage activity, we've seen relatively good growth come through that. And actually, very good growth coming through our corporate and investment banking franchise in South Africa, where we saw double-digit loan growth.

That's very helpful. Maybe if I can ask one more question unrelated to this. Just on the Motor Finance redress situation, obviously, the FCA proposed scheme to be announced soon towards the end of the month. In your full year results, have you made no further provision?

Stephan, that's correct. I think we remain comfortable with our levels of provisioning. I think we look forward to seeing the sort of finality of the redress scheme itself being announced. But until then, there's no reason to adjust anything.

As you pointed out, Stephan, we were expecting the outcome very soon, the final outcome. We are operationally ready to be able to meet that given what we know from the earlier consultation papers. And as you know, we really started in this business quite late around 2015, even by 2016, only had around GBP 11 million on the books and by '21, about GBP 555 million. So a very small percentage of our overall book, very small market share. And as Nishlan points out, the provision remains where it was.

[Operator Instructions] At this stage, as there are no further questions, I will now hand back to Mr. Fani Titi for closing remarks.

Thank you again, Donald. I'm sure that there will be a lot more questions that our investors and analysts would like to ask. So as usual, please reach out to our team.

Just reverting to the 2 questions asked of the 3, I won't cover the FCA redress scheme. We're quite pleased with the expansion of our balance sheet, both in terms of the loan growth that we have seen over this period. In the U.K., as Ruth indicated, strong growth in mortgages on the private client side.

For those who are in South Africa, you will know that the macro economy had turned somewhat upwards given some of the reforms that have been implemented. So the credit growth is skewed towards our CIB business as a consequence of that. And generally, while the environment is quite choppy and the outlook is quite difficult given the war, our business remains resilient. We've gone through a number of these crisis over time. The clients that we have in South Africa at the top end of the market, the corporates we serve there are large corporates. In the U.K., equally, we have private clients, and we have the corporates we have served over time. So generally, we've had a higher level of resilience relative to the other players that are exposed to the broader economy as such.

We've continued to hold high levels of capital and of liquidity, in particular, from a South African perspective, dollar liquidity. So we feel that we are ready to navigate rather this particular crisis from a South African economic perspective. The economy is in a much better place than it was when COVID hit about 5 years ago. The fiscal outlook is much stable and government finances are much more stable. We also see a very competent monetary policy management. Of course, that will be complicated by the outlook of the war. In the U.K., as Ruth said, the budget, we have seen better activity, again, complicated by -- the outlook is complicated by the war. Too early to say what the impact will be, and it's dependent on how long it will be.

If you want to dig deeper into any of these questions, we will be happy to engage with you one-on-one. Please contact our teams. Thank you again for dialing into this conference, and do have a good day further.

Ladies and gentlemen, that concludes today's conference call. Thank you for joining us. You may now disconnect.

[Audio Gap] So before I start, let me just thank all my colleagues for the contribution they make in looking after our clients.

Because we're going to be talking a bit more today about our growth plans in the second half of this presentation, I thought to start off with our strategic positioning. As you know, we have always been a business that is not everything to everyone. We have select clients that we serve in fairly narrowly defined markets. And it is really important as we embark on a path of growth that you understand that we will be evolving naturally the model that we have been following all the time.

As you know, our model is based on the fact that we support our clients on their journeys, both as personal clients and as business clients. and we tailor solutions to the needs that they have. And these solutions are delivered with a high touch and a level of service that we generally refer to as out of the ordinary. So as we think about the next number of years going forward, that is the lens through which we will look at what we are trying to do.

We're very pleased with these results given the environment that we're operating in today. And as a business, as we look forward, we have a level of excitement, enthusiasm and energy that we can do more for our clients. And we will have the opportunity in the second half for some of my colleagues to present on our offering to the corporate mid-market. Really excited to hear what they will have to say.

At the final year results in May next year, we will present our proposition to enhance our offering to our private clients. You know that we presented a comprehensive strategy for growth in May. We are now starting to unpack elements of that strategy. And hopefully, you will find that interesting and meaningful.

As the last point on the slide shows, this is a business focused on building. this is still the slide. I'm still on the same slide. Is this what is on the screen. See I've got 2 slides in front of me. And I'm talking to the right-hand side of my presentation.

So the last point on that screen, which is what I'm talking about in terms of our strategic positioning, relates to the posture of our business for the next 3 to 5 years, a business dedicated to disciplined growth.

Okay, Nish, I'm going to do this click. Good. Nish is going to take you through the results in great detail, but I would like to give you some basic highlights on these results and some key takeaways.

We are very pleased that we are reporting a growth in adjusted earnings per share of 2.5% to 40.5p. We're also quite pleased that we've seen significant activity in our clients, and this is evidenced by the growth in net core loans and advances, the growth in deposits and the growth in funds under management as represented by the second set of graphs. So our client franchises are deep and our earnings are diversified in nature.

Capital generation has continued to be strong, and this enables us to reinvest in the business. The reinvestment, for instance, in our corporate mid-market franchise, the reinvestment in our platforms as we modernize our estate is by an example of the strong capital generation that we have.

And in addition, we are able to reward our shareholders with distributions. You will know that in this period, the Board has declared a dividend per share of 17.5p, and we also have undertaken a significant portion of the share buyback program that we announced in May. So capital generation is really quite important.

And the last set of graphs on the right show that our return on equity is well anchored within our medium-term targets. The presentation today will talk about how we move from circa 14% to the top end of our range of 13% to 17%.

If you look at the next slide, our pre-provision adjusted operating profit is slightly behind at GBP 527.4 million. As I've indicated, we have very good client activity. So our net interest revenue was very strong in this period, but we had the effect of lower interest rates on our endowment. And so, our net interest income was negatively affected by that.

As indicated, we are also investing heavily for growth as we move forward. Our cost-to-income ratio at 51.9% is below our indicated range of 52% to 54%. As we look forward, we've indicated to the market that we expect to be in this range even though we will continue to invest in people and technology, firstly, to support our current revenues; secondly, to transform our operating platforms; and thirdly, to invest in the growth initiatives that we have spoken about in May.

Our credit loss ratio at 35 basis points is in the through-the-cycle target range of 25 to 45 basis points, even though interest rates from where we stand are still relatively high. We would expect over the next 12 to 18 months that we will see a continued reduction in interest rates, even though that may be at a pace that is slower than we would like. Very happy with the return on tangible equity at 15.7%. And of course, the increase in our tangible net asset value per share of 7.4% is very pleasing in our view.

Not going to talk to this slide on our commitment to our path to net zero by 2050. As expected, you don't have changes in this particular slide from period to period. This is a long-term commitment towards reducing our fossil fuel exposures, driving sustainable and transition finance activities and promoting within our client base a movement towards being more sustainable. So you shouldn't expect changes on this slide at every reporting period, but it is important that we indicate that we remain committed to our path to net zero by 2050.

Now to unpack the results, I'm going to ask Nishlan to take us through the rest of the results presentation, and I will close off at the end. Nish? The slide on the right is the next slide.

We got it. Thanks, Fani. I'm just going to spend a little bit of time to give you some of the context that we operated in, give you some detail about how we've performed geography as well as across our businesses.

So if we start with the context, and we had a debate when we produced this slide as to exactly how you calibrate 1.5% and 1.1% because these numbers are still relatively low in terms of growth. But I think that the direction is extremely important.

If we look back into 2024, we were all talking about the election environment and the fact that most of the world will be in a state of flux, in a state of change. And I think we're through that particular cycle, but the consequences is what we continue to live out.

And those consequences has a bearing on how these projections actually move out over time. And it does really feel like we're moving into territory, where that's becoming a lot more clearer, albeit that there are still pockets and pockets and pockets of uncertainty that sits in the system itself.

Interest rates interestingly have been on a path that's reducing. And if we spoke to you, again, a year ago, we would have probably have expected these graphs to have a sharper line down, and that's not the reality because at the end of the day, some of those uncertainties and particularly the implications around inflation has been tightly managed across the world. But that being said, we are definitely in a reducing interest rate environment.

And in fact, from a South African perspective, the debate around setting the inflation target closer to 3% with a 1% [ flex ] around those numbers really will encourage these numbers to get towards 8% from a South African context. Now I'm not sure when we last heard those sort of numbers in a South African context.

The rates have been coming down from a U.K. perspective, but probably similar to South Africa, yes, we see it down by 1% year-on-year, but that rate of reduction is still relatively slow. And it's because of these things, we continuously have indicated that interest rate reductions will have a negative impact on our earnings in the short term.

But as a business, we encourage and we really want to see a lower interest rate environment. And hopefully, what you will see in these results is the momentum that gets introduced, particularly in the non-interest revenue lines as we go through the detail.

We look at exchange rates, the rand had a negative impact on our income statement as the average rates were a bit weaker in the period. And in fact, from a balance sheet perspective, we had a positive impact because the closing rates were a little bit stronger over the period.

And off late, I think the rand has seen good support, particularly if you think that, that economy has now come off the gray list, and the fact that we've seen an upgrade from Standard & Poor's an upgrade that we hadn't seen for 16 years. And that, I think we should not underestimate.

From a markets perspective, I draw your attention to the March '25 blip that you see on this schedule, and that's really where we opened this financial year with relatively weaker markets at the beginning. And since then, we've seen strong growth in markets, and you will see that in our AUM. But what we are also highly encouraged by is the record flows that we continue to see into our platforms, particularly in South Africa.

Now looking at our earnings drivers. AUM for our wealth business in South Africa is up 13.4%, yes, 11.3% in neutral currency, and that's supported by net inflows for this first 6 months of ZAR 11.5 billion, a significant number.

We also have acquired a few aspects and bolstered our Swiss platform, and that's added ZAR 5.2 billion of AUM and net inflows. Clients continue to manage their money. So from non-discretionary funds, we do continue to see some volatility in that.

Rathbones reported GBP 113 billion of AUM, and that's really supported by stronger markets. They had net outflows. I think it was around about GBP 0.2 billion. But the business has been focused on the integration. And I think from our perspective, we see a business that has now really gone through the bulk of that and should shift to the front foot focused on markets and focused on flows.

Net core loans grew by 8%, and I'll unpack that by geography on the right-hand side, and it's quite pleasing to see the green arrows around that particular wagon wheel. It's not a perfect market yet, and it remains a highly competitive market in a low-growth environment. And it's in this context that we produced these numbers.

And that is also supported by the fact that we continue to grow our client pools, and we continue to penetrate markets deeper, but really holistically focused on what Fani has highlighted, which is to be pinpointed in terms of where we execute our efforts.

Now, you reminded me of how this slide starts, so let's get it done. Adjusted operating profit was down 1.4% in the period, and let's look at what's driven that particular outcome. We see that net interest income has reduced by 2.1%.

And again, when we speak of the short term, this is the impact that you will see in the 6-month measurement is that low interest rates in both South Africa and from a U.K. perspective has had a negative impact. However, in certain instances, we've managed to navigate that really supported by the fact that we continue to see book growth across our platforms, albeit at competitive margin levels as well as improving the cost of money across our businesses.

Non-interest income has largely neutralized that drop in net interest income, and that has been supported by strong fees and good investment income over the period. And that's momentum that has come into the system as well as the fact that we've seen stronger advisory fees in this particular period.

Our impairment charge has dropped from 42 basis points last year to about 35 basis points in this period. I would say the real outcome is a very similar position to what we saw at the end of March. Asset quality remaining robust across our businesses. We do have some experience specific impairments, but we don't see any trending in any of our portfolios that causes any particular concerns for us.

I think as we introduce our strategies around, for example, corporate mid-market, we are very mindful of the fact that in that particular market, you may have higher levels of impairments supported by higher margins. And at the end of the day, we will talk about those probably next year when we unpack some of that detail.

Operating cost is up 1.5%. So you may think that we've really, really cut our costs. But the reality is that we've -- when I unpack the detail around that, firstly, variable remuneration is lower in both geographies, and that's a function of determining the variable remuneration based on economic return, as well as the competitive environment that we operate in, but really following profitability in the different businesses itself.

Fixed costs are actually running well ahead of inflation, and I'll get into some detail around that. And the way we look at fixed costs is what does it cost us to run the business as it stands. And those costs are running at around about 1% to 1.5% ahead of inflation as we absorb some of the costs that have come into the system in both geographies as well as other service costs and the fact that we've -- although tightly managed headcount, we still have increased headcount to service the business overall. And I'll unpack that for you in some detail.

And the second area that drives costs is really the implementation of systems and processes that will support our growth initiatives.

The third area is to continue to build resilience in our business and to continue to enhance and modernize our platforms. So those are the 3 areas that we continuously monitor across the business with the cost-to-income ratio at 51.9%.

From a technology perspective, one day, Lyndon will present this, and I'll get over the nervousness. But at the end of the day, it comes back to what we said. We continue to modernize our platforms and a lot of that modernization is actually in the run rate. We've given you a range of our cost-to-income ratio of between 52% to 54%, and we remain confident that we will maintain the run rate around that.

We have very low capitalized software and some may criticize that as the fact that we may be transitioning at a slower pace, and you will see that number pick up as we invest in our platforms, but again, not an overly material number on our balance sheet.

Our overall technology spend at 20% of operating expenses, we think, is on par with the market. Yet we continue to invest in our platforms, modernize those and remain extremely mindful in an environment, where AI becomes a lot more relevant, the counterbalances around things like cyber and the rest of it become more acutely important for us to keep a handle on.

So getting into the divisional reviews. From a geographic perspective, we have produced GBP 230 million from our U.K. business for this half. You will see that our contribution from Rathbones appears significantly up at 18.2%. And that is a function of the fact that the business has achieved synergies of around about GBP 60 million of run rate in this period.

However, if I take you back to markets, we started off with a very weak first quarter, and that was reflected in lower revenue for that particular business in the 6 months that was reported at the end of June.

However, we have increased our accrual on the business because although the total shares in issue, we have effectively around about a 41.25% interest, there's a portion of those shares that are held within Rathbones that are not yielding dividends and therefore, should not be included.

And in fact, if you take our number of shares and multiply it [Technical Difficulty] operating EPS, we get to accrual rate of around about 43%. And we have some catch-up in this period, which has accounted for just under around about GBP 4 million in that number.

The Specialist Bank, I will get into some detail. Net profit is really in line with the prior year. Group Investments represents the dividend on the sort of 10% stake that we hold on Ninety One. With Ninety One effectively combining with the Sanlam platforms, we expect that stake to drop to about 8.5% on the bigger platform itself. That business announced their results recently and have grown their dividends by 11% year-on-year.

Group costs are down. As we indicated, it will reduce to some extent. And we think it's at levels, where that probably operates at.

Looking at the Specialist Banking business, yes, we did see net interest income reduced by 5.8%. That's in the context of strong growth in terms of our lending books, but the decrease in interest rates in the short term will have a negative impact.

When you look at the market, some of the banks have defended that well in this particular cycle because of the larger structural hedges that they have in play. But our mix of our deposit base, we are not in a position to have those levels at this point in -- at this particular position.

Net interest -- non-interest revenue grew by 11.4% in the period, really underpinned by strong growth in fees, to some extent, lower opportunities from balance sheet management and other trading activities. And again, hopefully, you have seen that the introduction of momentum into the business in those lines as well as seeing higher listed advisory fees in the period.

Our cost-to-income ratio is marginally up at 53.3% with fixed costs growing at 7.3%. As I've indicated, our run costs have probably increased by around about 4.2% to 4.3% and the differential is the cost that we are incurring as we continue to invest into our platforms.

And looking at the credit loss ratio for this period at 56 basis points. We think it will remain in that sort of ballpark as we look forward to the year-end as we still think -- we still see the impact of interest rates that, that has on these higher levels. But as you can see from our staging, the book has remained relatively stable over the period, and I've clearly indicated that we see no trending to call out to you guys.

I've really unpacked Rathbones from an earlier conversation, but these are some of the key numbers. And I think it's worth calling out that the business remains focused on delivering a trajectory towards a 30% operating margin by the end of 2027 financial year.

Now moving on to South Africa. Here, we see total operating profit reducing to -- by 2.6% to ZAR 5.7 billion. And if I unpack the numbers, you can see where the sensitivity in that reduction is in group investments, and that's really a listed stock that has gone up and down in these markets. Overall, you will see that the group investments layer will continue to be less relevant, as we continue to realize add value that remain -- those remaining investments.

The Wealth and Investment business grew by 2.1% and the South African Specialist Banking business by 2.6% with group costs remaining relatively steady.

Unpacking the Specialist Bank, Here, we saw net interest income increase by 6.5% in the period, really a function of continuing to challenge the cost of money and the cost of deposits. And to some extent, we are starting to see good momentum in our corporate mid-market deposit gathering capability, which will continue to enhance the net interest margin in that particular platform as well as the increase in core loans and advances, but we had to absorb obviously lower interest rates on our net surplus cash positions that we hold.

Non-interest revenue decreased by 2.1%, and that's really a factor of lower trading income and lower client flow income in this particular period, offset largely by higher fees for reasons that I've already effectively identified, and that is increased activity in our equity capital markets, advisory activity as well as in the private banking business itself. In this business, investment income has held up relatively strongly.

The cost-to-income ratio is also slightly up at 47.4%, but well within the 49% to 52% that we indicate as the long-term sort of level that this business operates at. Here, operating costs grew by 10.2%. And from a run perspective, those costs have grown by about 5.8%, absorbing inflation, absorbing a weaker rand and the fact that you also do have some foreign denominated costs in this particular area. The differential, again, being supported by areas of focus on implementation of strategy.

The credit loss ratio is at 12 basis points. So it remains relatively low, and that talks to the quality of the book and the experience of the underlying book. Again, if we look at the staging, the fact that we have seen some curing of Stage 3 assets in the current period, talking to the fact that the quality of the book remains very robust.

We are very proud of the performance of the wealth business in South Africa. The business continues to have a very strong and high integration with the private banking business in South Africa, and that's really our private client offering in that market, distinctly positioned with our offshore capability and the fact that we are deeply servicing that particular market. I think the operating margin is slightly tighter, but still very healthy at 30.5%.

Now this slide, we debated on whether we should pull it because there's a few red blocks on this slide. But hopefully, you can see at the bottom of the first 2 red blocks, they're actually green in rand, and that's really the impact of the slightly weaker exchange rate in the period. And group investments will continue to become less relevant, but with some volatility because we have a listed position in that.

And from a U.K. perspective, underlying profit growing by 3% and in fact, closer to 9% when we factor in tax and the cost of AT1 instruments, as we've removed some of the double cost that was in the system last year, having redeemed some of those instruments. Return on equity and return on tangible equity remaining market comparably strong across the businesses.

This is for one of the analysts that asked us to reconcile operating profit to adjusted earnings. And again, I've called out the factors that apply. So I'm not going to spend too much of time on it. And that's a summary of the numbers that we've spoken about, and you can see that our average allocated equity at GBP 5 billion. So that's me.

One more slide, Fani, 2 more. Net asset value and tangible net asset value on the next slide, but Fani has gone through that detail. And the last point I'll talk about, Fani, it's now your time, is that capital has remained robust. We have adopted Basel 3.1 in South Africa, and we'll see those capital ratios come down a little bit in the next -- by about 2028, but we have maintained high levels of capital to absorb those. And from a PLC perspective, the ratios are extremely healthy.

Now, it's time for you.

Thank you, Nish. You can see that Nishlan is playing some games with me. He says he's done. And with that said, he says he's not done. I hope in the presentation, you have taken away the sense of a business that is performing as we expected in these markets at a headline level, as Nishlan indicated, I'm okay to you.

At that level, we have had a relatively strong NII performance, the effect of lower interest rates and continued investment in our business, as we indicated to support current revenues to support the modernization of our estate and to support the growth initiatives. So for us, we feel that we're building for the long term, and we're excited about that as a path going forward.

So as we look forward to the full financial year, we will expect the performance in the second half to be generally in line with the first half performance that we have reported here. We still operate in a tale of 2 cities. The South African economy is in a slightly better state, as Nishlan may have indicated, growth forecasts are being revised upwards. We've seen a credit rating upgrade, albeit that we are still 2 notches below investment grade, but the direction is great. We have seen the removal of the country from FATF, the so-called grey list.

And as we -- the country hosts the G20, we have seen a greater interest in intra-Africa trade and the commitment by the leaders to open borders and to facilitate more trade. So that economy is looking a little better.

In the U.K., while the economy is still constrained, given some of the uncertainty around the fiscal space, and in fact, we are waiting with bated breath, the budget speech by Rachel Reeves next week, we still see a higher level of uncertainty.

What we did obviously will be policies that support growth and investment and obviously, policies that do not punish those that are successful and are creators of wealth. That is what we would hope for, what we get is that obviously is what we're all waiting for.

So given that macroeconomic picture in the 2 largest geographies, we do expect that ROE for the full year will be at around 13.7%, as I said, in line with the current ROE. SA will be at around 18.5%. We have a target range of 16% to 20% for SA. For the group, we have a target range of 13% to 17%. And for the U.K., we have -- we will expect ROTE to be around 13.6%.

Nishlan has spoken quite extensively about costs. We do expect that despite the investments we're making, we should still be coming through in the 52% to 54% range. Credit loss ratio still to be within our through-the-cycle range of 25 to 45 basis points.

Again, as Nishlan indicated, we would expect this to improve as rates continue to go down, client activity increases. So essentially, in a diversified model, where you have net interest headwinds, you would expect over time that client activity should improve and that your credit loss ratio equally should improve. And obviously, we have a significant wealth businesses that contribute noncapital-intensive revenue.

So we're well positioned to manage the complex external environment. And in addition, we are committed to supporting our clients as they navigate the uncertainty that is in the economic environment.

So in conclusion, we remain excited about how tightly our business is focused in the client segments that we target. We are excited about our continuing entrepreneurial culture, where we can flexibly serve our clients in a tight environment and our clients are resilient. They have scale and -- sorry, our client franchises are resilient and they have scale. So as we continue to invest and build, we would expect that we will see even better scale.

I spoke about the strong generation of capital to continue to invest in our business and to continue to reward our shareholders with distributions. The presentation that will come shortly is a presentation about the future, about the investments we're making and about how we're expanding our overall franchise.

As Jay Neale has said last night when we had a leadership meeting, the business is focused on what we can build. The external environment is where it is. We have to back ourselves to execute on the opportunities that we have ahead of us.

On that note, that's the presentation. We're happy to take questions. I think we will start off here in London. Is that the way we do with [ Cue ]? Cue has been conducting how we go about. So I have to look at the employee structure. Any question from London?

Okay. It seems like we don't have a question here. So we'll go to Johannesburg, where Cumesh is holding fort. Cumesh has been wining and dining precedents and to the high heels. So Cumesh, if you can be with [ mortals ] like us for about 40 minutes or so. Any questions from Joburg?

Thanks, Fani. I'm just checking in the Johannesburg room if there are any questions. No questions from the room in Johannesburg.

Thanks, Cumesh. I am tempted to give a chance in London again, but Stephen advised me some time ago, don't over offer opportunities for questions. So in respect to the elders, I will bring this particular presentation to a close. Online. Okay. No questions in London, though. So let's see what we have online before we close.

[ Don ], do we have anything online?

Fani, we have a few questions online. The first question is from Radebe Sipamla from Mergence Investment Managers. Could you please comment on the reports this week that Investec would be partnering with Pepkor to help it with launching banking services across its store footprint? Is the SA retail banking strategy pivoting towards being more mass focused?

I have tried throughout this presentation to indicate that we remain a niche player. We have select client segments that we serve. And as we go into the next presentation, you will see why that is the case that we can win in the corporate mid-market because we are not trying to be everything to everyone.

So in short, we do not have any agreement executed with anyone. And we will not comment on any of our clients and any discussions that we may or may not have as we go forward. Needless to say, inclusion, financial inclusion within the South African context is something that a lot of players are worried about. And we continue to see what role we can play in that market, but nothing of significance. I understand that the client you're talking about has also said categorically that they are not in any such bank partnership.

The next question is from Baron Nkomo from JPMorgan. Customer deposits increased by 3.6% annualized. Please discuss your funding strategy, both in South Africa and the U.K. going forward, especially in light of the changing interest rate environment.

Okay. I'm going to ask Cumesh and Ruth. They've had such an easy ride today, so they're going to have to answer. Let's just say it quickly this way. One of the critical reasons why we want to go into the corporate mid-market is also to expand our deposit franchise and have access to transactional deposits.

We have been gathering retail deposits at a significant pace. And within the South African environment, we have been improving our liability mix, reducing reliance on corporate deposits and obviously getting a much more optimal funding base. That's why as much as interest rates have decreased there, if you do more work on our margin, you will see that we've been able to defend some of that margin.

And in the U.K., we have a wide distribution network in terms of how we access deposits. But let me leave it with Ruth first and then Cumesh next.

Good morning, everyone. Thanks very much, Fani. We are always looking to optimize our overall cost of funding. You will have seen, if you look through the analyst book this morning that our loan-to-deposit ratio looks very healthy at around 81%. In the recent period, we have repaid our TFSME, and that's why you see the level of deposits where it is.

We are seeing the overall cost of deposits reducing as interest rates are coming down, and we'll constantly be looking for opportunities to reduce our overall cost of funds. Very comfortable with where we positioned our funding, continue to keep our sources well diversified in multiple different markets, and the Investec brand has very good traction in the U.K. deposit market.

Thanks, Ruth.

Thanks, Fani . I think you -- just in your opening, you covered a fair bit of the deposit strategy in South Africa and funding strategy in South Africa. I think safe to state in the period under review, we were able to grow our non-wholesale deposits by close to 10%, and that's part of a very clear funding strategy to continue to grow retail deposits and continually balance that against wholesale deposits.

So I think our funding channels, particularly in our private bank and other areas, including our corporate cash management channels, have all been quite successful in raising retail deposits. We're excited about what can be achieved in the corporate mid-market over a period of time, and we've already started to see how that business is getting on to the flywheel of deposit raising.

So a very clear strategy in South Africa. The team have been working on it extensively over the period to continue to ensure that we have the right balance of funding mix to support the growth of the business going forward.

Thanks, Cumesh. I know that about a year or 2 ago, some people were worried that our overall deposits looked like they were going down in SA, but it was really the wholesale side, and it was part of our strategy. So thank you. And may you continue to be successful there.

A follow-up question from Baron Nkomo of JPMorgan. The cost-to-income ratio increase also reflects investment into people and technology. Please elaborate on the nature of these investments and how quickly you expect them to translate to revenue and efficiency gains.

The question is probably not as accurate as it has been stated. If you look at the full year cost-to-income ratio to FY '25, our cost-to-income ratio was 52.6%. So the current 51.9% is actually in line and in fact, better. Of course, relative to the September number last year, which was about 50.8%. If memory says well, it looks like it has increased. So we're very comfortable with where that number is and our efforts to continue to run efficiently.

Nishlan tried to explain the 3 areas of cost, one being the normal run, where we are just over inflation and then the investment in the modernization programs. We would expect that in the modernization program, quite a significant bulk of those investments should be done in the next 3 years or so. And the other will be probably 2 to 3 years thereafter. So the benefits will obviously come as you implement those investments and you complete them. And in some cases, you then do not run a parallel infrastructure.

And obviously, with respect to the investment in the mid-market, we've given you a sense, and we will unpack it of what levels of revenue we may expect to achieve by 2030. And in the case of the U.K. corporate mid-market, because South Africa is a number of years ahead in terms of implementation, we will give you both a '30 view, but an FY '32 view just to give you a sense of the returns we hope to get from these investments. We run a highly disciplined process of investment, well governed by both the executive and the Board reviews that on an ongoing basis.

And as Nishlan indicated, we have a very low level of capitalization on the balance sheet in terms of technology. I think the number is GBP 8.6 million or so. And as we go forward, given the investment, that number may increase. And again, in Nishlan's words, non-materially from the perspective of the overall balance sheet.

Next, [ Donald ]?

Thanks, Fani. The next question is from Chris Steward of Ninety One. Can you give an update on the cleanup of the South African group investments portfolio, please?

We're really at the tail end of that process. As Nishlan indicated, that number is getting to be non-material as we go forward. We have 2 or 3 investments. The largest investment you will know, Chris, and we continue to work with our core shareholder there to find ways in which we could achieve our goals.

They are the smaller investments, some of them are in process, but we are not duly concerned about it. It's really something that is almost out of the system. That's why Nishlan says that number is getting smaller and smaller and largely irrelevant. Chris, you must be happy about that table Nishlan gave you, which has the cost of AT1. So Nishlan was referring to Chris. So now that he's online, I can talk to him.

Thanks, Fani. The next question is from Harry Botha from Bank of America. Can you provide more color on the reduction in your 2026 U.K. ROTE guidance from 14% to 13.6%.

We've indicated that the environment continues to be constrained. I talked about a tale of 2 cities, where from a South African perspective, the sentiment in the economy is better, some upward revisions in the expected growth over the medium term.

Clearly, the U.K., there is still a higher level of uncertainty, even though the opportunity for us remains quite significant. We've tried to explain the trade-off between net interest income impact as rates come down and the activity that we see, the increased activity that we see amongst our clients and over time, as those rates go down, an improvement in the credit loss ratio. So that is the interplay between those 2.

We are not concerned about what in our view is a marginal decrease, about 2% or so percent in that ROTE. And from a market context, we remain very competitive, as Nishlan said.

Thank you, Fani. We have a follow-up question from Harry Botha. Can you provide detail on the outlook for the South African fee and commission income?

Cumesh, do you want to bet on that? I mean, obviously, we're going to try to wrap this one up in the next 5 or so minutes at most because we do have a mid-market -- corporate mid-market presentation. Cumesh?

Thanks, Fani. I think if we look at the period ahead, we see equity markets positive movement in equity markets. We've also seen higher levels of IPOs and M&A activity. So all things being equal, we hope to see an upward trend in terms of fee and income growth in the SA context, together with some increased trading activity.

We have a strongly performing wealth business, 13.4% increase in funds under management, [ ZAR 11.5 ] billion net inflows in rands. So our outlook on [ thus score ] is positive. Thanks, Cumesh.

Shall we take just one last -- how many more questions do we have?

We have one last question, Fani. The last question is from Jarred Houston of All Weather

[ Hoping you have many whole lot ] of questions there.

He asks, why has the progress on the share buyback program been slow?

Well, we've executed about half of it. We're comfortable with the pace, and we will continue to execute as necessary. When we made the commitment, we said over the next 12 months. So achieved about closer to half at half year. So that's okay.

Thank you, Fani. At this time, there are no further questions.

Thanks, Don and Cumesh. And to everyone that's attended, thank you for your attention. And, in particular to the analysts, thank you for your interest. As usual, we are available for more in-depth interaction on the results to provide more depth and color on the different aspects of it.

We're going to now take how much time, Cue? About 10 minutes. If we could be back at the top of the hour. So in London, that will be 10:00 and in South Africa, that will be 12:00, and we're really excited to show you what we are building on the corporate mid-market side. Thank you very much and see you in about 10 minutes.

[Break]

Well, good morning again. And it's always -- it's noon in South Africa actually. It's always lovely to see the Zebra Gallup. And it is really appropriate for this next stage of the presentation because we are front-footed, excited about growth and energized to execute. I'm talking to the slide on the left, Cue just to make sure that I've got my orientation right.

Just to start off, as you know, we are on a journey of disciplined growth, and we will cover but one element of the journey, and we will give you a sense of how that plays into the overall strategic path over the next 5 years or so. I will be joined on the stage by Nick Riley, our Head of Corporate Mid-market in SA; and [ Andy ]. I don't know how it happened that we all have the same ties, but let that be.

So I'll give a brief overview of why this segment is both relevant and important for our journey as we go forward. And starting off, I will not repeat our strategic positioning other than to say that the whole organization is energized behind the objective of growth. And this is one element of that story.

We started this journey in 2019, and we had a CMD presentation, if you remember, in early 2019, where we said to the market that we would like to achieve at least a 200 basis point improvement in the performance of the business as measured by ROE; and the key planks in that plan were that we would look at capital allocation particularly strictly with the intention of generating returns above the cost of capital.

So as a consequence, we exited a number of businesses either because our risk appetite was a bit narrower or because we could not gain scale in those businesses. And while the restructure was an important part of what we did, we also invested in our U.K. Private Banking proposition. You may remember that at that time, we were losing about GBP 30 million a year on that proposition. And we decided to make an investment, and we have been able to execute on that growth plan.

So as we engage on another fresh investment into an area, we are encouraged by the past successes over the last number of years. So we embark on this process with a lot of confidence about what the business can achieve. In May, we laid out a strategic path for the next 5 years or so.

Just to go over it quickly without too much talk on it:

The first idea was that we wanted to grow our existing client franchises. So we sought to deepen our franchises. We sought to scale them a lot more. And of the 200 basis points that we sought to gain in the upliftment of our ROEs, half of that would come from the scale and the leverage coming out of our franchises.

The second area of work was the corporate mid-market, and we will talk about that later today. So I wouldn't say much.

The third was the expansion of our private clients capability. We have an international franchise. We have, as we discussed earlier today, a leading franchise in South Africa, which is international. We have a capability in Switzerland and so on and so forth. And we have a strategic positioning in Rathbones post the combination of Investec growth and investment in Rathbones to gain scale and capability. So in May, we will give you a sense of how we will go about that.

And then we also said that we will continue to exercise discipline in how we go about our business. Capital allocation would be important. And one plank that was really important at the time, we said we would like to increase the proportion of noninterest revenue and in particular, wealth-related revenue. And we gave you a number of about 35%, and we were specific that to achieve that objective, we will definitely consider inorganic growth.

And the last element of that strategy was that we would intensify our efforts around creating a single organization that is client-centric, where we deliver for our clients holistically and our operating platforms will be such that we can support that single organization that is client-centric. We've talked quite a lot about the investment we are making in these platforms.

Just to move forward, why would we go into this space? And some people would say it's late in the day, some would say it's a "highly competed for" a segment of the market. The reality is that we already have a significant presence in the corporate mid-market. Nick will go through the work we've done over the last number of years in South Africa, the level of revenues we are already generating about ZAR 1.7-or-so billion and the number of clients we have there. So this is an expansion of our capabilities to more fuller service -- our clients in the mode of One Investec.

In the U.K., as you know, we've built a pretty good corporate mid-market capability, and we do a lot with our clients in that space, but we do not offer transactional banking and the fullness of the offerings that we have. So if you look at Investec and where we are, a leading Private Clients business, as we've spoken about, equally a leading Corporate and Investment Banking business in the markets that we operate in, and we already have a number of clients in the corporate mid-market.

And we think it is time for us to get into this sector and to gain market shares that would appear small relative to others, but they would be consistent with our approach of niche markets and high levels of service and high-value proposition. So it's really important to understand that we're not trying to go very wide and deep into the market. We will still follow our DNA of select client segments, high-value relationships and deep commitments and partnering of clients.

So how do we think we will go about in this environment? As I said, we will be bringing a niche-style operation, what we call a private bank service style to the corporate mid-market. And when we went down the journey of a private bank 5, 6 years ago in the current form, people said, but what would you really do that is different in terms of the market. And we have proven that our targeting was quite specific that our service model was quite specific as well, and we've been able to build a fantastic business with 8,000 to 9,000 clients, and we would be looking to get that to about 18,000 clients in the next 5 years. So we know how to build niche businesses.

We know how to work with a private bank-style service, and we're bringing this to -- this particular segment of the market. As indicated earlier, the idea is to close the gaps in our current offering in the mid-market. In South Africa, we already have a significant presence and track record. In the U.K., as part of the group strategy, we are starting that journey. But given the advantages we have already, we are very excited about that opportunity.

One of the advantages of coming in at this time, firstly, we are leveraging off our existing brand capability, our existing operating platform, but we can flexibly tailor integration of our platforms with those of our clients because technology is much more flexible. You don't have to build the way that legacy systems have been built.

So for instance, API enablement in terms of being able to do something that's bespoke to a client. And because this is the approach we're taking, we are not looking at hundreds of thousands of clients or millions of clients, because you can't offer this level of customization and flexibility if you go mass market. In South Africa, we are looking at about 10,000 clients in this horizon. In the U.K., we are looking at about 1,000 clients. You can't do this if you are focusing on the broader market. And this is in our DNA. This is how we operate.

I remember, I had a chat with a friend of mine who used to run a large bank in South Africa with more than 20 million clients. And he said to me, I cannot understand how of the 100,000 clients and the few corporate lines you have, you have built a business of the scale you have, the profitability that you have. But that's the DNA of being a niche operator with high levels of service with a level of flexibility to tailor solutions for clients.

Lastly, we are going to be naturally evolving what we already have in terms of our franchises. We hear every day that those clients, private clients who have businesses say to us, why wouldn't you develop a capability to services because we love our experience with you. So this is a natural extension of the client franchises that we already have.

In the mid-market, as we said, in the U.K., we offer a number of products from risk management-type products to lending products, but we do not have that glue that a transactional banking, full service mid-market corporate banking capability would offer. It is time for us to get in and build this business.

So why this particular market? Obviously, a high-growth segment of the market and a really important contributor to economic growth in the markets in which we operate. We think we have the opportunity to build and scale a business that will contribute meaningfully to our business. The risk-adjusted returns in this sector of the market are quite attractive. In South Africa, the operators there are generating in excess of 30% ROE in this segment. In the U.K., I think the average is around 20% or so. And this represents for us a significant opportunity.

We spoke earlier today about our efforts to diversify our deposit book and our funding base. This business is really quite important if you look at the performance of banking businesses in being able to access transactional operational deposits. We already have in South Africa, a significant deposit base. We will seek to grow that as we go forward. As Cumesh said earlier today, we are trying to diversify away from wholesale or too much reliance on wholesale deposits. So this is part of that overall strategy in building a deeper, much more differentiated and much more diversified deposit franchise.

I've already alluded to the fact that technology makes it possible for us to springboard and to serve our clients flexibly. We probably wouldn't have been able to do this 5, 7 years ago because we were building other parts of our business. And I do not think that our operating platforms would have been amenable enough for us to put this additional capability onto it. So technology will give us an ability to move forward faster. As indicated already, we believe this is smack bang in the middle of who we are as Investec. So the strategic fit is really incredible.

On this slide, and I won't read what our clients have said, the high-touch service model is really exceptional. And if you ever had the opportunity to sit with our private clients and for them to tell you why they choose to have us as their primary bank. And some of the corporate clients, we have equally do say so. So we'll take advantage of technology, and we will have the platforms that are competitive. But what will always differentiate our offering is that at the end of the line, you can talk to a human being, a very qualified human being who can solve for your problems.

We get the stories about clients having issues at midnight in New York, and they can actually get their issues solved by calling into our client support center. This model works. We have seen it work over a long period of time. We're excited to bring it to the corporate mid-market. As I say, a number of the owners of these businesses are already our clients, directors of some of these businesses are already our clients on the private side, and we are excited to extend our service to them.

How do we see the client value proposition? I mean, obviously, we're looking at -- we're already doing a lot of funding for investment in working capital that we do today. We will be able to do this with a level of focus and dedication that allows us to do even more for our clients. As indicated earlier, we have treasury risk solutions that we offer to our clients, whether you think about cash management, you're thinking about ForEx management that we do today. So we'll be able to help our clients optimize their returns and manage their risks by working with us in a partnership-type model. And that really is what is different about Investec.

We are not a transactional bank in the sense of trying to do a deal and move on to try to do another one. We walked the journey. I spoke in the morning about our model being that of partnering with clients on their personal and private journeys. That's why for those directors of businesses, when we say to them, we now can offer you a full-service transactional banking, it makes sense for them to bring those business for those owners for whom we are already doing, for instance, wealth management, and we now have this capability that we can bring to their businesses. It's a fantastic market opportunity for us. So just expanding what we do for clients and going into the market with more services.

Our clients are generally very active. So for us, we will be able to continue to advise them, but also to provide them funding to act on opportunities. In that space, being nimble, being flexible and being able to make a quick decision is actually more important than the cost of money, because our clients can take advantage of opportunities. We'll be able to do that in a more holistic way for the corporate mid-market, and we've been building over a period of time.

Those who know our business well in South Africa will know that over the last number of years, we've concentrated on the payment space, making sure that we work both with regulators and with others to make payments a lot more easier and a lot more seamless. And to go into this part of the market, you ought to be able to handle a level of volume from a payments perspective for your clients, and we have been investing in that capability. And I've talked about the personalized engagement that we offer. And there's no doubt in our minds, is a huge distinguishing feature of our offering.

So let's look at the growth and the proposition we are looking for in perspective. Firstly, we are not going outside of our term lines. We are still targeting fairly -- in a fairly limited manner. We're still looking to select clients carefully. The numbers we mentioned, 1,000 clients in the U.K. corporate mid-market, about 10,000 SA. These are not crazy numbers, but they present for us an executable opportunity. And what we are going to do with these clients is deeply ingrained in our DNA. So we know our people can execute on the proposition.

We've already invested in the U.K. in the private bank over the last 5 years and the successes they have given us the confidence that we can embark on this journey and be successful at it. So the targets we have set are really achievable. Serco 8% market share in SA. We're already at 3,000 clients. You get the next [ 7, ] it's only 5% more market share. We are very confident we can get there. Within the U.K. context, as equally said, tiny market share, but we should be able to offer high-value services; and as a consequence, do better from it.

So how does this fit into the overall perspective of a business that continues to improve its return profile? As I said earlier today, returns are an outcome. Our focus as a management team is on building capabilities, supporting our clients, being flexible around their needs. And if we do that right, the returns should follow very logically. So on the -- on this particular bridge, I've indicated that the leveraging and scaling up of our core franchises will contribute a significant portion to the returns uplift.

We already are looking -- are working on capital optimization. A shareholder or an analyst asked us why we are not a bit quicker in the share buyback, but we are on course and on program. So we're comfortable about that. And we will continue to manage our capital dynamically. If as an example, we get an opportunity to acquire a business, that means that we may have then to be flexible in how we look at capital allocation. It will be dynamic, but supporting of the overall strategic intent that I talked about yesterday.

So the South African piece of this of this strategy will contribute significantly in this time period. The U.K. piece by 2030 will just be gaining traction. So we expect that piece to contribute more significantly beyond the FY '30 horizon. We'll give you a sense of what we think the revenues will be by FY '30 from our U.K. business, but this is really exciting if you look at it long term.

As I said about this earlier, because we've tested the model in SA, and we are successful, and we've been investing in these platforms and we have the benefit of latest technology, we think our U.K. rollout will, in fact, benefit from all of those. So that's how we will be building over the next number of years. To give us a bit more of a sense of how we will do this in each of the 2 geographies. I'm now going to call the top youngsters to present, starting off with Nick Riley. Nick, you're ready? Thank you.

Okay. Let's make sure we get these slides right. Thanks, Fani. Certainly an exciting opportunity for us. It's been lots of fun getting stuck into the detail over the last 7 weeks since I stepped into the saddle. The next few slides will unpack the corporate mid-market opportunity and strategy for South Africa.

So what is this client segment? Juristic entities with a turnover between ZAR 30 million and ZAR 1.5 billion are banked by the Business and Commercial Banking divisions of the incumbents in South Africa. This client segment is extremely profitable and a high ROE segment for the banks. Whilst it's highly competitive, we think it remains ripe for disruption. There are approximately 3.5 million juristic entities in South Africa with a turnover between ZAR 0 billion and ZAR 1.5 billion. Our definition of the corporate mid-market incorporates unlisted juristic entities.

Now we're still on that slide, [ Donnie. ] All right. I'm now looking -- I'm making the same mistake you made. Look left, not right. So our definition of the corporate mid-market incorporates unlisted juristic entities with a turnover between ZAR 30 million and ZAR 1.5 billion. This takes us out of the SMME segment, which is experiencing fierce competition by the incumbents and new entrants to the market. It's a deep segment, ZAR 79 billion in revenue, ZAR 620 billion of loans and ZAR 405 billion of operational deposits. Our market share is between 0.5% and 5% in terms of these measures and presents significant opportunity for growth.

Investec believes its niche are companies with a turnover between ZAR 100 million and ZAR 1.5 billion, representing an opportunity set of about 220,000 clients. We would consider banking clients below the ZAR 100 million threshold where we foresee the ability to grow and support these clients. We're underrepresented in this growing market and are well positioned to gain market share.

We're not starting from scratch. We have 3,000 existing high-value relationship-led clients. We already offer lending, certain transactional banking capability, savings product, risk management product and advisory service to this existing client base. Historically, we've serviced these clients from different divisions within the Investec Group, limiting the full enablement of the bespoke service model that we offer. We now have one business, one leadership team with full accountability and responsibility to deliver the strategy with laser-focused execution.

We are targeting 10,000 clients by 2030. So in terms of the numbers of the client set of 220,000; 5%. The 8% Fani referred to was loan market share by 2030. So to reach our 10,000 clients, we need to acquire another 7,000. So whilst we're materially increasing our base from 3,000, the target number remains at a level which allows us to deliver the Investec bespoke service model.

Our competitor banks have between 20,000 and 50,000 clients, which makes it difficult for them to replicate the high-touch tech-enabled Investec client experience, way easier for us to create a comparable product set, way more difficult for them to compete with our service level.

The upside to this 10,000 clients is the client acquisition opportunities that reside within the bank, where either we bank the individual and not their business, which Fani has spoken to, or existing clients have told us that they want to do more with us when we've got a comparable product offering. They tell us, if you can do for me what you do for my personal, I'll move my business banking tomorrow. We see these opportunities as low-hanging fruit.

So what does a typical client look like within the existing base of 3,000? They have a turnover greater than ZAR 100 million and have either 1 or 2 products with Investec. We see this now as a significant opportunity to further cross-sell to these 3,000 clients, increasing the average product from 1 or 2 to 4. I'll illustrate what this trajectory looks like shortly in an example.

Our existing lending clients are concentrated within sectors that are working capital or asset heavy. We'll now look to broaden that sector focus as we scale, leveraging the sector specializations, intellectual property and network within our Corporate and Investment Bank.

Here's a short example of what the trajectory looks like. We first engaged this client in 2018. They're a provider of infrastructure to the ICT sector. We provided a term and trade facility of ZAR 24 million to unlock growth out of their working capital. Fast forward 7 years, they've grown their turnover by 6. We've increased our facilities by a factor of 5, and we now have 5 products across 3 juristic entities.

Investec funded the vertical integration into a transport business. We funded the acquisition of the owner-occupied property. Our current funding consists of trade, term and overdraft and access facility. And we provide transactional banking through underlying transactions, corporate credit cards and FX facilities. We've recently introduced our leveraged finance team with the opportunity to introduce a new investor. This is what that trajectory looks like. This is what we will aim to do in terms of increasing the products across that client set.

So what is the execution of the corporate mid-market strategy look like in terms of numbers? We've already got ZAR 1.7 billion across the existing client base. This is not a nascent business. The execution of the strategy is expected to more than double our revenue from ZAR 1.7 billion to ZAR 3.8 billion. Similarly, more than doubling our profit, representing compound growth between 18% to 20% over this 5-year period to 2030.

We expect to achieve this through doubling our loan books, capturing operational deposits to increase the existing base by a factor of 5 and a significant increase in capital-light transaction banking fees. Whilst the execution of the strategy will require further investment, we have the benefit that these are existing businesses with existing infrastructure and existing platforms. This additional expenditure will not impact on the Group's target cost-to-income ratio range.

So the more than doubling in profitability and naturally higher ROE from this business segment is expected to deliver meaningfully to the 200-basis point increase in the Group ROE that Fani mentioned earlier.

So where will we focus and where will our priorities be to successfully execute on the strategy? The lending, savings, risk management product and advisory services, which form a part of this product suite, as reflected in the earlier wagon wheel are all mature platforms, already servicing the existing clients -- our base of 3,000 clients. There will be further investment in transactional banking feature rollout, modernization of the tech stack, automation of client touch points, including KYC and onboarding, API-led integration over the next 12 to 18 months. These enhancements will assist with a simpler and friction-light move of clients from some of our incumbents.

The additional investment will, for the first time, enable a holistic transactional product set comparable to our competitors. It creates the opportunity to access a subset of the market that we have not been active in before. So with a level playing field in terms of product, we can now really differentiate our bespoke service model, offering corporate mid-market clients access to our world-class client support center, deep specializations and relationship-driven and empowered bankers.

So let's now bring it all together. This is a natural evolution for Investec. We're building off an established base with a history of successfully servicing selected client segments in a highly competitive market. In a segment traditionally underserved, we will, for the first time, be able to offer the full product capability with our distinctive and differentiated service. Always Human, enabled by our culture and values. The experience is effortless and professional; the expertise is specialist, value-adding and proactive; and the attitude, passionate and can do.

To win, we only need 5% market share in numbers. And within the next 5 years, this will lead to a tripling of our client base, increased entrenchment with 4 products per client, a more than doubling of profitability with a CAGR of 18% to 20% and a meaningful contribution to the 200-basis point enhancement of ROE. This new division that will be delivering on the strategy will be known as Investec Commercial Banking. Thank you. Andy, over to you.

Okay. Good morning, everyone, and good afternoon for those of you in South Africa. Fani and Nick have both spoken about the mid-market plans being a natural evolution. Nick and the team have clearly got a head start on us here in the U.K. But I've been amazed by the energy and enthusiasm that we've experienced when talking about this proposition to our clients and everyone else actually that's in the street that we get to talk about.

Lots of our existing clients are really keen to get involved as soon as possible. In fact, I was recently at a lunch with some clients I know really well, and they were pushing me seriously hard on how quickly we can get this moving so they can come and join us. In a very short space of time, we've attracted some incredibly experienced individuals from existing mid-market banks in the U.K. And we've got others that are already keen to join. And let's not forget that's in addition to the really high-quality people who have already been helping us build these franchises over time.

Everyone wants to be part of building this Corporate Banking business that has a private banking feel. We're excited and confident to grow something that's truly unique in the U.K. for the mid-market clients. And I'm going to spend a few minutes talking about the U.K. proposition more specifically, and in particular: Why we like the market? What we're focused on building? And how we're going to deliver that at pace?

I've got the slides, [ fine. ] There are around 80,000 businesses in the U.K. with a turnover of between GBP 5 million and GBP 250 million. We believe 60,000 of those play to our existing strengths and sector expertise. So that's where we're going to focus. Banking in this segment is dominated by the big 5 banks, but there's no significant differentiation between them. We're going to deliver a premium out of the ordinary alternative that simply isn't available elsewhere.

We have a distinctive brand with a great reputation. Clients already choose us due to our high service standards. And we have an exceptional client relationships and deep expertise, regularly winning awards for client experience in this mid-market. So let's look at the next slide for what we have today and what we need to build.

If you look at the green and orange dots, you'll see that we already have one of the most comprehensive and compelling propositions in the mid-market. We have the vast majority of lending products, a strong treasury and risk offering, and we're one of the few banks in the mid-market with advisory and equity teams. And of course, we have our private banking expertise. The key ingredients that we need to add are scalable transactional banking and best-in-class relationship managers who are going to pull all of this together for us. So let's look at some of the time lines and the value of what we think we can deliver.

The big banks in the U.K. make around GBP 6.5 billion of profit per annum in this space. And as Fani said, that's made at an average of about a 20% return on equity. So strategically, this is a very key driver for us for accretive growth as we move forward. Working backwards from right to left, by 2030, our ambition is to be delivering GBP 80 million to GBP 100 million worth of revenue from these 1,000 clients. Between now and then, which is the middle column, we will have a full proposition live by quarter 1, '27, a full relationship banking team in place by '28, and we expect to break even by '29.

Our current focus is on product development, relationship management and operations and technology. And on the next slide, I'm just going to give a flavor of a longer-term view because this is just the start of what we can achieve.

If you look at the left-hand side of the slide, we already have award-winning franchises in the U.K., be that the 60,000 clients we have in our asset finance businesses or the corporate client base with treasury, FX, risk solutions, direct and specialist lending. We are building relationship banking in the middle of this to enhance our existing clients' offerings and also allow RMs to confidently attract new clients. By 2032, we aim to have 40 to 50 relationship managers in the market, delivering a revenue of about GBP 175 million. That means we'll have 2,000 clients who, on average, will hold 3 to 4 products with us. And this will make a material contribution to the growth and returns of our U.K. bank.

To deliver this full-service relationship banking, we need to build scalable transactional banking, an operational platform that's intuitive and gives great client experience. And for that, we're clearly leveraging, as others have said, the good work that's taken place so far in our infrastructure. We're in the process of recruiting a market-leading relationship team to offer the whole of Investec to our clients. Our service-led approach is to provide a private banking experience in the mid-market and the differentiation will be operations and technology that allows RMs to spend their time with clients, not spending 70% of their time as many do today on admin and other queries that come through.

Relationship managers need time to understand their clients properly. We want them to have that time to listen and proactively help those clients to grow. And we want them to offer the full breadth of capability across Investec. For day-to-day client needs, our clients are going to have access to our market-leading client support center, phones answered quickly by people who will do their best to fulfill their needs there and then without further handoffs.

We're on track for putting our relationship managers, our first relationship managers into the market in quarter 1 of '27, but we may well bring that forward to H2 of '26. We're going to test our capability with a small number of pilot clients as we progress to full rollout.

So let's move on to delivery. Our approach to delivering at pace is guided by a few key principles. Product and service development will be client-led, driven by insight and testing. We will leverage lots of our existing capabilities. We will adopt the latest tools, including AI, wherever possible. And clearly, building the right team is critical. I'm just going to take a minute to talk about the team that we're building.

We're bringing in new expertise where required. And let's not forget, we've already got lots in-house, but we're bringing in people who have been there, seen it and done it in the U.K. mid-market for the activities that are going to be new for us. In a very short space of time, we've attracted some incredibly experienced individuals, and we continue to build out this team. Everyone wants to be part of building this unique Corporate Banking business that has a private banking feel. The focus, the energy and the expertise is incredible to see.

So let me just summarize. In the U.K., we believe we have a clear opportunity for Investec to differentiate in the U.K. mid-market. It's not just what we do. It's about how we do it. We create real expertise and trust, and that drives exceptional client relationships. This is a natural evolution, as everyone has said, for our U.K. bank to support the growth of mid-market clients as well as our own at accretive returns.

We already have a compelling mid-market proposition. Investment over the next 2 years will significantly enhance this [ for ] transactional banking, relationship management and a modernized digital platform. Increased client acquisition and deeper client relationships would increase our share of wallet to drive income growth and return on equity. We're now laser-focused on the execution to build this, and we have a unique proposition for our mid-market clients.

I'm now going to pass back to Fani.

Thank you, Andy. Thank you, Nick. You can see we do have some top youngsters in our team. Ruth, thank you for supporting the development of this capability in this market. The opportunity is real. The execution will require the level of focus that Andy spoke about.

So from the perspective, as I said, of the uplift in our returns, the U.K. piece is the blue sky because we haven't factored that much into our 5-year horizon as excited as we are about that opportunity. The U.K. -- sorry, the South African opportunity is "in the now" because we've been building there for some time. It's about the flywheel momentum that we are now building in that business, more than doubling in a number of the metrics that Nick spoke to.

It's important, again, to say that we've given an outlook of 52% to 54% cost-to-income ratio despite the level of investments that we are making in these new initiatives. We remain comfortable that we've been prudent before in getting some of the investments into the normal run. So while we are investing more, we are unlikely to significantly move upwards our cost-to-income ratio. And this is why this particular capability makes sense for us because it leverages not only of the DNA of the business, but also of the investments that have been made and expanding relationships that we already have with our clients.

So we conclude again by giving you this simple slide about our right to win, a private client banking experience for a select number of clients in the market and expansion and evolution of the relationships that we already have and that we have the experience to implement a growth strategy. We have the people to do this. We have the culture that can support this nimble high-touch offering to clients in the corporate market. We've got the capital and the liquidity to stand behind the efforts that we have indicated. Excited about this Zebra that is galloping forward.

In May, we'll give you a view into our private clients strategy. And if I'm excited today, I'm even now just running towards May because we would love to show you what we are doing. But the execution challenge is significant. We are not underestimating that at all, but we are a team focused on building enduring value for our clients.

So thank you. We'll take some questions.

How do we do the questions in this room first? Okay, Cue. Thank you. Any questions from the room?

Okay. No questions. We'll go to Cumesh in SA. I seem to see how this pattern is going to go. We're going to have questions from the online line. Cumesh, any questions from SA?

We're just checking Fani. [ Donovan, ] are there any questions online? Okay. There's some online. I'm just going to check the room first. Fani, are there any -- if there are any questions in the room?

No questions in the room. Donovan, can we go to the online questions?

Sure. Our first question is from Kevin Harding from Investec Investment Management. For the South African Corporate Mid-market business, what is the current cost-to-income ratio for that business? And how are costs expected to grow relative to revenue growth? The current target assumes revenue grows at about 17.5% to 2030.

Nick, do you want to -- the youngsters have to work for their lunch.

And I'm hungry. Kev, so the trajectory will be slightly different over the 5-year period. So the next 2 years, we'll complete the expenditure, as we've said, in line with the broader cost-to-income ratio, and that's new people, that's technology, systems and processes, which will then give us the platform for the full transactional banking capability. That's when we would look to ramp up on the operational deposits. So towards the end of 2030, we'd expect that cost-to-income ratio to be in the high-40s, sub-50%. As it stands now, it's in line with our existing ratios.

Thanks, Nick. Nick has run a listed company before. So I think he has, what shall we call it, the agility to field the bouncers as they come. Donnie?

Thanks, Fani. The next question is from Harry Botha from Bank of America. In South Africa, what is your sense of the number of private banking customers that can provide links to mid-market corporate clients? How sticky are clients with South African incumbents? And is there a significant customer acquisition cost as you help customers switch over to Investec systems?

I think both of the youngsters should come on the stage so that you don't have to be going up and down. Let's just give you the opportunity to excel.

Just coming up, because I've not been called a youngster for a very long time. I'm going to enjoy this moment, Fani.

Sorry, Don, could you repeat the first part of the question?

Sure. So what is your sense of the number of private banking customers that can provide links to mid-market corporate clients?

So the work that we've done, it's between 1,500 and 2,000 that the -- we think there's the opportunity to bring across private clients that we bank in their personal capacity in terms of their businesses. And that's what we referenced as the low-hanging fruit.

I think the second part -- what's the acquisition cost? I think if I understood correctly in terms of bringing across clients from the incumbents. Look, I don't think we underestimate that there's going to be a flush of clients. We understand that some of these clients have been banking with the incumbents for 20 to 30 years. But I think now that we have the full product offering, I think the proof is in the pudding that we've already got 3,000 clients. So we've got clients internally and externally at the group that are investing in banking with us based on that capability. We understand that potentially it could take 3 to 4 years product by product to be able to unhook some of the clients from the incumbents.

Around acquisition costs, we don't see that elevating again above our cost-to-income ratio. So we'll manage it within the group's targets.

Donnie?

Thank you. One last comment online from Nathan Jeffery from Brown Jeffery Ventures. He says, it is very good to see a shift to commercial in the U.K., and he seems pretty pleased by that.

Thank you. That is fantastic.

Someone else is excited by it.

I was just about to say, Donnie, why are you taking comments? I thought you were giving us questions. But that comment we will take any day. That brings us to the end of our presentation. It's now back to work. Thank you very much.

Good day, ladies and gentlemen, and welcome to the Investec Pre-Close Conference Call. [Operator Instructions] Please note that this event is being recorded.

I will now hand you over to Mr. Fani Titi. Please go ahead sir.

Thank you, Judith, and good morning, all. Thank you for joining us for our pre-close trading update. This update reflects the financial performance for the 5 months ended 31 August 2025, and the expected results for the 6 months to 30 September 2025. I'm joined this morning by Nishlan Samujh, our Group Finance Director; Ruth Leas, the Chief Executive of our U.K. business; and Cumesh Moodliar, the Chief Executive of our South African business.

The group's results for the first half of the financial year is expected to be in line with the prior period. Our solid performance and strong capital generation has enabled us to continue supporting our clients, accelerate investment in identified growth initiatives and navigate the uncertain environment.

The group continued to make progress on our strategic objectives in a challenging macroeconomic backdrop. We are on track with our strategy to build scale, leverage existing client franchises and execute plans to enhance our proposition. As part of ongoing capital management, the group commenced the share buyback program announced in May this year, repurchasing approximately ZAR 1.1 billion or circa GBP 46 million to date.

Turning to performance for the 5 months ended 31 August 2025. Revenue was supported by increased client activity levels, higher average advances as well as net inflows in our Wealth business. This was counterbalanced by the negative impact of lower average interest rates and reduced earnings from the group investment portfolio. Fixed operating expenditure reflected continued and accelerated investment in people and technology for strategic growth as well as inflationary pressures.

Looking at the underlying drivers for our core client franchises, net core loans from our banking businesses increased by 4.7% annualized to GBP 33 billion, driven by growth across the corporate lending books as well as private client lending in both geographies. Customer deposits decreased by 1.9% annualized to GBP 40.8 billion. The decrease is primarily driven by the continuation of our strategy to optimize our liability mix in South Africa, where non-wholesale deposit growth was 8.5% annualized, while wholesale deposits declined by 12.8% annualized.

Funds under management in our Southern African Wealth & Investment business increased by 7.8% to GBP 25.2 billion. We saw strong inflows in discretionary funds, which were partly offset by outflows in nondiscretionary funds. For the 6 months ending 30 September 2025, we expect to report the following: adjusted earnings per share to be between 2% behind to circa 5% ahead of the prior period. Cost-to-income ratio to be between 52% and 54%. Pre-provision adjusted operating profit to be circa 6% behind to flat relative to the prior period. Credit loss ratio to be within the through-the-cycle range of 25 to 45 basis points.

Overall credit quality remains strong. Group ROE to be between 13% and 14% within the group's medium-term target range of 13% to 17%. Group return on tangible equity to be between 15% and 16%, within the 14% to 18% medium-term range. The group has robust capital and liquidity levels to manage the impact of external challenges and deliver on a clear and executable strategy to enhance long-term shareholder value.

I will now turn the call over to questions.

[Operator Instructions] Our first question comes from Baron Nkomo of JPMorgan.

Two questions. In the U.K. credit losses, so U.K. business is expected to report a credit loss ratio at the upper end of the guided range. Just wondering if you can give us some color on what factors are driving this and what steps are being taken to manage credit risk in the U.K. And then lastly, can you give more color on the reduced profit contribution from group investments in SA?

Thank you, Baron. As indicated, we do expect the overall credit loss ratio for the group to be inside the 25 to 45 bps through-the-cycle range. So we're quite comfortable with where the credit experience is. As indicated, the SA credit loss ratio continues to be fairly moderate given the nature of the business there. And given where we are in the cycle in the U.K., as we did in May, we had indicated that we will be at the higher end of that range for our business, which is a corporate mid-market business on the private banking side. As you know that credit loss ratio is quite low over a long period of time. But I'm going to ask to Ruth Leas to give us a bit of color on what we're seeing on the ground. And then I'll ask Nishlan to just cover the group investment question.

In line with what we guided at the full year, the expected credit loss ratio should be around the upper end, as you've mentioned. There really isn't anything new to report here. This continues to be idiosyncratic events unrelated to any trends. Interest rates are still relatively high. And as they moderate further and come down further, we expect the credit loss ratio to moderate also. So nothing really new to report. And the overall credit quality of the book remains very strong.

And coming to your second question, last year, we did experience higher valuations, particularly from some of the listed stock within the group investment portfolio, and that hasn't repeated in this period at those levels. So all in all, the reduction is as a result of the fact that markets haven't climbed as much as they did in the prior period for those particular stocks.

Our next question comes from Alex Bowers of Berenberg.

I just had a question on sort of your H1 ROE versus, I guess, the kind of guidance you've given for the full year. So it looks like in South Africa kind of 18.5% is pretty much what you said it would be for the full year. On the U.K. side, it's slightly lower. Could you just unpack that for us a little bit and kind of give a view into expectation into H2 as to what kind of increased profitability may come from?

Alex, thanks for your question. As indicated, we have given you a sense of where we think H1 will come out generally in line with the performance of the prior year. We continue to see the underlying drivers move in the right direction. I think we will try to give you a lot more color when we report in November. And at that time, we will give you a better sense and a feel for how we think the whole year will turn out. But we still see a performance that is in line with our expectations, and we will give you more color in November, and give you specific guidance for the rest of the year.

Our next question comes from Stephan Potgieter of UBS.

Just a follow-up on the first half performance versus the full year in terms of -- you mentioned you'll provide more guidance, but it looks like a slightly weak start to the year in terms of your ROE guidance for the full year to achieve that. If you could comment on that.

Nishlan, do you want a take on that?

Yes, Stephan, I think at the end of the day, it's a fairly short period into this particular financial year, and there's still a fair amount of time to go through. I think we are quite pleased with the overall momentum of the business, particularly in terms of our asset gathering processes, AUM growth. And at the end of the day, we had indicated that as we focus on our strategic initiatives, we will operate within a cost-to-income range. And in this period, I think costs are slightly higher than revenue.

And in November, we should be able to give you much more firmer guidance for the full year itself. But I'll reiterate that very much in terms of expectation. In the short term, as we've been flagging, the impact of lower interest rates is in the system. But at the end of the day, I think -- again, we're quite pleased with the momentum that we've seen in growth in fees across the businesses and, all things equal, that momentum should continue.

[Operator Instructions] Our next question comes from Chris Steward of Ninety One.

Just 2 quick questions from me. One is, it does seem as though there has been some margin pressure within the U.K. Specialist Bank in particular. Maybe you can just unpack the outlook for margins given, I guess, that rate cuts perhaps haven't been coming through as fast as anticipated in the U.K.

And then the financial performance of the SA Wealth & Investment business has kind of implicitly been lumped together with the group investments business in the sort of guidance for SA in total. Maybe you can just unpack a little bit, provide a little bit of guidance or shine a little bit of light on the financial performance of the SA Wealth & Investment business, please.

Okay. Thank you. Ruth, do you want to talk to our U.K. margin experience and give a bit more color?

Sure. Chris, thanks for the question. When we spoke around the full year, we spoke about the impact of reducing interest rates. And as one usually expects as rates reduce, net interest income can also reduce. What we have seen to counterbalance that, though, is very encouraging signs of activity in terms of growth in client acquisition and increased loan growth through the period. Our fees have actually come through very strongly over this period and is also serving to counterbalance movements in NII.

So we do see that the reductions in interest rates that have occurred so far are starting to feed through to higher levels of activity, but certainly not at full flow, and we look forward to further interest rate cuts to boost that even further. So overall, a neutral picture with seeing both sides of net interest income and increasing fee income, but certainly very promising signs of deal flow in more recent months.

Chris, I think -- thanks for the point on the fact that when we unpacked the first paragraphs on South Africa, I think, we haven't really specified well. But on to the second page, you note that we indicate that annuity fees have had good growth in the Wealth business. And you see that with the strong growth in particularly discretionary AUM with net inflows of ZAR 9.3 billion in the current period. So we're quite pleased with the performance of the Wealth business, and it remains robust.

Ladies and gentlemen, with no further questions in the question queue, I will now hand back for closing remarks.

Thank you, Judith. Again, ladies and gentlemen, thank you for your time this morning. I'm sure you will have further questions that you may want to pose to us. So please don't hesitate to be in touch with our team. Again, thank you.

Thank you, sir. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.