2138007Z3U5GWDN3MY22-2024-03-31-T01

Focus on helping our clients create and preserve wealth

A highly valued partner and adviser to our clients

High net worth (HNW) private clients

Corporate, private, intermediary, government and
institutional clients

One Investec

Our purpose is to create enduring worth.



	Our mission			Investec is a distinctive bank and wealth manager, driven by commitment to our purpose, values, core philosophies and culture. We deliver exceptional service to our clients in the areas of banking and wealth management, striving to create long-term value for all of our stakeholders and contributing meaningfully to our people, communities and the planet.

	Our distinction			The Investec distinction is embodied in our entrepreneurial culture, supported by a strong risk management discipline, client-centric approach and an ability to be nimble, flexible and innovative. We do not seek to be all things to all people. Our aim is to build well defined, value-adding businesses focused on serving the needs of select market niches where we can compete effectively and build scale and relevance. Our unique positioning is reflected in our iconic brand, our high-touch and high-tech approach and our positive contribution to society, macro-economic stability and the environment. Ours is a culture that values purposeful thinking and stimulates extraordinary performance. We take pride in the strength of our leadership team and our people are empowered and committed to our values and culture.

	Our philosophies			Single organisation
	Our philosophies			Meritocracy
				Focused businesses
				Differentiated, yet integrated
				Material employee ownership
				Creating an environment that stimulates extraordinary performance

	Our values			Deep client partnerships, built on trust and out-of-the-ordinary service, are the bedrock of our business
				We are dedicated to building meaningful relationships with all our stakeholders
				We uphold cast-iron integrity in all we do
				We are committed to living in society, not off it
				We embrace our responsibility to the environment
				We thrive on change and challenge convention with courage, constantly adapting to an ever-changing world
				We believe in open and honest dialogue to test decisions, seek consensus and accept responsibility
				We trust our people to exercise their judgement, promoting entrepreneurial flair and freedom to operate within the context of prudent risk parameters and unwavering adherence to our values
				We embrace diversity in a deeply caring organisation in which everyone can bring their whole selves



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

OUR BUSINESS AT A GLANCE

Investec plc , which houses our non-Southern African businesses, has been listed

on the London Stock Exchange since 2002 with a secondary listing on the

Johannesburg Stock Exchange Limited (JSE) and A2X in South Africa.

All references in this report to the Group relate to Investec plc, whereas references to Investec, Investec Group or DLC relate to the

combined DLC Group comprising Investec plc and Investec Limited.


	A circular on the establishment of our DLC structure was issued on 20 June 2002 and is available on our website.

How we are structured




	Non-Southern African operations				Southern African operations


	Investec plc				Investec Limited





	LSE primary listing				JSE primary listing
	JSE secondary listing				BSE secondary listing
	A2X secondary listing				NSX secondary listing
					A2X secondary listing

Investec Bank plc

Investec

Bank

Limited

Investec

Wealth &

Investment

International

Group

41.25% economic interest

Rathbones Group plc*

All shareholdings in the ordinary share capital of the subsidiaries shown are 100%.

Salient features of the DLC structure

• Investec plc and Investec Limited are separate legal entities and listings, but are bound together by contractual agreements

and mechanisms

• Investec operates as if it is a single unified economic enterprise

• Shareholders have common economic and voting interests as if Investec plc and Investec Limited were a single company

• Creditors, however, are ring-fenced to either Investec plc or Investec Limited as there are no cross-guarantees between

the companies.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

OVERVIEW OF THE INVESTEC GROUP'S AND INVESTEC PLC'S ORGANISATIONAL STRUCTURE

We provide our clients with an extensive depth and breadth of product and services in the corporate mid market,

bespoke solutions to high net worth clients and access to a wealth management offering through our strategic

partnership with Rathbones. We leverage our connected client ecosystem to deliver an exceptional client service

with an entrepreneurial approach.

Specialist Banking

Our teams are well positioned to provide solutions to meet

private, corporate and institutional clients' needs. Each business

provides specialised products and services to defined target

markets.

What makes us distinct?

• Provision of high-touch personalised service, with the ability

to execute quickly

• Ability to leverage international, cross-border platforms

• Well positioned to capture opportunities between the

developed and the emerging world

• Strong ability to originate, manufacture and distribute

• Balanced business model with good business depth

and breadth

• Provision of high-quality solutions to corporate and private

clients, with leading positions in select areas.



	Private client banking activities					Corporate and investment banking activities



	• Lending • Private capital • Transactional banking • Savings • Foreign exchange.					• Lending • Treasury and risk management solutions • Advisory • Institutional research, sales and trading.


	UK Channel Islands					UK and Europe Channel Islands USA India
	UK Channel Islands					UK and Europe Channel Islands USA India


	Our high-touch and high-tech private client offering provides transactional banking, lending, private capital, savings and foreign exchange tailored to suit our clients’ needs. Our target market includes HNW active wealth creators (with >£300 000 annual income and >£3mn net asset value). Our savings offering targets primarily UK retail savers.					Our client-centric, solution-driven offering provides Corporate Banking and Investment Banking services to private companies, private equity and sponsor-backed companies and publicly listed companies.


	Natural linkages between the private client and corporate business



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

OVERVIEW OF THE ACTIVITIES OF INVESTEC PLC

In April 2023, the Boards and Management of Investec Group and Rathbones Group plc (“Rathbones”) announced a

definitive agreement regarding an all-share combination of Investec Wealth & Investment Limited (“IW&I UK”) and Rathbones

(the “Combination”). The Combination brought together two trusted and prestigious UK wealth management businesses with

closely aligned cultures and operating models.

The IW&I UK and Rathbones combination creates the UK’s leading discretionary wealth manager with c.£107.6 billion in funds

under management and administration (“FUMA”), delivering the scale that will underpin future growth.

The announcement on 21 September 2023 marked the completion of the combination and the beginning of an exciting

long-term strategic partnership between Investec and Rathbones, with a coordinated banking and wealth management

offering for clients.




	Overview of the transaction


Under the terms of the Combination, Rathbones has now issued to Investec Bank plc as consideration:		i.	27,056,463 ordinary voting shares representing 29.9% of the Rathbones enlarged ordinary voting share capital; and
		ii.	17,481,868 convertible non-voting ordinary shares,

		such that Investec Group now has an economic interest of 41.25% in Rathbones’ enlarged share capital.


	Strategic review and rationale
	Strategic review and rationale
	1
			Created the UK’s leading discretionary wealth manager
			— Scale and operating efficiencies to power future growth — Enhanced client and employee proposition — Increased investment in capability and technology
	2
	2		Reaffirmed Investec Group’s commitment to the strategically attractive UK wealth management sector
	3
	3		Creates sustainable value for Investec Group’s shareholders
	4
	4		Increases earnings contribution from capital light activities in the medium term




	Further considerations
Accounting implications
Accounting implications

The IW&I UK transaction included Investec Group’s wealth and investment businesses in the UK and Channel Islands but excludes

Investec Bank (Switzerland) AG (“IBSAG”) and Investec Wealth & Investment International (Pty) Ltd (“Investec W&I SA”). Both IBSAG

and Investec W&I SA remain wholly-owned subsidiaries of the Investec Group.

IW&I UK was previously 100% consolidated. Going forward the Group's investment in Rathbones is now equity accounted and

recognised as an associate.

In accordance with IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations), the Group’s interest in IW&I UK up to

the date of combination has been presented as a discontinued operation and the income statements for the prior periods have

been appropriately re-presented. Refer to page 68 for discontinued operations.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

SUMMARY OF IW&I UK AND RATHBONES ALL-SHARE COMBINATION

Investec plc structure pre-combination

Investec plc

Specialist banking

Wealth and Investment UK

Investec plc structure post combination

Investec plc

41.25%

economic interest

Rathbones Group plc

Specialist banking

29.9% voting rights

and two board seats



	Governance and management

Following completion, and as described in the combined prospectus and circular published on 1 June 2023, Investec Group is

entitled to appoint two Non-Executive Directors onto the Rathbones Board. Investec Group has nominated Ruth Leas (CEO of

Investec Bank plc) and Henrietta Baldock (Non-Executive Director of the Investec Group), and consequently their respective

appointments have now taken effect.





	The combination of Investec W&I UK and Rathbones brings together two businesses which have a long-standing heritage in UK wealth management and closely aligned cultures. The strategic fit of the two businesses is compelling with complementary strengths and capabilities to enhance the overall proposition for clients. This will be supported by the strategic partnership which offers attractive growth and collaboration opportunities for both groups. The transaction represents a real step-change and long-term opportunity for our UK wealth strategy, underscores our commitment to the UK wealth management market and enhances our UK business as a whole .



	Fani Titi
	Investec Group Chief Executive



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

SUMMARY OF IW&I UK AND RATHBONES ALL-SHARE COMBINATION


	31 March 2024	31 March 2023*	% change
Income statement and selected returns on a pro-forma basis
Earnings attributable to ordinary shareholders (£’000)	706 210	293 131	>100.0%
Adjusted operating profit (£’000)^^	462 268	369 974	24.9%
Operating costs (£’000)	656 599	598 966	9.6%
Cost to income ratio^^	54.5%	57.8%
Return on average assets*	2.43%	1.04%
Return on average risk weighted assets*	3.91%	1.69%
Net interest income as a % of operating income	67.2%	69.0%
Non-interest income as a % of operating income	32.8%	31.0%
Annuity income as a % of total operating income	68.7%	71.1%

	31 March 2024	31 March 2023*	% change
Balance sheet
Total assets (£’million)	30 061	28 386	5.9%
Net core loans (£’million)	16 557	15 563	6.4%
Cash and near cash balances (£’million)	9 652	8 550	12.9%
Customer accounts (deposits) (£’million)	20 791	19 122	8.7%
Funds under management (£’million)	2 130	42 422	(95.0%)
Gearing ratio (total assets to equity)	8.7x	10.4x
Level 3 (fair value assets) as a % of total assets	8.2%	6.5%
Core loans to equity ratio	4.8x	5.7x
Loans and advances to customers as a % of customer deposits	79.7%	81.4%
Credit loss ratio	0.58%	0.37%
Stage 3 exposures as a % of gross core loans subject to ECL	3.3%	2.3%
Stage 3 exposures net of ECL as a % of net core loans subject to ECL	2.6%	1.8%

Other regulatory ratios
LCR	453%	383%
NSFR	146%	147%

Capital and leverage ratios ^
Total Capital ratio	18.4%	17.2%
Tier 1 ratio	14.6%	13.1%
Common Equity Tier 1 ratio	12.1%	11.7%
Leverage ratio	10.0%	9.2%

*Average balances are calculated on a straight-line average

^The capital and leverage ratios are calculated applying the IFRS 9 transitional arrangements.

^^Presented on a pro-forma basis. See page 216 for calculation.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

SALIENT FEATURES

Pro-forma income statements

Given the nature of the IW&I UK transaction, Investec plc’s economic interest remained similar before and after the transaction. To

provide information that will be more comparable to the future presentation of returns from Investec plc’s interest in this entity and

given the new holding structures, pro-forma information has been prepared as if the transaction had been in effect from the

beginning of the period, i.e. IW&I UK has been presented as an equity accounted investment.


£’000	Year to 31 March 2024	Re-presentation of Investec Wealth & Investment Limited	Year to 31 March 2024 Pro-forma
Interest income	1 914 473	—	1 914 473
Interest expense	(1 103 546)	—	(1 103 546)
Net interest income	810 927	—	810 927
Fee and commission income	173 213	—	173 213
Fee and commission expense	(16 451)	—	(16 451)
Investment income	14 322	—	14 322
Share of post-taxation profit of associates and joint venture holdings	55 793	35 855	91 648
Trading income/(loss) arising from
– customer flow	103 158	—	103 158
– balance sheet management and other trading activities	27 099	—	27 099
Other operating income	2 150	—	2 150
Operating income	1 170 211	35 855	1 206 066
Expected credit loss impairment charges	(85 995)	—	(85 995)
Operating income after expected credit loss impairment charges	1 084 216	35 855	1 120 071
Operating costs	(656 599)	—	(656 599)
Operating profit before goodwill, acquired intangibles and strategic actions	427 617	35 855	463 472
Impairment of goodwill	—	—	—
Amortisation of acquired intangibles	(940)	—	(940)
Amortisation of acquired intangibles of associate	(5 679)	—	(5 679)
Closure and rundown of the Hong Kong direct investments business	(784)	—	(784)
Operating profit	420 214	35 855	456 069
Financial impact of strategic actions	(16 576)	—	(16 576)
Profit before taxation	403 638	35 855	439 493
Taxation on operating profit before goodwill, acquired intangibles and strategic actions	(86 502)	—	(86 502)
Taxation on goodwill, acquired intangibles and strategic actions	727	—	727
Profit after taxation from continuing operations	317 863	35 855	353 718
Profit after taxation from discontinued operations*	389 551	(35 855)	353 696
Profit after taxation	707 414	—	707 414
Profit attributable to other non-controlling interests	(1 204)	—	(1 204)
Earnings attributable to shareholders	706 210	—	706 210

Cost to income ratio	56.2%		54.5%

* Refer to note 34 for discontinued operations disclosure.

Note: No adjustments have been made to the balance sheet for the purposes of our pro-forma disclosures.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

PRO FORMA


	Year to	Re-presentation of	Year to
	31 March 2023	Investec Wealth &	31 March 2023
£’000	as previously reported	Investment Limited	restated
Interest income	1 215 245		1 215 245
Interest expense	(501 025)		(501 025)
Net interest income	714 220		714 220
Fee and commission income	131 795		131 795
Fee and commission expense	(15 442)		(15 442)
Investment income	18 223		18 223
Share of post-taxation profit of associates and joint venture holdings	4 950	74 567	79 517
Trading income/(loss) arising from			—
– customer flow	87 366		87 366
– balance sheet management and other trading activities	13 134		13 134
Other operating income	6 879		6 879
Operating income	961 125	74 567	1 035 692
Expected credit loss impairment charges	(66 752)		(66 752)
Operating income after expected credit loss impairment charges	894 373	74 567	968 940
Operating costs	(598 966)		(598 966)
Operating profit before goodwill, acquired intangibles and strategic actions	295 407	74 567	369 974
Impairment of goodwill	(805)		(805)
Amortisation of acquired intangibles	—		—
Closure and rundown of the Hong Kong direct investments business	(480)		(480)
Operating profit	294 122	74 567	368 689
Financial impact of strategic actions	(402)		(402)
Profit before taxation	293 720	74 567	368 287
Taxation on operating profit before goodwill, acquired intangibles and strategic actions	(59 623)		(59 623)
Taxation on goodwill, acquired intangibles and strategic actions	—		—
Profit after taxation from continuing operations	234 097	74 567	308 664
Profit after taxation from discontinued operations*	59 034	(74 567)	(15 533)
Profit after taxation	293 131	—	293 131
Profit attributable to other non-controlling interests	—		—
Earnings attributable to shareholders	293 131	—	293 131

Cost to income ratio	62.3%		57.8%

* Refer to note 34 for discontinued operations disclosure.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

PRO FORMA CONTINUED

Climate-

disclosures

Our climate-related

disclosures as at the end

of 31 March 2024 are in

accordance with sections

414CA and 414CB of the

Companies Act 2006

which outline requirements

for non-financial reporting.

The table on page 13 to 25

is intended to provide our

stakeholders with the

content they need to

understand our

development,

performance, position and

the impact of our activities

with regards to non-

financial and sustainability

matters. Further

information on these

matters is included within

the nonfinancial reporting

section in the 2024 Group

sustainability report on our

website.

We believe that our widest and most

positive influence is realised when our

businesses use their specialist skills in

advisory, lending and investing to support

our clients and stakeholders to move

as quickly and smoothly as possible

towards a zero-carbon economy.



	01		Maintaining carbon neutral status within our global operations


	Highlights
	• We are incorporating environmental values into our culture and decision making • We have maintained carbon neutral status for the sixth consecutive year • We have procured 100% global electricity from renewable sources using green tariffs and renewable electricity certificates where feasible • We have committed to net-zero in our Scope 3 financed emissions by 2050.



	03		Managing and steering our portfolios towards a net-zero world


	Highlights
	• We have committed to zero thermal coal exposures in our loan book by 31 March 2030 • We are monitoring and managing our exposures to fossil fuels and other high-emitting sectors • We have made significant progress in improving the data quality and processes for our Scope 3 financed emissions. This involved implementing rigorous data collection processes to ensure that the data we use is accurate, reliable, and up-to-date • We have dedicated significant resources to automate the financed emissions calculations using the PCAF methodology which improved alignment across our jurisdictions and improved the consistency of applied methodologies



	02		Financing a resilient economy and partnering with our clients


	Highlights
	• We introduced an enhanced Sustainable and Transition Finance Classification Framework to guide our decision-making processes as we actively pursue our 2050 net- zero ambition • We are developing and rigorously testing targets to be released by the end of March 2025. These targets will be integrated with executive KPIs, ensuring that leaders are held accountable for achieving our sustainability ambitions. • We have established a Sustainable Business Forum in the UK and South Africa that develop and integrate sustainability strategies into our business processes, commercial plays, and incentive frameworks, addressing our own aspirations as well as the expectations of our stakeholders.



	04		Continuing our participation in advocacy and collaboration
			Continuing our participation in advocacy and collaboration

	Highlights
	• Our commitment to sustainability is evident from the many organisations with whom we engage and support • Active collaboration and participation in sustainable initiatives can direct capital towards environmentally and socially responsible projects • Actively working with regulators allows us to stay informed around regulatory changes and ensure compliance with evolving sustainability frameworks. Furthermore, participation and engagement can help shape policies and standards that promote sustainability within the industry.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES

Climate-related disclosures overview

The following complies with the Companies (Strategic Report) (Climate-related Financial Disclosures) Regulations 2022.

Additionally, we have prepared a comprehensive Climate Report that provides a more detailed and tailored perspective for our

stakeholders, as required by the Financial Conduct Authority (FCA) Listing Rule 9.8.6R(8). The information provided, along with our

extensive Climate Report available on our website, demonstrates our recognition and alignment with the Task Force on Climate-

related Financial Disclosures (TCFD) guidelines. These disclosures outline how we integrate climate-related risks and opportunities

into our governance, strategy, risk management, metrics, targets, and our approach to meeting stakeholder expectations.

Investec publicly committed to support the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD)

recommendations in 2019 and we released our first stand-alone TCFD report in 2019. During the year ended 31 March 2024, we

have made progress in improving the data quality and processes for our financed emissions. In addition, we dedicated significant

resources to automate the financed emissions calculations using the PCAF methodology which improved alignment across our

jurisdictions and improved the consistency of applied methodologies.

Please refer to the Investec Group’s 2024 climate and nature-related financial disclosures report for further detail.


Governance
The Board’s oversight of climate and nature-related risks and opportunities
Reporting requirements: Climate-related financial disclosures: CFD-a. TCFD: G-a
Board
Responsibility At the highest governance level, the DLC Board establishes the purpose of the Group, incorporates sustainability, climate and nature-related matters when reviewing and guiding strategy and strategic objectives, and monitors progress against sustainability-related targets and ambitions. Furthermore, they track the progress of goals and targets, including overseeing major capital expenditures, acquisitions, and divestitures. In addition, the Board is responsible for overseeing Investec's response to climate change and the prevention of nature loss. They receive support from Group executive forums and management teams in managing climate and nature-related risks and identifying opportunities.
Board meetings The composition of the Board has been designed to ensure that we have the appropriate mix of knowledge, skills, experience, independence and diversity. The Board considers the collective skills and experience, knowledge and experience of the directors when assessing the overall composition and suitability of the Board. In addition to a range of skills, the Board also values the innate difference in approach and thinking styles, which results from the varied backgrounds and experiences of our directors.The skills and experience of the members of the Board are detailed on page 159 of the Investec Group’s 2024 integrated and strategic annual report. All members have a strong awareness of climate-related and sustainability matters. The Board met six times during which climate-related and sustainability matters were presented. 86% of the Board members have sustainability-related experience.
Information and escalation channels The DLC SEC Chair reports to the Board after each meeting on the nature and content of its discussions, recommendations, and action to be taken, and makes recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed. In addition, climate-related and sustainability risk matters are escalated to the Board through the DLC BRCC and the Group ESG Executive Committee, with documented feedback provided at every meeting.
Monitoring and oversight Our climate-related goals and targets are set at an operational level with the overarching commitment to remain carbon neutral within our operations (Scope 1 and 2 and operational Scope 3). This has resulted in us being carbon neutral for the sixth consecutive year. Additionally, the Board has provided oversight for our enhanced climate impact roadmap, which outlines our strategy for sustainable finance and our pathway to achieving net zero carbon emissions by 2050. We will establish sustainable finance targets by the end of March 2025 that will be overseen by the Board. The Board has received regular updates throughout the financial year, both written and verbal.
Key achievements for the year ending FY2024 • The concept of double materiality – in which we understand the impacts of climate change and biodiversity loss on our business, and the impact of our activities on the natural environment/biodiversity and climate change has been a key focus for the Board • The Board approved the enhanced Sustainable and Transition Finance Classification framework • The Board noted the emerging sustainability disclosure regulations, specifically the ISSBs IFRS S1 and IFRS S2 recommendations, the recommendations published by the Prudential Authority and the CSRD • The Board was upskilled in climate-related matters, specifically in sustainable and transition finance as a result of our enhanced Sustainable and Transition Finance Classification Framework.
Focus areas for the year ending FY2025 • Oversee progress of establishing sustainable finance targets for the Group • Monitor sustainable and transition finance initiatives across the Group • Oversee the developments regarding the inclusion of additional asset classes in the calculations of our Scope 3 financed emissions • Further enhancements of skills in climate and sustainability-related matters.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Governance continued
The Board’s oversight of climate and nature-related risks and opportunities continued
Reporting requirements: Climate-related financial disclosures: CFD-a. TCFD: G-a continued
DLC Social and Ethics Committee (DLC SEC)
Responsibility The DLC SEC is a Board-appointed committee with a direct reporting line to the DLC Board. The DLC SEC has accountability for monitoring the non-financial elements of sustainability and monitors the Group’s performance in terms of sustainability, climate and nature-related matters. Furthermore, it is accountable for monitoring the Group’s activities with regard to any relevant legislation, other legal requirements, or prevailing codes of best practice. The responsibilities of the DLC SEC is documented on page 101 of the 2024 Group risk and governance report.
Committee meetings The DLC SEC consists of four independent Non-Executive Directors and the Group Chief Executive. The Committee met four times during the year ended 31 March 2024 where climate and sustainability-related matters were discussed at every meeting. The committee is confident that they have a strong and diverse team of directors who will continue to oversee oversee the sustainability of the Group’s business and the interests of the Group’s stakeholders.
Information and escalation channels The DLC SEC receives feedback on the latest climate and nature-related matters through a standing agenda item. The Chief Strategy and Sustainability Officer escalates any sustainability-related matters raised by the Group ESG Executive Forum either verbally or in written format to the DLC SEC. During FY2024, the DLC SEC climate-related discussion points for the Group included: • An update on the business initiatives designed to support our clients in their participation in the transition to net zero by 2050 • A discussion on our enhanced Sustainable and Transition Finance Classification Framework and the linkage of a sustainable finance target to executive remuneration.
Monitoring and oversight The DLC SEC monitors and oversees progress against climate and sustainability-related goals and targets through ongoing communication to the Committee through a standing agenda item. Key points that are overseen and monitored include: • Sustainability strategy, framework and policies • Alternatives to link sustainability-related metrics and KPIs to Executive Directors’ compensation • Scope 3 financed emissions • ESG transactions that are deemed of high concern • ESG ratings and rankings.
Key achievements for the year ending FY2024 • A review of our progress following the commitment made to achieving net-zero carbon emissions by 2050 and processes to enhance our Scope 3 financed emissions calculations with refined assumptions and systems automation • Approved the enhanced Sustainable and Transition Finance Classification Framework • Noted our reporting readiness with the increased sustainability reporting developments internationally • Acknowledgement of the outcomes of the double materiality assessment disclosed in the Investec Group's 2024 integrated and strategic annual report.
Focus areas for the year ending FY2025 • Contribute to the setting of a sustainable finance target for the Group • Monitor the response to the double materiality assessment completed in 2024 • Monitor the progress in managing the Group’s Scope 3 emissions from our lending and investing activities.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Governance continued
The Board’s oversight of climate and nature-related risks and opportunities continued
Reporting requirements: Climate-related financial disclosures: CFD-a. TCFD: G-a continued
DLC Board Risk and Capital Committee (DLC BRCC)
Responsibility The role of the Committee is to provide independent challenge and oversight of the Group’s risk and capital frameworks, management and governance structures. They ensure that effective risk and capital frameworks, plans, policies, processes and systems are in place to ensure current and emerging risks are adequately assessed and appropriately addressed within a reasonable timeframe. The DLC BRCC oversees and signs off on the Group’s risk management policies. The Committee is also responsible for managing the principal risks of the Group, of which climate-related risk is explicitly listed.
Committee meetings The Committee comprises Executive and Non-Executive members, with the composition designed to provide the breadth of risk expertise and commercial acumen to fulfil their responsibilities. All members have a strong awareness of climate and sustainability-related matters. The Committee met five times during the financial year ended 31 March 2024 where members were informed of climate and sustainability-related matters on an ad-hoc basis.
Information and escalation channels The DLC BRCC receives feedback through Committee meetings and interactions with the Group Chief Risk Officer, the IBP Chief Risk Officer, the IBL Chief Risk Officer (who are all members of the DLC ESG Executive Committee) and Heads of Risk of the various subsidiaries. Furthermore, the DLC BRCC receives feedback from the IBL BRCC and IBP BRCC where the risks of the banks are addressed, which includes risks relating to sustainability-related matters.
Monitoring and oversight The Group’s exposure to fossil fuels was considered. The Committee was kept updated on the improvement actions being taken from a sustainability and climate risk perspective. These included assessing core loans and advances as well as reviewing the risk classifications per the International Finance Corporation (IFC) guidelines. The Committee received confirmation from management that credit decisions considered financial risks from climate change and that these decisions were being documented.
Key achievements for the year ending FY2024 The DLC SEC and the Committee reviewed all the ESG related policies. The Group also conducted a double materiality assessment the findings of which are included in the Investec Group's 2024 integrated and strategic annual report.
Focus areas for the year ending FY2025 • Stronger focus on climate, nature and energy security • Monitored the increased reporting requirements from stakeholders, monitored our fossil fuel exposures and our exposure to high-emitting industries • Increase engagement on climate and nature-related goals and targets • Regular feedback from the various sustainability committees on climate and nature-related goals and targets • Development and upskilling of DLC BRCC members on climate and nature-related matters.
DLC Audit Committee
Responsibility The role of the Committee is to consider the appropriateness of financial and non-financial disclosures and provide oversight on compliance to climate-related reporting regulations. The Committee also considers the level of assurance provided by external audit on sustainability and climate disclosures made in the annual report.
Committee meetings The Audit Committee met eleven times during the financial year ended 31 March 2024, where regulations, specifically the BIS Pillar 3 requirements and the ISSB’s disclosure guidance on IFRS S1 and IFRS S2, were discussed at some of these meetings.
Information and escalation channels The Committee receives regular updates from Group Sustainability, Group Finance and from External Audit on the latest regulatory and disclosure requirements. Significant judgments and estimates were discussed, including the inherent risks posed by climate-related matters.
Key achievements for the year ending FY2024 The DLC Audit Committee reviewed the assurance provided for KPIs relating to: • Fossil fuel exposure • Carbon footprint • Limited assurance on the mortgage asset class with regards to Scope 3 financed emissions • Appropriateness and completeness of the sustainability and climate disclosures provided in the Investec Group’s 2024 integrated and strategic annual report.
Focus areas for the year ending FY2025 Development and upskilling of members on climate and nature-related matters. The implications of sustainability-related risks in measuring the sustainability and societal impact of an investment in a company or business, together with sustainability-related accounting disclosures and assurance processes.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Governance continued
The Board’s oversight of climate and nature-related risks and opportunities continued
Reporting requirements: Climate-related financial disclosures: CFD-a. TCFD: G-a continued
DLC Remuneration (REM) Committee
Responsibility The DLC REM Committee establishes performance-related targets in respect of sustainability measures, which incorporate climate-related aspects.
Committee meetings The DLC REM Committee met eight times during the financial year ended 31 March 2024 and considered climate-related matters at three of those meetings.
Information and escalation channels The DLC REM Committee gets informed on climate-related targets when the Executive remuneration framework is reviewed. The DLC REM Committee will then assess the performance of the Executive against these targets. Refer to the 2024 Group Remuneration report page 11 for executive remuneration.
Key achievements for the year ending FY2024 Approved the executive remuneration framework regarding sustainability targets (including climate-related aspects). Refer to the 2024 Group Remuneration report page 4.
Focus areas for the year ending FY2025 Approve the executive remuneration framework regarding sustainability targets (including climate-related aspects). Refer to the 2024 Group Remuneration report page 4.
Management’s role in assessing and managing climate and nature-related risks and opportunities
Reporting requirements: Climate-related financial disclosures: BEIS (a). TCFD: G-b
Chief Executive (CE) responsibility
Responsibility The CE, Fani Titi, takes ultimate executive accountability for all sustainability, climate and nature-related matters. He is also on the board of the UN Global Compact network in South Africa.
Information and escalation channels The CE is informed of sustainability, climate and nature-related risks and opportunities through the Chief Strategy and Sustainability Officer, the Group ESG Executive Committee and the DLC SEC, of which he is also a member. He also receives written feedback through the Board reports.
Monitoring and oversight The CE is part of the DLC SEC and DLC BRCC, which monitor and oversee sustainability and climate-related goals and targets.
Key achievements for the year ending FY2024 • Approved the enhanced Sustainable and Transition Finance Classification Framework • Endorsed the double materiality assessment conducted according to the guidelines provided by the CSRD • Received recognition for the second year in a row by Corporate Knights as one of the top 100 most sustainable companies in the world.
Focus areas for the year ending FY25 • Monitor progress on setting a sustainable finance target and incorporating this target into Executive remuneration • Advocate industry participation, in particular engagement with the UN Global Compact network in South Africa • Monitor progress on the Group’s net-zero ambitions • Inform the strategic direction for climate and nature initiatives and alignment with the Group strategy.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Governance continued
The Board’s oversight of climate and nature-related risks and opportunities continued
Reporting requirements: Climate-related financial disclosures: BEIS (a). TCFD: G-b continued
Group ESG Executive Committee
Responsibility The Group CE is supported by the Group ESG Executive Committee to help align and coordinate the sustainability strategy and governance efforts across geographies and businesses. The Group ESG Executive Committee, mandated by the Group's Executive Directors, reports relevant sustainability, climate and nature-related matters to the DLC SEC and Group ERC.
Information and escalation channels Key sustainability, climate and nature-related matters raised by the business and forums mentioned below are escalated to the Chief Strategy and Sustainability Officer who presents these matters verbally and in written format at each Group ESG Executive Committee meeting. The forums include: • The Group sustainability team • Investec Limited Sustainable Business Forum • Investec plc Sustainable Business Forum • IW&II Responsible Investment Committee • Group ERC • IBL ERC • IBP ERC.
Monitoring and oversight • Receives updates on sustainability, climate and nature-related matters at each meeting in a verbal or presentation format • Reviews Investec Group’s ESG ratings (in particular Sustainalytics, MSCI, CDP, CSA Dow Jones and ISS), assessing and engaging on suggested actions to improve ratings and performance of climate and nature-related goals and targets • Discusses and approves actions towards carbon neutrality to meet our net-zero ambitions • The committee met six times during FY2024 where sustainability, climate and nature-related matters were discussed at every meeting.
Key achievements for the year ending FY2024 • Initiated a collaborative process to enhance the Sustainable and Transition Finance Classification Framework, which will serve as the foundation for establishing sustainable finance targets • Endorsed the automation of the Scope 3 financed emissions, aiming to enhance accuracy and efficiency • Reviewed and discussed the emerging sustainability regulations from the Prudential Authority, the ISSB’s recommendations specifically relating to IFRS S1 and IFRS S2, and the CSRD • Reviewed the double materiality assessment conducted in accordance with the requirements of the CSRD • Reviewed the sustainability strategy of the group, with a particular focus on our net-zero pathway • Provided capacity building for frontline staff on the application of sustainable finance in commercial activities.
Focus areas for the year ending FY2025 • Engage actively in the process of establishing sustainable finance targets for the Group • Track sustainable and transition finance initiatives across the Group • Review decarbonisation efforts • Monitor the developments regarding the inclusion of additional asset classes in the calculations of our Scope 3 financed emissions • Monitor new product offerings, with a strict focus on identifying greenwashing practices and staying informed about emerging anti- greenwashing regulations • Oversee the development of sustainability competencies across all global business units.

Executive responsibility within the Specialist Bank The Board assigned executive responsibility to Marc Kahn (Chief Strategy and Sustainability Officer) to drive the sustainability agenda across the Group. Mark Currie, our Group Chief Risk Officer as well as Kevin McKenna, our UK Chief Risk Officer are members of the Group ESG Executive Committee. Kevin McKenna is also the Senior Management Function (SMF) for climate risk for Investec Bank plc.

Executive responsibility within Wealth & Investment Joubert Hay as the Chief Executive Officer of Investec Wealth & Investment International has executive responsibility for sustainability and climate‑related matters. The implementation has been assigned to key members of the Wealth & Investment Responsible Investment Committee who coordinate the integration of the sustainability, climate and nature-related matters in our Wealth & Investment International business.

Chief Strategy and Sustainability Officer The Chief Strategy and Sustainability Officer, has a direct reporting line to the Group Chief Executive, Fani Titi. Any sustainability, climate and nature-related matters are reported to the CE verbally as and when they arise. The Chief Strategy and Sustainability Officer is the Chair of the Group ESG Executive Committee and collaborates with a range of directors, executives and senior leaders on sustainability matters. The sustainability teams within each of our jurisdictions report directly to the Chief Strategy and Sustainability Officer.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

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Strategy
Climate and nature-related risks and opportunities identified over the short, medium and long term
Reporting requirements: Climate-related financial disclosures: BEIS (d1) (d2). TCFD: S-a
Time horizons: Our time horizons are shown below and defined according to the average maturity of our portfolio: • Short-term (0 – 1 year): Sectors already experiencing some risk implications as a result of transition or physical risk • Medium-term (1 – 5 years): Sectors with exposure to transition or physical risk that is broadly manageable • Long-term (5 – 40 years): Modest sector-wide exposure to transition or physical risk or where the consequences are not likely to be material to credit quality.
Transition risks
Risk	Drivers	Potential impacts	Expected time horizon	Mitigation actions
Policy and legal risk	• Efforts to remain carbon neutral • Carbon tax • Climate and nature-related reporting regulations • Litigation actions • Potential risk of regulatory breaches from existing climate-related regulation	• Increased operating costs • Potential write off’s due to early retirement of assets • Changes in asset valuations	• Short term • Medium term • Long term	• Apply a balanced approach towards meeting stakeholder demands through active stakeholder engagement • Participating in industry initiatives to test and develop climate and nature-related reporting
Technology risk	• New technologies favoured due to lower carbon footprint • Investment in new technologies	• Costs associated with the substitution of technology to cleaner alternatives • Write off or early retirement of technology assets • Research and development expenses towards newer and greener technologies	• Short term • Medium-term	• Reduce environmental footprint through operational efficiencies • Adoption of cloud services and reduction of the reliance of on- premise data centres • Research on new and innovative technologies to mitigate cost issues
Market risk	• Competitor entrance with innovative sustainable finance product offerings • Change in consumer behaviour toward low carbon products • Increased costs and volatility in prices for carbon heavy products	• Scaling costs associated with implementing sustainable finance product offerings • Research and development costs for new product offerings • Operational costs associated with increased client engagements	• Medium term • Long term	• Increase sustainable finance offerings in line with client and market demand • Manage exposures to high emitting industries (e.g. fossil fuels)
Reputational risk	• Risk of greenwashing in product offerings and disclosure • Increased stakeholder concern and pressure on emission reduction strategies	• Increased costs relating to penalties associated with greenwashing • Potential increase in costs relating to additional reporting requirements	• Short term • Medium term	• Transparent disclosures • Targeted stakeholder engagement



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Strategy continued
Climate and nature-related risks and opportunities identified over the short, medium and long term continued
Reporting requirements: Climate-related financial disclosures: BEIS (d1) (d2). TCFD: S-a continued
Physical risks
Risk	Drivers	Potential impacts	Expected time horizon	Mitigation actions
Acute risk	• Damage to fixed assets, infrastructure and supply chain due to extreme climate events	• Supply chain disruption due to impacted production capacity • Disruption in operations due to extreme climate events • Costs associated with geospatial analysis of assets • Increased impairments for assets that are impacted severely by acute climate events • Forgone returns from riskier property assets	• Short term • Medium term • Long term	• Ensure resilience of operations to acute climate events (business continuity) • Identification and assessment of assets impacted by climate- related physical risks within our loan book • Evaluate our supply chain for potential exposure to physical climate risks • Ensure resilience through acute physical risk scenario analysis • Given the (relative) short-term nature of our loan book, we may be able to realign our loan book relatively frequently to pivot away from assets that may be at risk for acute physical events
Chronic risk	• Change in average temperature and precipitation patterns • Increase in sea level rise	• Cost associated with geospatial analysis of physical assets • Cost relating to adaptation measures within our own buildings	• Medium term • Long term	• Evaluate asset classes that may be exposed to chronic physical risks • Ensure resilience through chronic physical risk scenario analysis • Evaluate risks in supply chain that might be exposed to chronic physical risks
Opportunities
Within our business, we contribute to climate action and protecting nature through our financing activities. We actively support climate action by addressing critical environmental concerns, reducing greenhouse gas emissions, and fostering resilient communities. Through our investments, we promote a sustainable future where climate change impacts and biodiversity loss are mitigated, clean energy is accessible to all, and cities are environmentally friendly and adaptable.
Opportunity				Time horizon
Renewable energy	Financing renewable energy projects not only helps to decarbonise the energy sector but also contributes to energy access, security and affordability, especially in underserved communities. In addition, these financing activities can accelerate the transition towards a low-carbon economy and foster climate resilience.			• Short term
Water solutions and infrastructure	Financing water projects that enhance water infrastructure, promote water conservation, and improve sanitation systems. Through these projects we contribute to mitigating the adverse effects of climate change and building resilient communities.			• Medium term
Urban planning, green infrastructure and transportation	Financing projects that enhance urban planning, promote green infrastructure, and invest in public transportation systems contribute to reducing carbon emissions from transportation and buildings. By building sustainable cities that prioritise energy efficiency, renewable energy integration, and resilient infrastructure, we address the risks posed by climate change and promote sustainable development.			• Short term



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Strategy continued
The impact of climate and nature-related risks and opportunities on our businesses, strategy and financial planning
Reporting requirements: Climate-related financial disclosures: BEIS (e). TCFD: S-b
Products and services • Climate and nature-related risk has led to an enhanced ESG screening process, with transactions that fall within high-risk industries subject to even further due diligence. More detail on our ESG screening criteria is shown on page 50 of the 2024 Group climate and nature-related disclosures report • We have committed to zero coal exposures within our loan book by 31 March 2027 • There are numerous opportunities presented by climate change to move towards lower carbon product offerings as noted above.
Adaptation and mitigation activities: To date our activities largely focused on financing mitigation activities. These include: • Offering various sustainability-linked loans • Financing renewable energy solutions and water infrastructure (adaptation).
Investment in research and development: We have invested in research and development through the following: • Co-chairing the production of International Chamber of Commerce (ICC) Export Finance Sustainability White Paper: Global Trade Review (GTR), a leading publication in the trade and export finance market • Member in a network to transform industry ESG practices: Investec is part of a membership network, Sustainable Trading, that launched a non- profit membership to transform ESG practices within the financial markets trading industry.
Operations • Within our operations, we manage our own carbon footprint and source 100% of our Scope 2 energy from renewables, through the purchase of renewable energy certificates. • In the UK, Investec’s Corporate Estate Facilities Management upheld its commitment to environmental stewardship and energy efficiency by maintaining the certification of our integrated Environmental and Energy Management Systems. This system adheres to the internationally recognised ISO 14001 standard, and is implemented across nine of our offices in the UK and the Channel Islands. We continued to meet the rigorous requirements of the ISO 50001 standard, which was first achieved in 2018, across ten of our UK, Ireland and Channel Island locations.
Supply chain Our Investec Group procurement statement acknowledges the potential for our procurement and supply chain practices to be agents of change for different aspects of sustainability. Our supply chain statement incorporates standards on human rights, labour rights and environmental and anti-corruption principles, as set out in the UN Global Compact. All suppliers undergo a rigorous online screening and ESG due-diligence process before they are onboarded. With regards to environment- and climate-related conditions, we aim to only engage with suppliers who: • Operate in compliance with all applicable environmental laws and regulations of the countries in which they operate, manufacture or conduct business • Maintain an effective environmental policy and/or environmental management system that supports environmental protection.
The resilience of our strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario
Reporting requirements: Climate-related financial disclosures: BEIS (f). TCFD: S-c
Within Investec plc: Climate change-related financial risks are becoming increasingly significant for firms and the financial system. During April 2024, the Bank of England released their expectations for Banks regarding climate change. This included an expectation for banks to further advance and demonstrate the development and integration of processes to identify, measure, manage, and mitigate climate-related financial risks, based on our previous feedback. In addition, banks should also consider incorporating relevant and ambitious stress scenarios to enhance their assessment of the impact of climate change on their business resilience. Furthermore, they have started to initiate work to update the supervisory statement SS3/19, which will include effective practices and developments in broader regulatory thinking. Investec Bank plc performed climate scenario analysis and risk assessments in line with the requirements stipulated by Supervisory Statement SS3/19 ‘Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change’, on a proportionate basis for the size and complexity of the firm. The Bank of England’s ‘2021 Climate Biennial Exploratory Scenario’ has been used as the framework for scenario analysis. Short-term transition and physical risk is low and Investec plc has sufficient capital and liquidity to continue as a going concern and meet regulatory capital and liquidity requirements.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

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Risk management
Our processes for identifying and assessing climate and nature-related risks
Reporting requirements: Climate-related financial disclosures: BEIS (b). TCFD: R-a
Credit risk: Credit risk increases if climate risk drivers reduce borrowers’ ability to repay and service debt (income effect) or the banks’ ability to fully recover the value of a loan in the event of default (wealth affect). • Investec supports international best practice regarding the responsibility of the financial sector in financing and investing in transactions. Social, environmental and ethical risk considerations are implicit in our values, culture and code of conduct, and are applied as part of our risk frameworks • Our approach to managing the risks from climate change is continually evolving as we improve our understanding of this complex and interconnected risk. We are also aware of the enormity of the challenge of navigating through continuously changing methodologies • Climate risk was incorporated into the Investec Group’s risk frameworks as a principle risk in 2018 • Environmental, nature, climate-related and broader sustainability considerations are implicit in our values, culture and code of conduct and are applied as part of our environmental, nature and climate-related risk frameworks. We assess sustainability risk as part of the credit committee and investment committee’s evaluation of lending and investment decisions. This includes additional due diligence for transactions that fall into the high-risk ESG category (as defined by the IFC), which involves a comprehensive review by the Group sustainability team. This review identifies any potential risks relating to: • Social injustice (including human rights, diversity, inclusion and modern slavery, community displacement and health and safety risk) to support SDG 10 • Environmental impacts (including climate, nature degradation and animal welfare) so support SDG 13 • Governance matters (including corruption, fraud and controversies) • Macro-economic impacts (including poverty, growth, and unemployment) to support SDG 13 and SDG 10. • We consider double materiality as a critical factor to inform our decisions. We take a cautious approach to industries known to have an adverse effects on the environment, biodiversity and climate • If the Group sustainability team flags a transaction as a high concern issue, it will be escalated to a IBL, IBP, or Group ERC before any credit or investment decision is made. Moreover, the DLC SEC is informed of any transaction identified as high concern issues. Potential risks include: • Stranded assets where these assets are seen to be carbon intensive. This is particularly the case in fossil fuel assets • Lower earnings resulting from carbon intensive assets could lead to a need for higher capital expenditure to adapt to the changing market or higher operational expenditure due to fines and taxes imposed on these activities • Decrease in the value of collateral for high carbon intensive assets, leading to higher loss given defaults (LGDs) • Concentration risk in GHG-intensive sectors may arise, as many banks are aiming to divest from carbon intensive exposures.
Market risk: Market risks may occur due to shifts in supply and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly taken into account. • New competitors may emerge with product offerings with greener credentials. This could impact market share and potentially lead to a loss of customers • Consumer behaviours may change as they become more conscious of their carbon footprint and actively seek out lower carbon-intensive products and greener alternatives. This may lead to a decline in demand for non-green product offerings • The transition to a low-carbon economy can have an impact on equities, bonds, and derivatives. If we are not aligning our operations and strategies with market expectations for sustainability, financial instruments may be at risk of devaluation or becoming less attractive to investors.
Liquidity risk: Access to stable sources of funding could be reduced as market conditions change. Climate risk drivers may cause counterparties to draw down deposits and credit. • We may face challenges in obtaining funding from retail and corporate clients, or may pay substantially higher costs if we are perceived as not transitioning in line with market expectations. This could result in a loss of business opportunities and limited access to capital • We may face higher borrowing costs as lenders may perceive us as higher risk if we are lagging behind in the transition to a more sustainable business model.
Operational risk: Risk associated with disruptive incidents which can impact premises, staff, equipment, systems, and key business processes. • We may have an increased likelihood and impact of business disruption events due to physical climate risks.
Reputational risk: Increasing reputational risk as a result of changing market or consumer sentiment. • We may face reputational damage due to an association with clients who are perceived to be negatively affected by climate change or other risks. A link to clients that are viewed unfavorably by the market, could harm our reputation and undermine stakeholder confidence • Changing customer and community perceptions regarding a detraction from the transition to a lower-carbon economy could lead to a loss of trust and potentially impact client or investor sentiment



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Risk management continued
Our processes for identifying and assessing climate and nature-related risks continued
Reporting requirements: Climate-related financial disclosures: BEIS (b). TCFD: R-a continued
Regulatory and compliance risk: Changing legislation, regulation, policies, voluntary codes of practice and their interpretation in the markets in which we operate can have an impact on the Group’s operations, business prospects, costs, liquidity and capital requirements. • As governments and regulatory bodies continue to address climate change, we may need to adapt to new requirements and comply with evolving standards. This can lead to increased legal and regulatory compliance risks, particularly in relation to climate-sensitive investments and businesses • Maintaining carbon neutrality is crucial for Investec, as any failure to do so may result in additional cost implications for our operations. We may incur expenses to reduce our carbon footprint or offset emissions to maintain carbon-neutral status • We may face the potential for increased claims in the form of environmental liability exposures. As awareness of environmental issues grows, stakeholders may hold Investec accountable for any negative environmental impacts resulting from our activities or investments • We may face increased costs due to the pricing of emissions or the imposition of carbon taxes • Non-adherence to new requirements can result in fines or penalties • We may face the potential for litigation as a means to drive increased climate change mitigation activity across various sectors.
To address these risks, we incorporate sustainable practices, diversify product offerings with greener alternatives where feasible, and monitor market trends. We prioritise sustainability and communicate our commitment to responsible business practices. Where possible we align our operations with market expectations and engage with our clients and stakeholders on environmental issues. In addition, we monitor and adapt to changing regulations, proactively manage our environmental impact, and ensure compliance with evolving standards.
Our processes for managing climate and nature-related risks
Reporting requirements: Climate-related financial disclosures: BEIS (b). TCFD: R-b
Investec has a holistic approach to sustainability, and support the precautionary approach to sustainability management, guided by international best practices regarding the responsibilities of the financial sector in financing and investing transactions. This approach runs beyond recognising the Group’s own footprint on the environment and is based on a broader responsibility to the environment and society. We recognise the complexity and urgency of climate change. We are committed to supporting the transition to a clean and energy efficient world while preserving our planet and the wellbeing of our people. The Group ESG Executive Committee mandated by the Group’s Executive Directors reports relevant sustainability-related matters to the DLC SEC and Group ERC. The main objectives of the committee are to coordinate sustainability-related efforts across geographies and businesses Accordingly, sustainability risk considerations are considered by the relevant credit committee or investment committee when making lending or investment decisions. Investec’s climate change position statement stems from the belief that one of the greatest socio-economic impacts we can have is to partner with our clients and stakeholders to accelerate a cleaner, more resilient and inclusive world. Our environmental policy considers the risks and opportunities that climate change and nature degradation present to the global economy. We have linked sustainability-related metrics and KPIs to Executive Directors compensation.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

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Risk management continued
How our processes for identifying, assessing, and managing climate and nature-related risks are integrated into overall risk management
Reporting requirements: Climate-related financial disclosures: BEIS (c). TCFD: R-c
We assess sustainability risks as part of the credit committee or investment committee’s evaluation of lending or investment decisions. This includes additional due diligence for transactions that fall into the high-risk ESG category (as defined by the IFC), which involves a comprehensive review by the Group sustainability team. We continuously support and adhere to international best practices regarding the responsibilities of the financial sector in financing and investing in transactions. We adopt a precautionary approach to environmental, nature, climate-related, and broader sustainability matters. These risk considerations are integrated into multidisciplinary, company-wide management processes throughout the Group and are effectively managed within our lending and investment portfolios. We have established an environmental policy, climate change statement, biodiversity statement, and a fossil fuel policy. We conduct screening to identify possible adverse climate and nature-related impacts in both our lending and investment activities, as well as in our deposit-taking activities. We have a strict policy of not onboarding clients who do not comply with our Group environmental policy, climate change statement, biodiversity statement, or fossil fuel policy. Regular training is provided to business units to identify any potential high-risk transactions as classified by the IFC. High risk transactions are escalated to the Group sustainability team who will conduct screening and additional due-diligence. In the case where the Group sustainability team flag a transaction as high concern, the transaction will be escalated to IBL, IBP, or Group ERC before any credit or investment decision is made. Additionally, the ESG Executive Committee and the DLC SEC are informed at every meeting regarding the number of transactions screened, high risk transactions identified, and high concern transactions escalated. Credit risk: We continue to enhance our screening process across all our business activities. The identification of high-risk industries has been automated within Investec plc. Transactions are classified according to the World Bank IFC guidelines into high, medium and low risk. • High risk: Proposed funding or investment is likely to have significant adverse social or environmental impacts that are diverse, irreversible, or unprecedented without mitigation • Medium risk: Proposed funding or investment is likely to have limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures. • Low risk: Proposed funding or investment is likely to have minimal or no social or environmental impacts. This largely relates to services, consulting, training and education, trading, retail sales, etc. Once a transaction has been identified as being in a high-risk industry, these activities go through a comprehensive due diligence process performed by the Group ESG team. In depth analysis is done by the team to: • Assess the alignment of the transaction with our climate-related and sustainability (including ESG) policies • Ensure there is no contravention of our ESG screening requirements or zero-tolerance activities (refer to page 62) • Assess the client’s ambitions towards net-zero pathways • Assess ESG ratings by globally accredited bodies (e.g. CDP, Sustainalytics) • Assess public reporting on climate-related and sustainability (including ESG) matters and impacts • Assess disclosures in line with the GRI and TCFD • Assess alignment with the UN SDGs • Assess any other publicly available information around their contribution to, and positive/negative impact on ESG aspects • Investigate any media controversies or reputational issues facing the client involved. For each high-risk transaction, an ESG opinion is provided by the Group ESG team for consideration by our credit committees. Operational risk: We reviewed our exposure to physical risk within Investec plc operations. Our operational risk systems incorporate climate change in their risk assessments. Our business units complete a climate-related risk impact assessment annually. In addition, we perform ESG due diligence on all suppliers when they are onboarded. Litigation/liability: Where required our legal documentation includes sustainability and climate-related terms and conditions.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

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Metrics and targets
The metrics used to assess climate-related risks and opportunities in line with our strategy and risk management process
Reporting requirements: Climate-related financial disclosures: BEIS (g). TCFD: M-a
For the year ending 31 March 2024 we have reported on a range of metrics to measure progress against our climate ambitions.
Measure		Target
Carbon footprint: Refer to the Basis of Reporting on our website
Scope 1: This includes natural gas, LPG stationary, refrigerant and vehicle fleet.	350tCO2 e ( 2023 : 44tCO 2 e) The increase relates to more KPI’s included in 2024*	Our target is to remain carbon neutral for our Scope 1, Scope 2 and operational Scope 3 emissions, through the use of renewable energy certificates and carbon offsets for unavoidable residual emissions.
Scope 2: This includes emissions from electricity and district heating and cooling used in Investec Group premises. These emissions are evaluated based on market-based and location-based factors.	937tCO 2e ( 2023 : 974**tCO2 e)
Scope 3: Category 1: Purchased goods and services (paper) Category 5: Waste generated in our operations Category 6: Business travel (includes rail travel, road travel, taxi and commercial airlines) Category 7: Work from home emissions.	6 996tCO2 e ( 2023 : 5 623**tCO2 e)
Total operational footprint: location based	8 283tCO2 e ( 2023 : 6 641**tCO2 e)
Total operational footprint: market based	7 346tCO2 e ( 2023 : 5 667**tCO2 e
Fossil fuels • Fossil fuels as a % of core loans and advances 2.50% ( 2023: 2.43%) • Coal as a % of core loans and advances 0.05% ( 2023 : 0.10%) • Coal exposure as a % of total energy lending portfolio 0.90% ( 2023 : 2.26%) • Renewables exposure as a % of total energy lending portfolio 52.35% ( 2023 : 42.47%).		We have set the following targets: • Investec plc to have zero coal exposure in their loan book by 31 March 2027 • Investec Group to have zero thermal coal exposure in their loan book by 31 March 2030 • To cease financing of new oil and gas, exploration,extraction or production projects directly, regardless of jurisdiction, from 1 January 2035.
High-risk industries in our loan book (as defined by the IFC) • 8.0% of our loan book is within high-risk industries (as defined by the IFC).		We have not explicitly set a target for high-risk industries, however we remain under the IFC targets being 5% towards one particular industry. Our high risk transactions across all industries account for only 8% of our loans and advances.
Financed emissions within our loans and investments • 1 422 299tCO2 e (March 2023: 2 223 963tCO 2 e)		Efforts to influence our client ecosystem have focused on improving the quality and accuracy of our Scope 3 financed emissions rather than expanding the scope of asset classes included in these calculations. While we acknowledge that this is just the beginning, we recognise the importance of active client engagement and advocating for better quality data and sustainability practices. Although we have not set sector targets yet, we endeavour to do this in the next 2 years, however, our target remains to be net zero by 2050 through our commitment to the Net-Zero Banking Alliance.

* The increase is due to the improved data available for Scope 1 refrigerants, LPG stationary and vehicle fleet reported in Investec plc.

** Restated, the information in this report includes estimates or other information that are subject to uncertainties, which may include the methodology, collection

and verification of data, various estimates and assumptions, and/or underlying data that is obtained from third parties. As a result, we expect that certain

disclosures made in this report may be amended, updated, recalculated and restated in the future as the quality and completeness of our data and

methodologies continue to improve.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED


Metrics and targets continued
The metrics used to assess climate-related risks and opportunities in line with our strategy and risk management process continued
Reporting requirements: Climate-related financial disclosures: BEIS (g). TCFD: M-a continued
Sustainable and transition finance Our Sustainable and Transition Finance Classification Framework outlines the methodology and supporting policies and procedures to support sustainable and transition finance practices within the Group. This framework describes our approach for classifying sustainable and transition finance activities. The framework enables the classification of environmentally-sustainable finance, transition finance and social sustainable finance activities. The framework is based on a combination of best practice guidelines and taxonomies, including the harmonised framework for impact reporting released by the International Capital Market Association (ICMA), the Net-Zero Banking Alliance (NZBA) transition finance guidance, the Loan Market Association (LMA) principles, the South African Green Finance Taxonomy, and the EU Taxonomy for sustainable finance activities. The framework is built on the principles of addressing climate action (SDG 13) and reduced inequalities (SDG 10) being fundamental to the success of our business. The following categories are addressed as part of this framework.		In the year under review, we introduced an enhanced Sustainable and Transition Finance Classification Framework to guide our decision-making processes as we actively pursue our 2050 net-zero ambition. We have established a Sustainable Business Forum in the UK that develops and integrates sustainability strategies into our business processes, commercial plays, and incentive frameworks, addressing our own aspirations as well as the expectations of our stakeholders. We are developing and rigorously testing targets to be released by the end of March 2025.
Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks
Reporting requirements: Climate-related financial disclosures: BEIS (h). TCFD: M-b
• Our operational footprint increased by 25% compared to March 2023. Every year, we endeavour to improve the accuracy and completeness of our data collection processes. Within each geography, the environmental manager is responsible for monitoring the GHG emissions. We will continue to pursue further decarbonisation in line with our net-zero ambition for 2050, as outlined in our Climate transition plan. We maintained carbon neutrality in our direct emissions for the sixth financial year as part of our commitment to ongoing carbon neutrality in our Scope 1, Scope 2 and operational Scope 3 emissions. We continue to source 100% of our Scope 2 emissions from renewable sources through the purchase of renewable energy certificates. Refer to page 63 for the SECR disclosures. • In line with our ambition to be net-zero by 2050, our focus this year was on improving the process to calculate our financed emissions, while concurrently working on the foundations of new sectors to be included. We have made substantial progress in improving the quality of our data inputs. This involved implementing rigorous data collection processes to ensure that the data we use is accurate, reliable, and up-to-date. We have dedicated significant resources to automate the financed emissions calculations using the PCAF methodology which improved alignment across our jurisdictions and improved the consistency of applied methodologies. We have enhanced the process thereby increasing our data governance and data integrity. As a result, we have analysed 78% of our loans and investment exposure as of 31 March 2023. For information on related risks and limitations, please see page 64 to 81 of our 2024 Climate and nature-related disclosures report.
The targets used by the organisation to manage climate and nature-related risks and opportunities and performance against targets
Reporting requirements: Climate-related financial disclosures: BEIS (h). TCFD: M-c
Progress is monitored through climate-related targets and ambitions across the following: • As of 31 March 2023, Investec Group stopped all project financing to new thermal coal mines, regardless of jurisdiction • Investec Group committed not to finance any new oil and gas extraction, exploration, or production from 1 January 2035 • Investec Group commitment to zero thermal coal exposure in their loan book by 31 March 2030 • Investec plc committed to zero coal exposure in their loan book by 31 March 2027 • Continue our efforts in financing climate solutions • Embedding climate into our culture and decision-making.



01	Operational and strategic overview	Investec plc Annual Financial Statements 2024

CLIMATE RELATED DISCLOSURES CONTINUED

Risk management

and governance



02	Risk management and governance	Investec plc Annual Financial Statements 2024

Our risk management culture ensures

we are locally responsive yet globally

aware. This section contains our risk

management disclosures.

IN THIS SECTION





28	Risk management approach and framework

29	Year in review from a risk perspective

31	Principal risks

46	Investec plc Audit Committee report

58	Directors’ report



02	Risk management and governance	Investec plc Annual Financial Statements 2024

Information provided in this section of the

annual report is prepared on an Investec

plc consolidated basis unless otherwise

stated.

Philosophy and approach

to risk management

The Group's comprehensive risk

management process involves

identifying, quantifying, managing,

monitoring, mitigating and reporting the

risks associated with each of the

businesses to ensure the risks remain

within the stated risk appetite.

The Board ensures that there are

appropriate resources to manage the

risks arising from running our businesses.

The DLC Board Risk and Capital

Committee (DLC BRCC) (comprising both

Executive and Non-Executive Directors)

is the Board mandated committee to

monitor and oversee risk. The DLC BRCC

meets at least five times per annum and

recommends the overall risk appetite for

the Investec Group to the Board for

approval.

We monitor and control risk exposure

through independent credit, market,

liquidity, operational, legal, internal audit,

capital and compliance teams. This

approach is core to assuming a tolerable

risk and reward profile, helping us to

pursue controlled growth across our

business.

Group risk management operates within

an integrated but geographical and

divisional structure, in line with our

management approach, ensuring that the

appropriate processes are used to

address all risks across the Group.

There are specialist divisions in the UK

and smaller risk divisions in other regions

tasked with promoting sound risk

management practices.

Risk management units are locally

responsive yet globally aware. This helps

to ensure that all initiatives and

businesses operate within our defined

risk parameters and objectives. We

continually seek new ways to enhance

risk management techniques.

We believe that the risk management

systems and processes we have in place

are adequate to support the Group’s

strategy and allow the Group to operate

within its risk appetite tolerance.

Group risk management

objectives are to:

• Ensure adherence to our risk

management culture

• Support the long-term sustainability

of the Group by providing an

established, independent framework

for identifying, evaluating, monitoring

and mitigating risk with good customer

outcomes

• Set, approve and monitor adherence to

underlying risk parameters and limits

across the Group and ensure they

are implemented and adhered

to consistently within the Board-

approved risk appetite

• Aggregate and monitor exposure

across risk classes

• Coordinate risk management activities

across the organisation, covering

all legal entities and jurisdictions

• Give the Board reasonable assurance

that the risks the Group is exposed to

are identified and appropriately

managed and controlled

• Resource risk teams suitably and with

appropriate expertise and facilitate

operating independence

• Establish and convene appropriate risk

committees to provide oversight and

assurance to to the Board as

mandated

• Maintain compliance in relation

to regulatory requirements.

Risk management

framework, committees

and forums

A number of committees and forums

identify and manage risk at Group level,

as shown in the diagram below. These

committees and forums, mandated by

the Board, operate together with Group

risk management, the IBP Board and sub

committees within respective operating

jurisdictions. The Board of IBP, our

regulated banking subsidiary, is

responsible for the statutory matters,

corporate governance and compliance

with the applicable legislation and

governance requirements within

jurisdictions of operation. The Board and

Board committees of IBP report to the

Board and the Board committees of the

Group with the interconnection between

the respective Board committees

supported by the membership or

attendance of the chairman of the Group

Board committee at the respective

subsidiary Board committees.

Investec plc Board

DLC Audit Committee

DLC Remuneration

Committee

DLC Nominations and

Directors’ Affairs

Committee

(DLC Nomdac)

DLC Board Risk and

Capital Committee

(DLC BRCC)

DLC Social and Ethics

Committee

(DLC SEC)

DLC IT Risk and

Governance Committee

Investec plc Asset and

Liability Committee

DLC Capital Committee

Group Executive Risk

Committee

(Group ERC)

Investec plc Capital

Committee



02	Risk management and governance	Investec plc Annual Financial Statements 2024

RISK MANAGEMENT APPROACH AND FRAMEWORK

A summary of the year in review

from a risk perspective

The executive management is integrally

involved in ensuring stringent

management of risk through our risk

appetite framework, and embedding a

culture of risk consciousness in all staff.

The risk appetite framework is set taking

into consideration prevailing market

conditions and Investec’s strategy. The

primary aim is to achieve a suitable

balance between risk and reward in our

businesses.

Despite rising geopolitical tensions and a

backdrop of a number of upcoming

elections globally, including in the UK, we

have continued to grow our business in a

risk conscious manner. The Group

remains well capitalised, maintains high

levels of liquidity, runs modest levels of

market risk and favours lending to clients

with predictable income streams that

provide sound collateral.

Loans and advances to customers as a

percentage of customer deposits

remained conservative at 79.7%. Investec

plc has a substantial portion of eligible

deposits that are covered by Financial

Services Compensation Scheme (FSCS)

protection.

We have limited reliance on wholesale

funding but we maintain access and

presence, using wholesale issuance to

strategically diversify our funding base

and complement the other liability

channels by focusing, where appropriate,

on tenor and currency as part of a longer

term strategic plan.

The Bank of England (BoE) formally

notified Investec plc on 28 June 2023

that the preferred resolution strategy will

change from bank insolvency procedure

to bail-in and as such Investec plc, and

IBP as a material subsidiary, will be

subject to a revised Minimum

Requirements for Own Funds and Eligible

Liabilities (MREL) requirement. The MREL

transition will commence from 1 January

2026 in a phased manner with end-state

MREL applying from 1 January 2032. Any

additional MREL requirements will be met

over time as part of increasing wholesale

market issuance from the existing

established base and we will continue to

evaluate issuance opportunities in the

near term as part of this glide path.

Cash and near cash balances at

31 March 2024 amounted to £9.7 billion.

We maintain a high level of readily

available, high-quality liquid assets

(HQLA), targeting a minimum cash to

customer deposit ratio of 25%. Current

cash and near cash is equivalent to

46.4% of customer deposits. At 31 March

2024, the Liquidity Coverage ratio (LCR)

for Investec plc was 453% and the Net

Stable Funding ratio (NSFR) was 146%,

both metrics well ahead of current

minimum regulatory requirements.

We continue to maintain a structural

hedging programme in the UK to reduce

sensitivity of earnings to interest rate

movements.

The Group’s focus remains on maintaining

a strong liquidity position as the

geographies in which we operate go

through the current election period.

Funding continues to be actively raised,

across a diverse funding base, supported

by stable credit ratings.

IBP’s long-term Moody’s deposit rating is

A1 (stable outlook) and Investec plc’s

rating is Baa1 (stable outlook). IBP’s long-

term Fitch rating is BBB+ (stable outlook).

We have continued to grow our loan book

while ensuring its resilience, despite the

challenging macro-economic

environment. Increased client activity and

new client acquisition resulted in an

increase in the Bank's net core loan book

by 6.4% to £16.6 billion. Growth was

mainly due to increased activity

diversified across multiple asset classes

of Corporate client lending.

Credit exposures are focused on secured

lending to a select target market,

comprising high-income and high net

worth individuals, established corporates,

and medium-sized enterprises. Our risk

appetite continued to favour lower risk,

income-based lending, with exposures

well collateralised and with credit risk

taken over a short to medium term. We

remain focused on our target market,

supporting clients with significant wealth

and experience in their chosen sectors,

as indicated by our continued growth in

the private banking space as we execute

on our strategy to target this sector of the

market. Over the past few years we have

realigned and rebalanced our portfolios in

line with our risk appetite framework and

this is reflected in the movements in

asset classes on our balance sheet;

showing an increase in private client,

mortgages and corporate and other

lending, and maintaining lending

collateralised by property as a proportion

of net core loans.

The Group’s net core loan exposures

remain well diversified with commercial

rent producing property loans comprising

approximately 7.6% of net core loans,

other lending collateralised by property

7.4%, high net worth and other private

client lending 34.5% and corporate and

other lending 50.5% (with most industry

concentrations well below 5%).

We remain confident that we have a well-

diversified portfolio across sectors.

Asset quality ratios reflect the current

operating environment and underlying

portfolios remain resilient. The credit loss

ratio is at 0.58% at 31 March 2024

(31 March 2023: 0.37%), in line with

guidance provided in November 2023, as

we adequately provisioned for a small

number of new and existing Stage 3

deals to allow for exits in the non-

performing portfolio. We expect the

credit loss ratio to remain elevated

between 50bps and 60bps in the short

term.

Stage 3 exposures totalled 3.3% of gross

core loans subject to ECL at 31 March

2024 (31 March 2023: 2.3%) driven by

isolated individual client default incidents

across multiple asset classes with no

specific trends evident.

Stage 2 exposures as a proportion of

gross core loans subject to ECL

decreased to 8.6% at 31 March 2024 (31

March 2023: 8.7%) as underlying

portfolios continue to perform.

The measurement of ECL under IFRS 9

has increased complexity and reliance on

expert credit judgements. Key

judgemental areas under IFRS 9 are

highlighted in this document and are

subject to robust governance processes.

The Bank applies the IFRS 9 transitional

arrangements to regulatory capital

calculations to absorb the permissible

IFRS 9 impact over time.

We hold a management overlay of £3.7

million at 31 March 2024 (31 March 2023:

£4.9 million) which is apportioned to

Stage 2 assets.


	Further detail on key judgements can be found on page 181 .

We continue to progress in entrenching

sustainability across all aspects of our

business. Our commitment to human rights

and support for internationally recognised

principles, guidelines and voluntary ESG

standards is tightly integrated into our

credit decision-making process which

considers the important aspects of each

geography we operate in. We have

published the Investec Group's enhanced

Sustainable and Transition Finance

Classification Framework, with targets to

be published by 31 March 2025.

Market risk within our trading portfolio

remains modest with Value at Risk (VaR)

and stress testing scenarios remaining at

prudent levels. Trading revenues are

driven by client activity.

We have substantially managed down our

investment portfolio exposure in line with

our objective of optimising capital

allocation, reducing income volatility and

aligning the business with our client

franchises. The investment portfolio on



02	Risk management and governance	Investec plc Annual Financial Statements 2024

YEAR IN REVIEW FROM A RISK PERSPECTIVE

the balance sheet reduced by 17.1% over

the year under review to £405 million at

31 March 2024.

The Group continued to maintain a sound

balance sheet with a low gearing ratio of

8.7 times and a core loans to equity ratio

of 4.8 times at 31 March 2024.

The Group maintained a sound capital

position, well in excess of minimum

regulatory requirements, with a Common

Equity Tier 1 (CET1) ratio of 12.1% (31

March 2023: 11.7%) and a leverage ratio

of 10.0% (31 March 2023: 9.2%). The

Group remains on the Standardised

Approach and with these metrics

comfortably exceeds the target CET1

ratio of greater than 10% and leverage

ratio target of greater than 6%. We

continue our efforts to build Internal

Ratings Based (IRB) approach models.

Good progress is being made towards

the submission of an application to the

Prudential Regulation Authority (PRA).

Non-financial risks that arise through the

Group's operations remain highly topical

and continue to receive a significant

amount of management time, particularly

in light of the evolving technological

landscape and regulatory focus.

Operational risk is managed across the

business through an internal control

environment, with a view to limiting the

risk to acceptable residual risks.

The importance of operational resilience

to ensure minimal client disruption is

paramount. We take a highly disciplined

approach to recovery and resolution

planning and remain focused on

managing conduct, reputational and

operational risks.

Keeping abreast of industry-wide trends

with respect to artificial intelligence (AI)

developments, cyber threats and data

management as well as increased

reliance on big tech and cloud platforms

remains an area of focus and significant

time is spent ensuring we have the

appropriate expertise to assess potential

threats and opportunities.

We remain cognisant of the emerging

risks arising from technological advances

and continually aim to strengthen and

test our systems and controls to mitigate

cyber risk and fulfil our moral and

regulatory obligations to combat money

laundering, fraud and corruption.

We continue to offer access to wealth

management through our strategic

partnership with Rathbones, following

completion of the all-share combination

of the UK Wealth & Investment business

in September 2023. The Partnership

Agreement with Rathbones governs the

long-term, strategic partnership and is

expected to unlock significant value in

the medium to long term.

The Group operates in a legal and

regulatory environment that exposes it to

litigation risks. As a result, the Group is

involved in disputes and legal

proceedings which arise in the ordinary

course of business. The Group evaluates

all facts, the probability of the outcome of

legal proceedings and advice from

internal and external legal counsel when

considering the accounting implications.

We have raised a provision of £30 million

for the potential financial impact of the

recently announced industry-wide

Financial Conduct Authority (FCA) review

into historical motor finance commission

arrangements and sales in the UK.

Investec plc began lending in this space

in June 2015 and at 31 March 2021,

Motor finance totalled £555 million of the

Bank’s loan book. The Group continues to

believe that its historical practices were

compliant with the law and regulations in

place at the time, and welcomes the FCA

intervention through its industry wide

review. The provision includes estimates

for operational and legal costs, including

litigation costs, together with estimates

for potential awards, based on various

scenarios using a range of assumptions.

The Board, through its respective risk

and capital committees, continued to

assess the impact of its principal risks

and the Group’s stress testing scenarios

(including ‘bottom-up’ and reverse stress

testing analyses) on its business. The

Board has concluded that the Group has

robust systems and processes in place to

manage these risks and that, while under

a severe stress scenario business activity

would be very subdued, the Group would

continue to maintain adequate liquidity

and capital balances to support the

continued operation of the Group.

During the year, a number of stress

scenarios were considered and

incorporated into our processes.

Fundamental risk performance during the

period has been solid and management

remains focused on maintaining the

sound underlying balance sheet,

notwithstanding the macro-economic

pressures we continue to face in our

areas of operation. Going forward, we are

closely monitoring developments with

respect to the global geopolitical outlook,

including any potential impact from the

outcomes of a number of elections

globally, including in the UK. We maintain

high levels of liquidity and diversified

funding, supported by a strong capital

base in line with our risk appetite

positioning us well to support our clients

through the period ahead.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

YEAR IN REVIEW FROM A RISK PERSPECTIVE CONTINUED

An overview of the principal risks

relating to our operations

The most material and significant risks

we face, which the Board and senior

management believe could have an

impact on our operations, financial

performance, viability and prospects are

summarised below with further

information pertaining to the

management and monitoring of these

principal risks shown in the references

provided.

The Board, through its various

committees, has performed a robust

assessment of these principal risks and

regular reporting of these risks is made to

the Board.

The Board recognises that, even with

sound appetite and judgement, extreme

events can happen which are completely

outside of the Board’s control. It is,

however, necessary to assess these

events and their impact and how they

may be mitigated by considering the risk

appetite framework. It is the Group's

policy to regularly conduct multiple stress

testing scenarios (including reverse

stress testing) which, in theory, test

extreme but plausible events and from

that, assess and plan what can be done

to mitigate the potential outcome.

In addition to the principal risks, emerging

risks continue to be reviewed and

assessed. These emerging risks are

evaluated for their inherent risk level and

potential impact on the Group's

operations, financial performance,

viability, and prospects. Mitigation

measures are considered to address

these risks, taking into account their

potential influence on the principal risks.

A number of these risks are beyond the

Group’s control and are considered in our

capital plans, stress testing analyses and

budget processes, where applicable.

The Group’s stress testing framework is

well embedded in its operations and is

designed to identify and regularly test the

Group’s key vulnerabilities under stress.

A fundamental part of the stress testing

process is a full and comprehensive

analysis of the Group’s material business

activities, incorporating views from risk,

the business units and the executive –

a process called the ‘bottom-up’ analysis.

Resulting from the ‘bottom-up’ analysis,

the Investec-specific stress scenarios are

designed to specifically test the unique

attributes of the Group’s portfolio.

The key is to understand the potential

threats to our sustainability and

profitability and thus a number of risk

scenarios are developed and assessed.

These Investec-specific stress scenarios

form an integral part of our capital

planning process and IFRS 9 reporting.

The stress testing process also informs

the risk appetite review process and the

management of risk appetite limits and is

a key risk management tool of the Group.

Reverse stress tests are conducted to

stress the Group’s business plan to failure

and consider a broad variety of extreme

and remote events. These processes

allow the Group to proactively identify

underlying risks and manage them

accordingly.

The Group has a strong and embedded

risk and capital management culture with

policies, processes and systems in place

to address these principal risks. Risk

awareness, governance, controls and

compliance are embedded in all our day-

to-day activities through a levels of

defence model.

The levels of defence model is applied as

follows:

• Level 1 – Business unit management:

responsible for identifying and

managing risks inherent in the

products, activities, processes and

systems for which it is accountable

and escalating risk events where

necessary

• Level 2 – Independent risk and

compliance functions: responsible for

building and embedding risk

frameworks, challenging the business

lines’ inputs to, and outputs from, the

Group’s risk management, risk

measurement and reporting activities

• Level 3 – Independent internal audit:

responsible for reviewing and testing

the application and effectiveness of

risk management procedures and

practices.

Overall Group risk appetite

The Group has a number of Board-

approved risk appetite statements and

policy documents covering our risk

appetite and approach to our principal

aspects of risk. The risk appetite

statements and frameworks for Investec

plc and Investec Limited set out the

Board’s mandated risk appetite.The risk

appetite statements ensure that limits/

targets are applied and monitored across

all key operating jurisdictions and legal

entities. The risk appetite frameworks act

as a guide to determine the acceptable

risk profile of the Group.

The risk appetite frameworks are a

function of business strategy, budget and

capital processes, our stress testing

reviews and the regulatory and economic

environment in which the Group is

operating. The risk appetite frameworks

are reviewed (in light of the above

aspects) and approved by the Board at

least annually or as business needs

dictate.

A documented process exists where our

risk profile is measured against our risk

appetite and this positioning is presented

to the Board. In the section that follows,

the Group's high-level summary of overall

risk appetite and positioning has been

detailed against the respective principal

risks.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS

Link to strategy – key

Connected client

ecosystems

Growth

initiatives

Optimisation of

returns

Entrepreneurial

culture

Digitalisation

Strategic use of

data



Credit and counterparty risk		Credit and counterparty risk is defined as the risk arising from an obligor’s (typically a client or counterparty) failure to meet the terms of any agreement thereby resulting in a loss to the Group, arising when funds are extended, committed, invested, or otherwise exposed through contractual agreements, whether reflected on- or off-balance sheet


Link to strategy and opportunities		Monitoring and mitigation activities • Independent credit committees exist in the UK which also have oversight of regions where we assume credit risk. These committees operate under Board-approved delegated limits, policies and procedures • There is a high level of executive involvement in decision-making with non-executive review and oversight • The Group’s credit exposures are to a select target market comprising high-income and high net worth individuals, established corporates, small and medium-sized enterprises, financial institutions and sovereigns • Our risk appetite continues to favour lower risk, income-based lending with exposures well collateralised and credit risk taken over a short to medium term • Investec has a limited appetite for unsecured debt, thus the credit risk mitigation technique most commonly used is the taking of collateral, with a strong preference for tangible assets • Portfolio reviews (including stress testing analyses) are undertaken on all material businesses, where the portfolios are analysed to assess any migration in portfolio quality, highlight any vulnerabilities, identify portfolio concentrations and make appropriate recommendations, such as a reduction in risk appetite limits or specific exposures.



Further information
	Read more on pages 164 to 180.

		Risk appetite and tolerance metric We target a credit loss ratio of less than 1.5% under a weak economic environment/stressed scenario (under normal conditions, less than 0.5%). We target Stage 3 net of ECL as a % of net core loans subject to ECL to be less than 4% under a weak economic environment/stressed scenario (excluding the Legacy portfolio*; under normal conditions, less than 2%). We target Stage 3 net of ECL as a % of CET1 less than 25%.	Positioning a 31 March 2024 The Group currently remains within all tolerance levels given the current weakened economic environment. The Group credit loss ratio was calculated at 0.58% for 31 March 2024 (31 March 2023:0.37%). Stage 3 net of ECL as a % of net core loans subject to ECL was 2.5% excluding the Legacy portfolio*). Stage 3 net of ECL as a % of CET1 is 17.4%.

*Refer to definitions on page 217.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS CONTINUED

Link to strategy – key

Connected client

ecosystems

Growth

initiatives

Optimisation of

returns

Entrepreneurial

culture

Digitalisation

Strategic use of

data



Concentration risk		Concentration risk refers to the risk that could arise from a single client or counterparty, group of connected counterparties, or from a particular geography, asset class, supplier or industry. Concentration risk may occur when counterparties are mutually affected by similar economic, legal, regulatory or other factors which could hinder their ability to meet contractual obligations


Link to strategy and opportunities		Monitoring and mitigation activities • As a matter of course, concentration risk is well managed and exposures are well spread across geographies, asset classes and industries • We target a diversified funding base, avoiding undue concentrations by investor type, maturity, market source, instrument and currency • Consideration is given to concentration risk when assessing outsourcing and third parties, both within the business and across the financial sector systemically • We target a diversified loan portfolio, lending to clients we know and understand. Credit and counterparty risk is always assessed with reference to the aggregate exposure to a single counterparty or group of related parties to manage concentration risk. In order to manage concentration, we will consider a sell-down of exposures to market participants • Concentration risk can also exist where loan maturities are clustered to single periods in time. Loan maturities are monitored on a portfolio and a transaction level.



More information
	Read more on page 164 .

		Risk appetite and tolerance metric We limit our core loan exposure to a single/connected individual or company to £120 million for Investec plc. We also have a number of risk tolerance limits and targets for specific asset classes. Third party and outsourcing concentrations are permitted in relation to regulated, systemically important entities, external auditors or specialist global network infrastructures. Where strategic decisions result in concentration risk in third parties outside of these classifications, these decisions are based on considered analysis where the benefits outweigh the risks and appropriate controls have been deployed for managing and monitoring the associated risks.	Positioning at 31 March 2024 We maintained this risk tolerance level throughout the year.



Country risk		Country risk refers to the risk of lending to a counterparty operating in a particular country or the risk inherent in a sovereign exposure, i.e. the risk of exposure to loss caused by events in that country. Country risk covers all forms of lending or investment activity whether to/with individuals, corporates, banks or governments


Link to strategy and opportunities		Monitoring and mitigation activities • Exposures are only to politically stable jurisdictions that we understand and have preferably operated in before • The legal environment should be tested, have legal precedent in line with the Organisation for Economic Co-operation and Development (OECD) standards and have good corporate governance • In certain cases, we may make use of political risk insurance to mitigate exposure where deemed necessary.



Further information
	Read more on page 165 .

		Risk appetite and tolerance metric We have a preference for primary exposure in the Group’s main operating geography (i.e. the UK). We will accept exposures where we have a branch or local banking subsidiary and tolerate exposures to other countries where we have developed a local understanding and capability or we are facilitating a transaction for a client.	Positioning at 31 March 2024 We maintained this risk tolerance level in place throughout the year.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS CONTINUED

Link to strategy – key

Connected client

ecosystems

Growth

initiatives

Optimisation of

returns

Entrepreneurial

culture

Digitalisation

Strategic use of

data



Sustainability risk (including climate and ESG)		The risk that our lending and investment activities give rise to unintended climate, environmental, social and economic consequences


Link to strategy and opportunities		Monitoring and mitigation activities • Investec has a holistic approach to sustainability, and supports the precautionary approach to sustainability management, guided by international best practices regarding the responsibilities of the financial sector in financing and investing transactions • This approach runs beyond recognising the Group’s own footprint on the environment and is based on a broader responsibility to the environment and society • We recognise the complexity and urgency of climate change. We are committed to supporting the transition to a clean and energy efficient world while preserving our planet and the wellbeing of our people • The Group ESG Executive Committee, mandated by the Group’s Executive Directors, reports relevant sustainability-related matters to the DLC SEC and Group ERC. The main objectives of the committee are to coordinate sustainability-related efforts across geographies and businesses • Accordingly, sustainability risk considerations are considered by the relevant credit committee or investment committee when making lending or investment decisions • Investec’s climate change position statement stems from the belief that one of the greatest socio- economic impacts we can have is to partner with our clients and stakeholders to accelerate a cleaner, more resilient and inclusive world • Our environmental policy considers the risks and opportunities that climate change and nature degradation present to the global economy • We have linked sustainability-related metrics and KPIs to Executive Director compensation.


More information
	Read more on pages 165, 184 and 185 and pages 122 to 140 of the Investec Group's 2024 integrated and strategic annual report and the Investec Group’s 2024 sustainability report which is published and available on our website: www.investec.com

		Risk appetite and tolerance metric It is important to consider potential financial risk that could result from unmanaged sustainability-related risks. We are continually monitoring best practice in this area and will continue to develop and enhance our approach over time. We take a cautious approach with respect to industries falling in our high-risk ESG categories that are known to have negative environmental (including climate) and societal consequences. Our targets around fossil fuel activities can be found in our published fossil fuel policy on our website. Further detail around our zero tolerance activities can be found in the Investec Group’s 2024 sustainability report.	Positioning as of 31 March 2024 We maintained this risk tolerance level in place throughout the year.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS CONTINUED

Link to strategy – key

Connected client

ecosystems

Growth

initiatives

Optimisation of

returns

Entrepreneurial

culture

Digitalisation

Strategic use of

data



Investment risk		Investment risk arises where the Group invests in unlisted companies and select property investments, as well as certain listed investments (predominantly relating to Ninety One) with risk taken directly on the Group’s balance sheet


Link to strategy and opportunities		Monitoring and mitigation activities • Independent credit and investment committees in the UK provide oversight of regions where we assume investment risk • Risk appetite limits and targets are set to limit our exposure to equity and investment risk • As a matter of course, concentration risk is avoided and investments are well spread across geographies and industries.



Further information
	Read more on page 186 .

		Risk appetite and tolerance metric We have moderate appetite for investment risk, and set a risk tolerance of less than 30% of CET1 capital for our unlisted principal investment portfolio.	Positioning at 31 March 2024 Our unlisted investment portfolio amounted to £246 million, representing 11.0% of CET1.



Market risk in the trading book		Traded market risk is the risk of potential value changes in the trading book as a result of changes in market factors such as interest rates, equity prices, commodity prices, exchange rates, credit spreads and the underlying volatilities where derivatives are traded. The trading book is defined as positions in financial instruments and commodities, including derivative products and other off-balance sheet instruments that are held within the trading businesses


Link to strategy and opportunities		Monitoring and mitigation activities • To identify, measure, monitor and manage market risk, we have independent market risk management teams • The focus of our trading activities is primarily to support our clients. Our strategic intent is that proprietary trading should be limited and that trading should be conducted largely to facilitate client flow • Within our trading activities, we act as principal with clients or the market. Market risk exists where we have taken on principal positions resulting from market making, underwriting and facilitation of client business in the foreign exchange, interest rate, equity, credit and commodity markets • Measurement techniques used to quantify market risk arising from our trading activities include sensitivity analysis, Value at Risk (VaR), stressed VaR (sVaR), expected shortfall (ES) and extreme value theory (EVT). Stress and scenario analyses are used to add insight to possible outcomes under severe market disruptions.



Further information
	Read more on pages 188 to 191 .
	Read more on pages 188 to 191 .
		Risk appetite and tolerance metric Market risk arises through our trading activities which are primarily focused on supporting client activity. Appetite for proprietary trading is limited. We set an overall tolerance level of a one-day 95% VaR of less than £3.5 million.	Positioning at 31 March 2024 We met these internal limits; one- day 95% VaR was £0.2 million at 31 March 2024.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Liquidity risk		Liquidity risk refers to the possibility that, despite being solvent, we have insufficient capacity to fund increases in assets or are unable to meet our payment obligations as they fall due, in normal and stressed conditions. This includes repaying depositors or maturing wholesale debt. This risk arises from mismatches in the timing of cash flows, and is inherent in all banking operations and can be impacted by a range of institution-specific and market-wide events


Link to strategy and opportunities		Monitoring and mitigation activities • Our banking entity in the UK is ring-fenced from the Investec Group's banking entity in South Africa and is required to meet the UK regulatory liquidity requirements • Each geographic entity must be self-sufficient from a funding and liquidity standpoint • Investec plc undertakes an annual Internal Liquidity Adequacy Assessment Process (ILAAP) which documents the approach to liquidity management across the firm, including IBP (solo basis). This document is reviewed and approved by IBP BRCC, DLC BRCC and by the IBP and DLC Boards • We maintain a liquidity buffer in the form of unencumbered cash, government or rated securities (typically eligible for repurchase with the central bank), and near cash well in excess of the regulatory requirements as protection against unexpected disruptions in cash flows. We maintain a prudent approach to the mix of instruments in the liquidity buffer to ensure it is available when and where required, taking into account regulatory, legal and other constraints • Daily liquidity stress tests are carried out in order to help accurately measure the liquidity profile and ensure that in the absence of market or funding liquidity during periods of stress, we would continue to meet our obligations • The maintenance of sustainable prudent liquidity resources takes precedence over profitability • We target a diversified funding base, avoiding undue concentrations by investor type, maturity, market source, instrument and currency • Our core loans must be fully funded by stable funding • The Group does not rely on committed funding lines for protection against unforeseen interruptions to cash flow • The balance sheet risk management teams independently monitor key daily funding metrics and liquidity ratios to assess potential risks to the liquidity position, which further act as early warning indicators of potential normal market disruptions • Investec plc maintains a contingency funding and recovery plan designed to protect depositors, creditors and shareholders and maintain market confidence during adverse liquidity conditions. This document is reviewed and approved by IBP BRCC, DLC BRCC and by the IBP and DLC Boards.



Further information
	Read more on pages 192 to 196 .
	Read more on pages 192 to 196 .
		Risk appetite and tolerance metric We carry a high level of liquidity in all our banking subsidiaries in order to be able to cope with shocks to the system, targeting a minimum cash and near cash to customer deposit ratio of 25%.	Positioning at 31 March 2024 Total cash and near cash balances amounted to £9.7 billion at year end representing 46.4% of customer deposits.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Interest rate risk in the banking book (IRRBB)		IRRBB arises from the impact of adverse movements in interest rates on both net interest earnings and economic value of equity. IRRBB is an inherent consequence of conducting banking activities, and arises from the provision of retail and wholesale (non- trading) banking products and services


Link to strategy and opportunities		Monitoring and mitigation activities • The daily management of IRRBB is centralised within the Treasury of each banking entity and is subject to local independent risk and local Asset and Liability Committee (ALCO) review • Together with the business, the treasurer develops strategies regarding changes in the volume, composition, pricing and interest rate characteristics of assets and liabilities to mitigate the interest rate risk and ensure a high degree of net interest margin stability over an interest rate cycle. These are presented, debated and challenged in the Liability Product and Pricing Forum and the ALCO • Each banking entity has its own Board-approved IRRBB policy and risk appetite, which is clearly defined in relation to both income risk and economic value risk • The policy dictates that long-term (>one year) IRRBB is materially eliminated. Where natural hedges between banking book items do not suffice to reduce the exposure within defined limits, interest rate swaps are used to transform fixed rate assets and liabilities into variable rate items • IRRBB is measured and analysed by utilising standard tools of traditional interest rate repricing mismatch and net present value (NPV) sensitivity to changes in interest rate risk factors.



Further information
	Read more on pages 195 to 196.
	Read more on pages 195 to 196.
		Risk appetite and tolerance metric A movement in rates can result in a negative impact on revenues across the banking industry. This risk is managed within the Group's risk appetite framework as a proportion of capital and net interest income in order to limit volatility.	Positioning at 31 March 2024 Investec plc is within these tolerance metrics. The UK regulatory framework requires banks to assess their Pillar II requirements, including those related to IRRBB, as part of systems and processes included in their ICAAP.



Capital risk		The risk that we do not have sufficient capital to meet regulatory requirements or that capital is inefficiently deployed across the Group


Link to strategy and opportunities		Monitoring and mitigation activities • Investec plc's approach to capital management utilises both regulatory capital as appropriate to the jurisdiction in which it operates and internal capital, which is an internal risk-based assessment of capital requirements • A detailed assessment of the regulatory and internal capital position is undertaken on an annual basis and is documented in the Internal Capital Adequacy Assessment Process (ICAAP). The ICAAP is reviewed by PLC and DLC Capital Committees before being recommended for approval to DLC BRCC and the Board • The determination of target capital is driven by our risk profile, strategy and risk appetite, taking into account the regulatory and market factors applicable to the Group • At the most fundamental level, we seek to balance our capital consumption between prudent capitalisation in the context of the Group’s risk profile and optimisation of shareholder returns • Our internal capital framework is designed to manage and achieve this balance • The framework has been approved by the Board. The Investec plc Capital Committee is responsible for assisting the DLC Capital Committee (mandated by DLC BRCC) for the oversight and management of capital and leverage. • The leverage ratio is considered and monitored as part of the capital management framework.



Further information
	Read more on pages 200 to 205 .
	Read more on pages 200 to 205 .

		Risk appetite and tolerance metric We intend to maintain a sufficient level of capital to satisfy regulatory requirements and our internal target ratios. We target a Total Capital ratio range of between 14% and 17% on a consolidated basis for Investec plc and we target a minimum Tier 1 ratio of >11% and a CET1 ratio of >10%. We are a lowly leveraged firm and target a leverage ratio in excess of 6%.	Positioning at 31 March 2024 Investec plc met all these targets. The leverage ratio is 10.0%.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Reputational risk		Reputational risk is damage to our reputation, name or brand. Reputational risk is often associated with strategic decisions made and also arises as a result of other risks manifesting and not being appropriately mitigated or managed


Link to strategy and opportunities		Monitoring and mitigation activities • We have various policies and practices to mitigate and/or manage reputational risk, including strong values that are regularly and proactively reinforced • Reputational risk is mitigated and/or managed as much as possible through detailed processes and governance/escalation procedures from business units to the Board, and from regular, clear communication with shareholders, customers and all stakeholders • The Group has a disclosure and market communications policy which is reviewed and approved annually by Group ERC and DLC BRCC.



Further information
	Read more on page 80 of the Investec Group's 2024 risk and governance report.

		Risk appetite and tolerance metric We have a number of policies and practices in place to mitigate and/or manage reputational risks.	Positioning at 31 March 2024 We have continued to mitigate and/or manage these risks where possible throughout the year.



Business and strategic risk		Business and strategic risk relates to external market factors that can create income volatility


Link to strategy and opportunities		Monitoring and mitigation activities • The risk of loss caused by income volatility is mitigated through diversification of income sources, reducing concentration of income from any one type of business or geography and maintaining a flexible cost base • Group strategy is directed towards generating and sustaining a diversified income base for the Group • In the instance where income falls, we retain the flexibility to reduce costs (particularly variable remuneration), thereby maintaining a competitive cost to income ratio.



Further information
	Read more on pages 8 to 100 of the Investec Group's 2024 integrated and strategic annual report and pages 82 to 85 of the Investec Group’s 2024 year-end results booklet.

		Risk appetite and tolerance metric The Investec Group aims to build a sustainable business generating sufficient return to shareholders over the longer term and seeks to maintain strict control over fixed costs. The Investec Group announced new medium-term* targets in May 2024, resulting from the structural improvement of performance following the execution of the strategy announced at the February 2019 Capital Markets Day (CMD). The combination with Rathbones resulted in a c.2% reduction in return on equity (ROE) given the higher equity base, technically adjusting the previous 11% to 15% target range to 9% to 13%. With this in mind the Investec Group now has a revised medium-term* ROE target range for its UK and Other operations of 10% to 14%, and a new return on tangible equity (ROTE) target range of 13% to 17%. We have also revised the medium-term* cost to income ratio target to below 58%, partly reflecting the c.7% benefit from IW&I UK deconsolidation.	Positioning at 31 March 2024 The Investec Group’s UK and Other operations reported a ROE of 12.8%, a ROTE of 15.7% and a cost to income ratio of 54.4%^. Investec plc’s cost to income ratio was 54.5%^.

• Revised medium-term targets to 31 March 2027.

^Calculated on a pro-forma basis. See page 10 and page 72 of the Investec Group's 2024 integrated and strategic annual report.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk		Operational risk is defined as the potential or actual impact to the Group as a result of failures relating to internal processes, people, systems or from external events. The impact can be financial as well as non-financial such as customer detriment, reputational or regulatory consequences


Link to strategy and opportunities		Monitoring and mitigation activities • The Group manages operational risk through an embedded operational risk management framework • Operational risk sub-types which are significant in nature are managed by dedicated specialist teams within the Group. These operational risk sub-types are addressed in specific, detailed risk policies and procedures, but are included within the operational risk management framework and are reported and monitored within the operational risk appetite. These sub-types include: – Business disruption and operational resilience risk – Conduct risk (including Consumer Duty) – Data management risk – Financial crime risk – Fraud risk – Information security and cyber risk – Legal risk – Model risk – People risk – Physical safety and security risk – Processing and execution risk – Regulatory compliance risk – Tax risk – Technology risk – Third party risk.



Further information
	Read more on pages 197 to 198 and pages 81 to 84 of the Investec Group’s 2024 risk and governance report.

		Risk appetite and tolerance metric We monitor the level of acceptable operational risk exposure/loss through qualitative and quantitative measures.	Positioning at 31 March 2024 The Group continued to monitor operational risk exposures and losses against the tolerance levels with appropriate escalation and action where required.



Operational risk – Business disruption and operational resilience risk		The risk associated with disruptive incidents which may impact important business services and critical functions/resources including processes, premises, staff, equipment, third party services and systems


Link to strategy and opportunities		Monitoring and mitigation activities • The Group maintains continuity through appropriate resilience strategies that cater for disruptions, irrespective of the cause • These strategies include, but are not limited to, relocating the impacted business to alternate processing sites, enabling staff to work from home, the application of high availability technology solutions, obtaining third party dependency business continuity assurances and ensuring readiness of physical solutions for critical infrastructure components • Resilience testing is conducted annually to validate continuity strategies and ensure they remain effective and appropriate. This includes annual recovery testing for all key systems that support important/critical business services.



Further information
	Read more on pages 197 to 198 .



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk – Conduct risk		The risk associated with inappropriate behaviours or business activities that may lead to client, counterparty or market detriment, erosion of Investec values, culture and ethical standards expected of its staff, reputational and/or financial damage to the Group


Link to strategy and opportunities		Monitoring and mitigation activities • Our approach to conduct risk is driven by our values and philosophy, ensuring that the Group operates with integrity and puts the wellbeing of its customers at the heart of how the business is run • The conduct risk policy is designed to create an environment for consumer protection and market integrity within the business, supported with the right conduct risk management framework • Consumer Duty rules and guidance set higher and clearer standards of consumer protection across financial services and require institutions to put their customers’ needs first. These requirements have been incorporated into conduct risk policies, frameworks and governance arrangements • Risk and Conduct Forums have the objective of ensuring that the Group maintains a customer- focused and fair outcomes-based culture • There is regular conduct risk reporting to relevant ERC, BRCC and Board committees.



Further information
	Read more on pages 197 , 198 and pages 81 and 82 of the Investec Group's 2024 risk and governance report.



Operational risk – Data management risk		The risk associated with poor governance in acquiring, processing, storing and protecting data. Issues with data quality, reliability or corruption can adversely impact business decisions, client services and financial reporting


Link to strategy and opportunities		Monitoring and mitigation activities • The Group drives robust data management practices and ownership of data across the business, including modelling and architecture, reference data, master data, meta data and reporting of data quality incidents to ensure data integration and interoperability • Adoption of necessary data management tooling is in place for data consolidation, storage and reporting • Data flows and reconciliations are automated as far as possible and integration between systems is streamlined to reduce the need for manual tasks, minimise data processing delays and limit single points of failure • Data quality is monitored, reported and enhanced in line with business needs and regulatory principles • Predictive analytics and data insights are utilised to support proactive risk management • Data retention and destruction processes are designed to meet business needs and comply with applicable legal obligations.



Further information
	Read more on pages 197 to 198 .
	Read more on pages 197 to 198 .



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk – Financial crime risk		The risk associated with the possibility of handling proceeds of crime, financing of terrorism, proliferation financing, sanctions breaches and bribery or corruption, as well as any related regulatory breaches


Link to strategy and opportunities		Monitoring and mitigation activities • Established policies, procedures and controls are in place to promote business with clients in such a manner that minimises exposure to money laundering and terrorist or proliferation financing, sanction breaches, bribery or corruption • Regular training is provided to staff members to create awareness to identify and report suspicion of money laundering and terrorist or proliferation financing • A risk-based approach supports these objectives, while complying with the Group’s regulatory compliance obligations. At a high level the control framework ensures that: – Sufficient information about clients is obtained – All clients and prospective clients are risk rated and verification commensurate with their risk profile is conducted – All prospective and existing clients and relevant related parties are screened against relevant lists (including applicable sanctions list) to identify increased financial crime risk – Suspicious transactions and terrorist or proliferation financing are identified and reported – Existing and prospective clients that are not within the Group’s financial crime risk appetite are exited or declined – An independent integrity (whistleblowing) line is in place to ensure that staff can report regulatory breaches, allegations of fraud, bribery and corruption, and non-compliance with policies • There is regular reporting to the DLC Audit Committee, DLC BRCC as well as Group ERC.



Further information
	Read more on pages 197 , 198 and page 83 of the Investec Group's 2024 risk and governance report.



Operational risk – Fraud risk		The risk associated with any kind of criminal conduct arising from fraud, corruption, theft, forgery and misconduct by staff, clients, suppliers or any other internal or external stakeholder


Link to strategy and opportunities		Monitoring and mitigation activities • The Group manages internal and external fraud risk through an integrated framework which includes global policies, standards and methodologies • Detection and prevention systems are utilised to help identify potential fraud, reaching out to clients where appropriate to validate or discuss concerns • Fraud risk assessments are conducted to proactively identify and map existing preventative and detective controls to the relevant fraud risks to ensure effective mitigation • Fraud prevention and detection controls are enhanced on an ongoing basis in response to regulatory requirements and increased fraud losses across the industry due to existing and new fraud modus operandi • Industry collaboration assists with fraud prevention efforts and the recovery of funds that have been paid away • Adherence to fraud prevention policies is proactively monitored • Practices which comply with updated regulations, industry guidance and best practice are embedded within the Group • Awareness of existing and horizon fraud threats is created through internal training and education of clients and intermediaries on fraud prevention and detection.



Further information
	Read more on pages 197 and 198 .



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk – Information security and cyber risk		The risk associated with unauthorised access, use, disclosure, modification or destruction of information assets, including cyber threats to the Group’s operations and data


Link to strategy and opportunities		Monitoring and mitigation activities • In light of the broad range of risks to which information resources are exposed, this risk is managed by addressing both internal and external threat exposures • Internal threats relate to data theft, inappropriate access or confidentiality breaches by staff – These are mitigated by implementing risk-appropriate data protection controls to safeguard information assets in line with data sensitivity and business criticality – Access to systems and data is closely controlled, regularly reviewed, and adapted to changing roles across the business – Privileged IT access is restricted and administrative accounts are protected by robust authentication technologies – A dedicated insider threat team drives proactive discovery of confidential data and leverages targeted monitoring to identify and respond to potential data loss events – Ongoing security training to all staff ensures high level of awareness and vigilance, augmented by tailored training for specific audiences and risks • External threats relate to cyberattacks such as ransomware, denial of service and cyber fraud – These are mitigated by an adaptive cyber strategy that evolves with the changing cyber threat landscape and integrates prediction, prevention, detection and response capabilities – Robust security controls and advanced technologies are deployed to provide multiple layers of protection against sophisticated attacks – Cyber risk is actively monitored by a 24/7 global cyber team and threat intelligence services, and security incident response processes are continuously tested and improved – Cyber controls are stress-tested through security assessments, attack simulations and executive cyber exercises, run both internally and in conjunction with independent specialists – To support continuous improvement, we engage in maturity benchmarking against industry peers and monitoring through leading cyber rating platforms – Periodic updates to the Board keep them abreast of the threat landscape and informed on the Group’s security position • In response to the potential impact of artificial intelligence and its use for criminal purposes, the Group is actively engaged in deep fake research and proactive mitigation efforts, including threat simulations to test our ability to detect and prevent deepfake attacks, and targeted awareness for staff and clients • Information security and cyber risk are reported to the DLC IT and Risk and Governance Committee with material issues escalated to IBP and DLC BRCCs.



Further information
	Read more on pages 197 and 198 .



Operational risk – Legal risk		The risk associated with losses resulting from any of our rights not being fully enforceable or from our obligations not being properly performed. This includes our rights and obligations under contracts entered into with counterparties. Such risk is especially applicable where the counterparty defaults and the relevant documentation may not support the anticipated rights and remedies in the transaction


Link to strategy and opportunities		Monitoring and mitigation activities • Members of the legal risk function are mandated to ensure we keep abreast of developments and changes in the nature and extent of our activities, and to benchmark our processes against best practice • There is a central independent in-house legal team with embedded business unit legal officers where business volumes or needs dictate • The legal risk function is supplemented by a pre-approved panel of third party legal firms to be utilised where necessary • The key principles of the legal risk policy describe the overall responsibility of the legal risk function, outline how legal risks are to be assessed and how material legal risks should be reported and escalated where necessary • The Group maintains adequate insurance to cover key insurable risks • The Group may, a its discretion, constitute dedicated committees to deal with specific legal matters.



More information
	Read more on page 80 of the Investec Group's 2024 risk and governance report.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk – Model risk		The risk associated with the adverse consequences that arise from decisions based on incorrect or misused model outputs (including reports). Material sources of model risk include: credit model risk, liquidity model risk, trading book model risk and IRRBB model risk


Link to strategy and opportunities		Monitoring and mitigation activities • The Group manages model risk through embedded, risk specific frameworks and policies • Model governance forums employ a set of mechanisms such as monitoring packs, regular reviews (depending on risk), model validations and overlays to manage this risk • The frameworks address roles and responsibilities, governance processes and committees and approaches to managing and monitoring model risk • All models are recorded in a model inventory, which tracks approval status, most recent validation date, ongoing issues, caveats/recommendations in relation to model use, as well as the model validation reports • Models are subject to independent initial and then regular validation by specialist risk teams; the frequency and scale of which is determined by their assessed risk • The relevant committees are mandated to oversee model risk and have delegated further oversight and approval to appropriate sub-committees.



Further information
	Read more on pages 197 and 198 .



Operational risk – People risk		The risk associated with the inability to recruit, develop, retain and engage diverse talent across the organisation and remain aligned to the Investec culture and values


Link to strategy and opportunities		Monitoring and mitigation activities • Our people and organisation team plays a critical role in assisting the business to achieve its strategic objectives, which are matched to learning strategies and market trends • The people and organisation team also works with leadership to strengthen the culture of the business, ensure its values are lived, build capability and contribute to the long-term sustainability of the organisation • The people and organisation team is mandated to enable the attraction, recruitment, development and retention of talent who can perform in a manner consistent with our culture and values • We focus on building a strong, diverse and capable workforce by providing a workplace that stimulates and rewards distinctive performance • Investec invests significantly in opportunities for the development of all employees, and in leadership programmes to enable current and future leaders of the Group • Internal mobility is a key element for our people strategy, it drives succession, supports our One Investec Group strategy and is a valuable retention mechanism.



Further information
	Read more on pages 132 and 133 of the Investec Group's 2024 integrated and strategic annual report and the Investec Group’s 2024 sustainability report which is published and available on our website: www.investec.com



02	Risk management and governance	Investec plc Annual Financial Statements 2024

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Operational risk – Processing and execution risk		The risk associated with the failure to process, manage and execute transactions and/or other processes (such as change) completely, accurately and timeously due to human error or inadequate process design or implementation


Link to strategy and opportunities		Monitoring and mitigation activities • The Group seeks to minimise process failures or human error which can disrupt operations or impact delivery of services to clients • Policies, processes, procedures and key monitoring controls which mitigate against control failures are implemented to protect clients, markets and the Group from detriment • We manage operational capacity to meet client and industry needs and continue to explore automation to improve efficiency and reduce human error • Key business processes are regularly reviewed and the relevant risks assessed through the risk and control self-assessment process • Material change is managed through dedicated projects with formalised project governance.



Further information
	Read more on pages 197 and 198 .



Operational risk – Regulatory compliance risk		The risk associated with changing legislation, regulation, policies, voluntary codes of practice and their interpretation in the markets in which we operate


Link to strategy and opportunities		Monitoring and mitigation activities • The Group remains focused on achieving the highest levels of compliance with applicable legislation and/or regulation, professional standards and integrity in each of our jurisdictions • Our culture is a major component of our compliance framework and is supported by robust frameworks, policies, processes and talented professionals who ensure that the interests of our stakeholders remain at the forefront of everything we do • An independent integrity (whistleblowing) line is in place to ensure that staff can report regulatory breaches, allegations of fraud, bribery and corruption, and non-compliance with policies • There are independent compliance, legal and risk management functions in each of our core operating jurisdictions, which ensure that the Group implements the required processes, practices and policies to adhere to applicable regulations and legislation.



Further information
	Read more on pages 197 , 198 and page 81 of the Investec Group’s 2024 risk and governance report.



Operational risk – Tax risk		The risk associated with inadequate tax planning, transaction execution, tax compliance and reporting failures


Link to strategy and opportunities		Monitoring and mitigation activities • The Group’s control environment for the management and mitigation of tax risk includes a formalised tax strategy, framework, policy and processes • The Group ensures that all transactions and financial products and services are commercially motivated • All advisory and tax planning work is conducted in accordance with the relevant tax laws, regulations and intentions of legislators of the country in which the Group operates.



Further information
	Read more on pages 197 , 198 and pages 83 and 84 of the Investec Group's 2024 risk and governance report.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS CONTINUED

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Operational risk – Technology risk		The risk associated with disruption to or malfunction of critical IT infrastructure, systems or applications that support key business processes and client services


Link to strategy and opportunities		Risk management and key mitigating actions • The technology environment is proactively monitored for continuous visibility of operational performance and availability • Mature incident management processes and continuity plans support a resilient technology environment that is able to respond to disruption and minimise interruption to business services • A defined and business-aligned strategy directs implementation of new technologies to enhance resilience, scalability and modernise legacy systems • Internal controls are automated where possible and augmented with monitoring to reduce human error and enhance efficiency • Technology governance structures provide oversight of IT projects and new investments in infrastructure and software.



Further information
	Read more on page 197 and 198 .



Operational risk – Third party risk		The risk associated with the reliance on and use of external providers of services to the Group


Link to strategy and opportunities		Risk management and key mitigating actions • Third party policies and practices govern the assessment, selection, approval and oversight of third party services • A third party management team has been established to coordinate, streamline and enhance consistency of third party processes across the Group, supported by a centralised vendor management platform • Robust due diligence processes are in place to evaluate third party suitability, resilience and controls with the appropriate level of rigour based on the scale, complexity and service materiality • Service disruption or security risks that third parties may introduce are identified and managed • Ongoing monitoring ensures that contractual obligations are met and required service levels are maintained • Appropriate supplier business contingency plans, including exit strategies for key/critical vendors, are established and managed to minimise client impact following any disruption in service • Investec places significant importance in adhering to the relevant laws and regulations related to third parties, including third parties' policies on modern slavery. These are carefully reviewed by specialist teams and any potential concerns escalated where appropriate • Regular monitoring is conducted to maintain an understanding of our strategic partnerships with technology service providers and that of any fourth party providers.



Further information
	Read more on pages 197 and 198 .

Emerging and other risks

Emerging risks have been identified are highlighted on pages 25 and 26 of the Investec Group's 2024 risk and governance report

and should be read in the context of our approach to risk management and our overall Investec Group risk appetite framework


	Additional risks and uncertainties not presently known to us or that we currently deem immaterial may in the future also negatively impact our business operations. Emerging and other risks are factored into the Board’s viability assessment. Read more on page 60.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

PRINCIPAL RISKS CONTINUED



			High quality audit and assurance services are essential for trusted financial information.


			Zarina Bassa Chair of the Investec plc Audit Committee

Introduction

I am pleased to present the Investec plc

Audit Committee (the Committee) report

for the financial year ended

31 March 2024 which provides details on

how we accomplished our statutory

obligations, as well as the Key Audit and

Other Matters we considered.

The Committee has further discharged its

responsibilities and provided assurance

on the integrity of the 2024 annual report

and financial statements.

Role of the Committee

We provide independent challenge and

oversight across the Group’s financial

reporting and internal control practices.

The Board has delegated the following

key functions to the Committee:

• Overseeing and ensuring the integrity

of the Group’s financial reporting

process. This includes additional

scrutiny of the accounting for significant

transactions and assessing the impact

and cause of restatements of prior year

financial statements

• Satisfying itself that significant

judgements made by management

during the Group’s financial reporting

process are sound and reasonable

• Dealing with concerns, if any, from

outside the Group regarding the

application of accounting principles and

external reporting

• Review the effectiveness of the Group’s

internal control environment and

assurance processes

• Managing and overseeing the

performance, conduct, quality and

effectiveness of the Group’s internal

audit functions

• Reviewing the annual work plan,

capacity, scope and staffing and

independence of internal audit

• Overseeing Group compliance functions

• Overseeing the Group’s subsidiary audit

committees, including in remote locations

• Appointing, managing and overseeing

the relationship with the Group’s

external auditor, including the audit

scope, fees, quality control,

effectiveness and independence of the

external audit function

• Managing the policy, fees and the

nature of non-audit services provided

by the external auditor

• Managing the appropriateness of the

design and effectiveness of the

combined assurance model which

incorporates the various disciplines of

Risk Management, Operational Risk,

Legal, Regulatory, Compliance, internal

audit, external audit and other

assurance providers

• Oversight of the processes in the

Group that culminate in the Group Chief

Executive (Group CE) and Group

Financial Director (Group FD) control

attestation to the JSE at an Investec

DLC level.


	The Committee’s terms of reference can be found at www.investec.com.

Committee composition, skills,

experience and operation

The Committee is comprised entirely

of independent Non-Executive Directors

who meet predetermined skills, competency

and experience requirements as

determined by the DLC Nomdac.

The members continuing independence,

as well as their required skill,

competencies and experience is

assessed annually.

Philisiwe Sibiya has not made herself

available for re-election to the Board at

the August 2024 AGM, in order to focus

on her own businesses.

In March 2024, Diane Radley was

appointed to the Committee following her

appointment as a Non-Executive Director

to the Investec plc Board. Following my

retirement at the August 2024 AGM,

Diane will assume the role of Chair of the

Committee.


	Further details of the experience of the members can be found in their biographies on pages 146 to 149 of the Investec Group’s 2024 integrated and strategic report.

The Group CE, Group FD, Group Chief

Operating Officer (Group COO), Group

Chief Risk Officer (Group CRO), Head of

Internal Audit, Chief Compliance Officer

and representatives from the external

auditor are invited to attend all meetings.

Other members of management, including

Tax and business unit heads, are invited to

attend meetings to provide the Committee

with greater insights into specific issues or

areas of the Group.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT

The Chair has regular contact with the

Group Executive Team to discuss and gain

broader insight on relevant matters directly.

The internal and external auditors have

direct access to the Chair, including

closed sessions with the Committee

without management present, on any

matter that they regard as relevant to the

fulfilment of the Committee’s

responsibilities.


	Members	Meetings attended/Eligible to attend
	Zarina Bassa (Chair)	11/11
	Vanessa Olver	11/11
	Diane Radley1	1/1
	Philisiwe Sibiya	11/11

1. Diane Radley was appointed as a member of the

Committee effective 06 March 2024

Structure of the Investec

Group Audit Committees

In terms of the DLC structure, the DLC

Board has mandated authority to the DLC

Audit Committee to be the Audit

Committee of the Group. The DLC Audit

Committee oversees and considers

Group audit-related matters. It has

responsibility for audit-related matters

that are common to Investec plc and

Investec Limited and works in

conjunction with these two committees

to address all Group reporting.

The Investec plc Board, Investec Limited

Board, Investec Wealth & Investment

International Board, Investec Bank plc

Board and Investec Bank Limited Board

have mandated authority to their

respective audit committees to be the

audit committees for the respective

companies and their subsidiaries.

The Committee receives regular reports

from the Group’s subsidiary audit

committees as part of the oversight of

subsidiary audit committees.

The Chair is also the Chair of the

following audit committees:

• Investec DLC

• Investec Limited

• Investec Bank Limited

• Investec Bank Mauritius (IBM)

• Investec Wealth and Investment

International.

The Chair is also a member of the

following audit committees:

• Investec Bank plc

• Investec Life

• Investec Wealth and Investment UK

(up to the date of the Rathbones

transaction).

The Chair attends the following

committee meetings:

• Operational Risk Committee, as a

white card holder

• DLC IT Risk and Governance

Committee.

The DLC IT Risk and

Governance Committee

The DLC IT Risk and Governance

Committee is responsible for ensuring

that technology risk management

processes, investments, operations and

governance, including control

enhancement matters, support the

purpose, values and strategic goals of

the Group. The DLC IT Risk and

Governance Committee reports to both

the DLC Board Risk and Capital

Committee (BRCC) and the DLC Audit

Committee and is attended by the DLC

Audit Committee and DLC BRCC Chairs.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED

Areas covered by the Investec plc Audit Committee

Key audit matters (KAM)

KAM are those matters that in the view of the Committee:

• Required significant focus from the Committee

• Were considered to be significant or material in nature, requiring exercise of judgement; or

• Matters which were otherwise considered to be subjective or complex from an accounting or auditing perspective.

Common membership of the DLC, Investec plc and Investec Limited Audit Committees ensures that KAM and matters of mutual

interest are communicated and addressed, where applicable. The members of the Committee may also attend other Audit

Committee meetings, as appropriate.

The following key audit matters were deliberated by the Committee during the year:


	Key audit matters		What we did
	Expected credit losses (ECL) assessment • The appropriateness of the allowance for ECL is highly subjective and judgemental.		• Challenged the level of ECL, model methodology and assumptions applied to calculate the ECL provisions held by the Group • Reviewed the appropriateness of the ECL models and approved the forward-looking macro-economic scenarios applied in the UK • Reviewed and monitored the Group’s calculation of ECLs, trends in staging changes, model changes, scenario updates, post-model adjustments, Significant Increase in Credit Risk (SICR), and volatility • Reviewed and satisfied ourselves on in-model adjustments • Reviewed and satisfied ourselves on staging of key exposures • Reviewed for reasonableness the benchmarking of macro-economic scenarios, ECLs, Credit Loss Ratio (CLR) and coverage ratios against relevant UK peers • Assessed the appropriateness of the ECL model overlays maintained for emerging risks for which there was insufficient data available to model the existing credit risk. Specific consideration was given to the methodology and assumptions applied to calculate the overlay. We further evaluated the appropriateness of the releases of the ECL model overlays • Assessed ECL experienced against forecasts and considered whether the level of ECL was appropriate • Assessed the appropriateness of the ECL provision raised by the Group for large exposures in entities publicly perceived to be in financial distress, in conjunction with BRCC • Evaluated the International Financial Reporting Standard (IFRS® Accounting Standards), as issued by the International Accounting Standards Board (IASB) 9 disclosures for relevance and compliance with IFRS® Accounting Standards • Evaluated the impact of ECL on the interim and annual results.
	Fair value of level 3 instruments and the resulting IFRS® Accounting Standards 13 fair value measurement (IFRS 13) disclosure • For level 3 instruments such as unlisted investments in private equity businesses, investment properties, fair value loans and large bespoke derivative structures, there is a large degree of subjectivity surrounding the inputs to the valuations and valuations methodology. With the lack of observable liquid market inputs, determining appropriate valuations continues to be highly judgemental.		• Received presentations on the material investments across the Group, including an analysis of the key judgements, assumptions and valuation methodology applied and approved the valuation adjustments proposed by management for the year ended 31 March 2024 • Challenged and debated significant subjective exposures and assumptions including: – The valuation principles applied for the valuation of level 3 investments (unlisted and private equity investments) and fair value loans – The appropriateness of the IFRS 13 disclosures regarding fair value.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Key audit matters		What we did
	Uncertain tax provisions and other legal matters		• Considered potential legal and uncertain tax matters with a view to ensuring appropriate accounting treatment in the financial statements • Evaluated the appropriateness of the accounting and disclosures regarding the investigation by the Office of the Public Prosecutor in Cologne. This was done by having closed Committee meetings with executive management and external audit. Considered guidance from external and internal legal counsel regarding the recognition, measurement and disclosure of a provision for this matter. Refer to note 49 of the Investec Group’s 2024 annual financial statements for further information • Received regular updates from the Group Executive, Group Tax, Group Finance and Group Legal Counsel on uncertain tax and legal matters to enable the Committee to probe and consider the matters and evaluate the basis and appropriateness of the accounting treatment • Analysed the judgements and estimates made and discussed the potential range of outcomes that might arise to determine the liability, if any, for uncertain tax positions as required by the International Financial Reporting Interpretations Committee (IFRIC) 23 • Reviewed a technical memorandum prepared by management regarding the recognition, measurement and disclosure of the motor vehicle finance industry-wide investigation in the UK. Considered guidance provided by external and internal legal counsel regarding the recognition, measurement and disclosure of the provision. Refer to note 49 of the Investec Group’s 2024 annual financial statements for further information • Concluded on the appropriateness of the International Accounting Standards (IAS) 37 accounting treatment, the scenarios and sensitivities, and any overall disclosure in the financial statements. Refer to note 49 in the Investec Group’s 2024 annual financial statements.
	Restatements of prior year comparative information		• The Committee concluded that the restatements predominantly related to reclassifications of income statement line items or where management elected to restate to achieve better disclosure • Evaluated the causes of the restatements and considered their impact on the effectiveness of the Group’s control environment • Reviewed the appropriateness of the disclosure provided for the restatements. Refer to note 58 in the Investec Group’s 2024 annual financial statements for further information.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Key audit matters		What we did
	Significant transactions		• Reviewed the technical memorandum prepared by Group Finance regarding the accounting treatment and required disclosure for the Rathbones transaction that resulted in the deconsolidation of Investec Wealth and Investment UK (100% held subsidiary) and the recognition of a 41.25% investment in Rathbones plc. Considered and concluded on the appropriateness of the accounting treatment as a discontinued item in terms of IFRS Accounting Standards. Evaluated the appropriateness of the accounting treatment as an associate and valuation of the investment in Rathbones plc at a DLC level and Investec plc level. Considered the impact and addressed the implications of non- coterminous year-ends • Reviewed the disclosure provided for the discontinued operation of Investec Wealth and Investment UK which was deconsolidated. Reviewed the technical memorandum prepared by Group Finance on the application of IFRS 5 regarding discontinued operations • Evaluated the appropriateness of the accounting and disclosure relating to significant judgements and estimates, impairment, valuation methods and assumptions applied.
	Audit firm rotation		• Following conclusion of a competitive tender process conducted in 2023, recommended to the Board the appointment of Deloitte LLP as the External Auditors of Investec plc and Investec Bank plc for the financial year ending 31 March 2025 • Managed the process and oversaw the commencement of the shadow audit process by Deloitte LLP of the Investec plc 2024 financial year audit • Monitored the non-audit services performed by Deloitte LLP during the shadow audit process • Oversaw the allocation of non-audit work to the respective audit firm to ensure that there were no breaches of independence.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED

Other matters considered by the Investec plc Audit Committee

The Committee considered the following matters during the year:


	Other matters		What we did
	Going concern and the viability statement		• Considered reports on the Group’s budgets, forecasts, profitability, capital, liquidity and solvency and the impact of legal proceedings, if any, on both going concern and the three-year Viability Statement • Considered the results of various stress testing analyses based on different economic scenarios and the possible impact on the ability of the Group to continue as a going concern • Considered the impact of strategic corporate actions on the capital plans and the three year Viability Statement • Noted the Investec Bank plc Viability Statement as recommended for approval by the Investec Bank plc Audit Committee to the Investec Bank plc Board • Recommended the approval of the going concern assumption and the Group Viability Statement underlying the annual financial statements to the Investec plc Board.
	Information technology systems, cyber security and controls impacting financial reporting		• Received and reviewed reports in respect of IT systems, cyber security and controls impacting financial reporting • Received regular reports from internal audit on the effectiveness of IT controls tested as part of the internal audit process • Considered broader IT and Governance matters, including security, control improvements, IT strategy and operations through attendance by the Committee and BRCC Chairs at the DLC IT Risk and Governance Committee • Since 2015, Investec has been using Targeted Attack Simulations (TAS) to understand our cyber risk exposure and evaluate the adequacy of our security controls • Met with IT external auditors to discuss the results of the audit of IT systems and controls.
	External audit and audit quality		• Managed the relationship with the external auditor, Ernst & Young LLP • Considered the external audit report on the review performed on the interim results and the audit performed on the annual results • Met with key partners of Ernst & Young LLP prior to every Committee meeting to discuss the 2023/24 audit plan, key areas of focus, findings, scope and conclusions • Pre-approved all non-audit services provided by external audit and confirmed the services to be within the approved non-audit services policy • Discussed external audit feedback on the Group’s critical accounting estimates and judgements, restatements and the control environment • Approved the external audit plan, audit fee and the main areas of focus • Assessed the independence and objectivity of the external auditors • Received updates from the external auditors on the audit of the Annual Financial Statements (AFS) of the Group including the Summary of Audit Differences for the year ended 31 March 2024. The Committee ensured that it was comfortable that the level of unadjusted audit differences were within tolerable error for both actual and judgemental differences and that there was no bias towards over or understatement • Noted and reviewed the unqualified independent audit report in relation to the Group • Met separately with the leadership of Ernst & Young LLP to discuss the reviews by audit regulators ratings and accreditations, independence, firm quality control and the results of internal inspections of the firm and individual partners • The Committee confirms its satisfaction with the performance and quality of external audit, the external auditors and lead partners.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Other matters		What we did
	Regulatory compliance and reporting		• Received regular reports from the Regulatory Compliance functions and reviewed the adequacy of the scope and the effectiveness of the regulatory compliance processes applied. This included the evaluation of the quality of regulatory reporting, the scope and the integrity of the regulatory compliance process, the adequacy of internal regulatory compliance systems and processes, and the consideration and remediation of any findings of the internal and external auditors or regulators • Requested specific updates or presentations from management on areas considered high risk or where exceptions had been identified • Received regular updates from the compliance function in respect of Regulatory Interactions, Risk Ratings and High-Risk exposures, Conduct, Financial Crime, Compliance Monitoring, Training, Anti-Money Laundering (AML) and Combating of Financing of Terrorism (CFT) reviews conducted in respect of Group subsidiaries • Monitored regulatory developments and the potential impact on South Africa and the UK, following the addition of South Africa to the Financial Action Task Force (FATF) greylist in February 2023 • Reviewed the reporting obligations in respect of significant transactions completed during the financial year • Reviewed the reporting obligations of Investec Limited’s acquisition of Investec plc shares.
	Post balance sheet disclosure		• Considered any post balance sheet events that may require the AFS to be adjusted or require additional disclosure. Refer to note 57 in the Investec Group’s 2024 annual financial statements.
	Climate, nature and biodiversity and environmental, social and governance (ESG)		• Reviewed ESG reporting and disclosures • Considered the changing regulatory landscape for all jurisdictions that the Group operates in, including undertaking specific training for the Committee.
	Internal controls • The effectiveness of the overall control environment, the status of any material control issues with emphasis on the progress of specific remediation plans.		• Attended regular meetings of the DLC BRCC. Based on reports presented at those meetings, evaluated the impact of an evolving risk environment, including operational risk, on the internal control environment • Evaluated and tracked the status of the most material control issues identified by internal and external audit and tracked the progress of the associated remediation plans against agreed time frames • Reviewed reports from the independent audit committees of the Group’s subsidiaries • Evaluated the impact of working from home on the overall control environment and operational risk • Evaluated reports on the internal control environment from the internal and external auditors with specific emphasis on culture and conduct elements in the internal audit reports • Attended and received regular reports from the DLC IT Risk and Governance Committee regarding the monitoring and effectiveness of the Group’s IT controls. Considered updates on key internal and external audit findings with respect to the IT control environment • Reviewed and approved the combined assurance model, ensuring completeness of risks and adequacy and effectiveness of assurance coverage • Evaluated reports on cyber security within the Group and received a presentation on the outcome of the 2023/24 TAS • Noted internal audit reports and conclusions on internal controls, internal financial controls and the risk management framework for the year under review • Reviewed the year-end conclusions from internal audit on internal controls, the risk management framework and internal financial controls based on their planned and actual audit coverage for the year.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Other matters		What we did
	Combined assurance matrix		• Confirmed our satisfaction with the appropriateness of the design and effectiveness of the combined assurance model applied, which incorporates the various disciplines of Risk Management, Operational Risk, Legal, Regulatory Compliance, internal audit, external audit and other assurance providers • Confirmed our satisfaction with the levels of assurance and mitigants so that, taken as a whole, there is sufficient and appropriate assurance regarding mitigants for the key risks • Reviewed the results of the Combined Assurance Matrix (CAM) coverage plan at the year-end to assess the results of actual coverage and conclusions relative to planned coverage for the year. Concluded that the CAM formed an appropriate basis for assurance coverage and outcomes.
	Fair, balanced and understandable reporting • The Group is required by the UK Corporate Governance Code to assess and confirm that its external reporting is fair, balanced and understandable, and consider whether it provides the information necessary for stakeholders to assess the Group’s position and performance, business model and strategy.		• Undertook an assessment on behalf of the Board, to provide the Board with assurance that it can make the statement • Met with senior management to gain assurance that the processes underlying the compilation of the annual financial statements were appropriate • Conducted an in-depth critical review of the annual financial statements and, where necessary, requested amendments to disclosure • Reviewed the accounting treatment of key judgements and the quality of earnings assessment • Considered the appropriateness and the cause of the restatement of the annual financial statements. Reviewed the appropriateness of the remedial plans implemented by management to ensure the cause has been appropriately addressed • Reviewed the appropriateness of the disclosure provided regarding restatements and significant transactions completed during the financial year • Assessed disclosure controls and procedures • Confirmed that management had reported on and evidenced the basis on which representations to the external auditor were made • Obtained input and assurance from the external auditors and considered the level of and conclusion on the summary of audit differences • Reviewed feedback from Group Finance in respect of a project launched to refine the annual financial statements in order to improve disclosures, improve financial control and reporting processes • Concluded that the processes underlying the preparation of the annual report and financial statements for the financial year ended 31 March 2024 were appropriate in ensuring that those statements were fair, balanced and understandable • Reviewed feedback received from analysts in respect of the annual report as provided by Investor Relations and incorporated the feedback into the annual report • Reviewed the outcomes of the combined assurance coverage model as discussed above • Reviewed the annual reports of Investec plc and all significant subsidiaries.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Other matters		What we did
	Business control environment • The effectiveness of the control environment in each individual business, including the status of any material control issues and the progress of specific remediation plans.		• Received regular reports from the subsidiary audit committees, including entities that the Group’s management is operationally responsible for • Attended the audit committee meetings of all significant subsidiaries • Assessed reports on individual businesses and their control environments, scrutinised any identified control failures and closely monitored the status of remediation plans • Received updates from senior management and scrutinised action plans following internal audit findings • Reviewed the process for reporting to the Committee by key subsidiaries and associates and considered regular reports from such entities.
	Finance function		• Considered the financial reporting as prepared by Group Finance regarding the interim results for the period ended 30 September 2023 and final results for the 31 March 2024 year end • In a closed session, discussed and concluded that the finance functions of Investec plc and its subsidiaries were adequately skilled, resourced and experienced to perform the financial reporting for the Group and that appropriate succession was in place for key roles • Concluded that the Group FD, Nishlan Samujh, had the appropriate expertise and experience to meet the responsibilities of the position.
	Compliance with applicable accounting standards		• Reviewed various accounting papers prepared by Group Finance addressing subjective accounting treatments and significant accounting judgements • The Committee chair discussed the key judgements and complex accounting treatments with both external audit and management in the weekly meetings leading up to the year-end sign off • Concluded on the reasonableness of the significant accounting judgements.
	Related party disclosures		• Considered and reviewed related party disclosures for the Group • Considered and reviewed the process followed by Group Finance to ensure the completeness of related party disclosure • DLC Nomdac reviewed key related party transactions during the year and ensured compliance with Investec related party policies.
	Internal audit • The performance of Internal Audit and delivery of the Internal Audit plan, including scope of work performed, the level of resources, the risk assessment methodology and coverage of the internal audit plan • The Committee is responsible for assessing audit quality and the effectiveness of the internal audit function.		• Scrutinised and reviewed internal audit plans, risk assessments, methodology and staffing, and approved the annual plan • Reviewed and approved the Group internal audit charter • Provided input into and considered the annual performance and objectives of the Head of Internal Audit • Monitored delivery of the agreed audit plans, including assessing Internal Audit resources, Continued Professional Development (CPD), succession, core skills development and automation of audit processes • Monitored and followed up internal audit control findings, including IT, and ensured appropriate mitigation and timeous close-out by management • Tracked high and moderate risk findings, and monitored related remediation plans • Met with the Head of Internal Audit prior to each Committee meeting, without management being present, to discuss the remit of and reports of internal audit and any issues arising from the internal audits conducted • Monitored audit quality in relation to internal audit. The methodology, process and skills were presented to a separately convened Audit Committee to consider audit quality



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED


	Other matters		What we did
	Internal audit (continued)		• Discussed and considered the internal audit quality assurance programme. The internal audit quality assurance programme is designed in line with the Institute of Internal Auditors (IIA) International Professional Practices Framework (which includes the International Standards for the Professional Practice of Internal Auditing and the Code of Professional Conduct, including the Code of Ethics). The quality assurance programme is multi-faceted, and includes the attraction, development and retention of adequately skilled staff that exercise proficiency and due professional care, adherence to the Global internal audit governance framework and audit methodology, oversight and detailed review of every audit engagement and a quarterly post- engagement quality assurance programme • Assessed and confirmed our satisfaction with the independence of the Head of Internal Audit for Investec plc, E Broughton • Reviewed the results of the post-engagement quality assurance programme which informs any training interventions required within the team. The results are consolidated and presented to the Audit Committee on an annual basis • IT Audit and Data Analysis – Internal audit developed automated test scripts, allowing for more comprehensive testing of controls covering the full population. This full population testing provides greater coverage than the traditional audit methodology which calls for a sample testing approach. Reviewed and considered the implications of the approach on the audit for the Group • Reviewed the Investec plc written assessment of the overall effectiveness of the organisation’s governance, risk, and control framework, including an assessment of internal financial controls, the risk management framework, adherence to the risk appetite and the effectiveness of the overall assurance achieved relative to that planned for the year through the CAM • Confirmed our satisfaction with the independence and performance of the internal audit function • Assessed and confirmed our satisfaction with the independence of the Head of Internal Audit for Investec plc, E Broughton • Held a closed session regarding internal audit where the capacity, appropriate skills, independence and quality of the internal audit function was assessed • Considered succession and the skills matrix for internal audit • Assessed the effectiveness of the internal audit function through completion of a questionnaire which is based on the Internal Audit Financial Code of Practice. The results of the exercise were shared with the Committee, together with action plans to address any concerns raised, which will be tracked to completion.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED

External audit

Non-audit services

Our policy regarding the engagement of

the external auditor to provide non-audit

services was developed by the

Committee to safeguard auditor

objectivity and independence. The policy

includes guidelines on permitted and

non-permitted services and the approval

process required by the Committee.

Total fees paid for the year ended

31 March 2024 amounted to £8.0 million

(2023: £8.6 million), of which £1.6 million

(2023: £2.4 million) related to the

provision of non-audit services. The non-

audit services related to services

required to be provided by the external

auditor, such as, regulatory audits and

work to be performed as reporting

accountant. Non-audit fees were pre-

approved by the Chair of the Committee

prior to every assignment.

The Committee also required the policy

to be applied to any external services

provided by Deloitte LLP to ensure the

independence of the firm prior to its

appointment as external auditor for the

financial year ending 31 March 2025.

Total Fees

(£m)

Based on the above-mentioned policy,

approval process and reviews performed,

the Committee was satisfied that the

level and type of non-audit work

undertaken throughout the year did not

impair the independence of Ernst &

Young LLP and Deloitte LLP.

Auditor independence and objectivity

and audit quality

Critically evaluated audit quality at an

engagement and firm level, audit

effectiveness, independence and audit

rotation requirements applicable to all

jurisdictions in which the Group operates.

Audit Regulator reviews were considered

at a firm and individual partner level.

Continuity, quality control on assignment

as well as the independence of staff on the

assignment were considered.

The Committee was satisfied that in

reviewing audit quality and independence,

it had followed a comprehensive process

during which detailed feedback was

received and evaluated.

As part of the process:

• The Committee considers the

independence of the external auditors

on an ongoing basis

• The external auditor confirmed their

independence and were requested to

review and confirm the level of staff

transactions with Investec, if any, to

ensure that all auditors on the Group

audit meet the independence criteria

• The key audit partners are required to

rotate every five years. The tenure of

each of the partners was reviewed and

concluded to be aligned with this policy.

Following due consideration, the

Committee believes the safeguards as

implemented by the Committee are

adequate to ensure the objectivity and

effectiveness of the audit process, based

on the following:

• The cross-reviews by the Investec plc

auditors across the Group

• Restrictive policy for non-audit

services, including pre-approval of

non-audit work

• The confirmation of the independence

of the firms and auditors involved

• Formal audit quality process

undertaken by the Committee.

Audit firm rotation

The Company has complied with the

requirements of the Statutory Audit

Services for Large Companies Market

Investigation (Mandatory Use of

Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014

(the Order), which relates to the

frequency and governance of tenders for

the appointment of the external auditors.

The external auditors of Investec plc

have been Ernst & Young LLP since 2000

and will rotate off following completion of

the audit of the 2024 financial year.

Deloitte LLP have been nominated as the

new external auditors for the financial

year ending 31 March 2025, subject to

approval by ordinary shareholders at the

AGM to be held in August 2024.

Transition process

A formal transition process commenced

during 2023, whereby Deloitte LLP

shadowed the full 2024 audit cycle

performed by the incumbent external

auditor. The purpose of the shadow

period was for Deloitte LLP to obtain

sufficient information about the Group,

the financial control environment and the

audit process to ensure a smooth

transition as lead external auditor in the

following financial year.


Year	Auditor	Shadow Auditor
2023/24	EY LLP (UK)	Deloitte LLP (UK)
2024/25	Deloitte LLP (UK)



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED

Re-election and appointment of

auditors

The Committee has considered the

following in selecting external auditors:

• The level of specialisation, footprint,

capacity and experience required by a

firm in performing a joint audit of a

Bank or financial services group which

is of systemic importance

• Transformation

• Technology

• Credentials and Partners

• Legal cases and reputational matters

• The level of quality control within the

audit firms as evidenced by the results

of internal and external regulatory

reviews performed on audit firms and

engagement partners

• The level of inherent risk in auditing a

financial services group and the

consequent audit risks

• The independence of the external

auditor

• The fundamental demands on audit

quality, the level of audit risk given the

turmoil in the audit profession,

balanced against shareholder views on

firm rotation

• Regulatory requirements

• Understanding of the Investec

business, culture and financial

statement risks.

Considering the guidance provided in the

FRC guide on audit committees, the

Committee confirms its satisfaction with

the performance and quality of the

external audit function, the external audit

firms and the engagement partners.

The Board and the Committee is

recommending the appointment of

Deloitte LLP as auditors of Investec plc at

its AGM in August 2024 for the financial

year ending 31 March 2025.

Looking ahead

The role of the Committee will remain

focused on:

• Ensuring the improvement and the

effective functioning of the Group’s

financial systems and processes,

financial control environment,

monitored by an effective combined

assurance model

• Audit quality and independence

• Management’s response in respect of

future changes to IFRS® Accounting

Standards, legislation and other

regulations impacting disclosure

requirements

• Ensuring a smooth transition of the

external audit to the new audit firms

• The implications of ESG risk in

measuring the sustainability and

societal impact of loans or an

investment in a company of business

together with ESG accounting

disclosures and assurance processes

• Continuing to exercise oversight over

subsidiary audit committees, including

in remote locations

• Monitoring the implementation of the

JSE Listings Requirements, including

the effectiveness of internal financial

controls.

Vote of thanks

The Committee and I would like to thank

Ernst & Young LLP for their robust

challenge, support and quality audits

performed during their years of service.

Ernst & Young LLP fulfilled the role as

lead auditor for Investec DLC and played

a pivotal role in the transition of the

external audit function over the past two

years. I have personally appreciated the

manner in which this has been

conducted.

I would like to extend my gratitude and

thanks to Philisiwe Sibiya, who will step

down at the August 2024 AGM, for her

exemplary and valued contribution to the

Committee over the last five years.

I would further like to welcome Diane in

her new role as Chair designate of the

Committee. It is a role I’m sure she will

enjoy and I believe that the Group will

benefit from her insights and experience.

I will be retiring from the Investec plc

Board at the August 2024 AGM having

served close to ten years on the Board.

I would like to acknowledge and thank

the various assurance providers I have

worked closely with over the last eight

years, ie Finance, Compliance, Internal

and External audit, amongst others.

I would further like to thank management

and the leadership for the ongoing

commitment to a constantly evolving and

improving control environment. Lastly, as

Chair, I would like to thank my fellow

Audit Committee members for their

diligence and support over the years.

Zarina Bassa

Chair, Investec plc Audit Committee

24 June 2024



02	Risk management and governance	Investec plc Annual Financial Statements 2024

INVESTEC PLC AUDIT COMMITTEE REPORT CONTINUED

The Directors' report for the year ended

31 March 2024 comprises pages 58 to 65

of this report, together with the sections

of the annual report incorporated by

reference.

The Directors’ report deals with the

requirements of Investec plc.

As permitted by Section 414C(11) of the

UK Companies Act, some of the matters

required to be included in the directors'

report have instead been included in the

strategic report on pages 8 to 140 of the

Investec Group’s 2024 integrated and

strategic report, as the Board considers

them to be of strategic importance.

Specifically, these are:

• Future business developments

(throughout the strategic report)

• Risk management on page 103

• Information on how the directors have

had regard to the Group's

stakeholders, and the effect of that

regard, on pages 24 to 34 of the

Investec Group’s 2024 integrated and

strategic report.

The strategic report (as contained in the

Investec Group’s 2024 integrated and

strategic report) and the Directors’ report

together form the management report for

the purposes of Disclosure Guidance and

Transparency Rules (DTR) 4.1.8R.

For information on the corporate

governance of the Investec Group, refer

to the corporate governance sections of

the Investec Group’s 2024 integrated and

strategic report and the Investec Group’s

2024 risk and governance report.

Information relating to the use of financial

instruments by the Company can be

found on pages 122 to 124 and is

incorporated by reference.

Additional information for shareholders

of Investec plc is detailed in schedule A

to the Directors’ report on pages 66

and 68.

Other information to be disclosed in the

Directors' report is given in this section.

The Directors' report fulfils the

requirements of the corporate

governance statement for the purposes

of DTR 7.2.3R.

Directors


	The membership of the Board and biographical details of the Directors are provided on pages 146 to 149 of the Investec Group’s 2024 integrated and strategic report.

Changes to the composition of the Board

during the year and up to the date of this

report are shown in the table below:


	Role	Effective date of departure/ appointment
Departures
Khumo Shuenyane	Non-Executive Director	3 August 2023
Richard Wainwright	Executive Director	3 August 2023
Ciaran Whelan	Executive Director	3 August 2023
Appointments
Diane Radley	Non-Executive Director	6 March 2024

In accordance with the UK Corporate

Governance Code, all of the directors

will retire and those willing to serve again

will submit themselves for re-election at

the AGM.

Zarina Bassa, who reached nine years of

service with the Group, and Philisiwe

Sibiya who wishes to focus on her own

business and other boards, will not stand

for re-election at the 2024 AGM.

Company Secretary

The Company Secretary of Investec plc is

David Miller.

The Company Secretary is professionally

qualified and has gained experience over

many years. His performance is

evaluated by Board members during the

annual Board evaluation process. He is

responsible for the flow of information to

the Board and its Committees and for

ensuring compliance with Board

procedures. All directors have access to

the advice and services of the Company

Secretary, whose appointment and

removal is a Board matter.

In compliance with the UK Corporate

Governance Code and the UK Companies

Act, the Board has considered and is

satisfied that the Company Secretary is

competent, and has the relevant

qualifications and experience.

Induction, training and

development

The Chair leads the training and

development of directors and the

Board generally.

A comprehensive development

programme operates throughout the

year, and comprises both formal and

informal training and information

sessions.

On appointment to the Board, all

directors benefit from a comprehensive

induction, which is tailored to the new

director’s individual requirements. The

induction schedule is designed to provide

the new director with an understanding

of how the Group works and the key

issues that it faces. The Company

Secretary consults the Chair when

designing an induction schedule, giving

consideration to the particular needs of

the new director. When a director joins a

Board Committee, the schedule includes

an induction to the operations of that

Committee.

Directors and their

interests


	Details of the directors’ shareholdings and options to acquire shares are detailed in the Investec Group’s 2024 remuneration report.

Directors' conflicts

of interest

The Group has procedures in place for

managing conflicts of interest. Should a

director become aware that they, or any

of their connected parties, have an

interest or a potential interest in an

existing or proposed transaction with the

Group, they are required to notify the

Board or at the next Board meeting.

Internal controls are in place to ensure

that any related party transactions

involving directors, or their connected

parties, are conducted on an arm's length

basis. Directors have a continuing duty to

update any changes to their declarations.

Directors' and officers’

liability insurance

The Group maintains directors' and

officers' liability insurance which provides

appropriate cover for any potential legal

action brought against its directors.



02	Risk management and governance	CORPORATE GOVERNANCE	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT

Change of control

The Articles of Association of

Investec plc and the Memorandum of

Incorporation of Investec Limited ensure

that a person cannot make an offer for

one company without having made an

equivalent offer to the shareholders of

both companies on equivalent terms.

Pursuant to the terms of the agreements

establishing the DLC structure, if either

Investec plc or Investec Limited serves

written notice on the other at any time

after either party becomes a subsidiary of

a third party, or after both Investec plc

and Investec Limited become

subsidiaries of a third party, the

agreements establishing the DLC

structure will terminate.

All of the Investec Group's share plans

contain provisions relating to a change of

control. Outstanding awards and options

would normally vest and become

exercisable on a change of control and,

where applicable, subject to the

satisfaction of any performance

conditions at that time.

Powers of directors

The Board manages the business of the

Group under the powers set out in the

Articles of Association of Investec plc,

which include the ability of directors to

issue or buy back shares. Directors were

granted authority to issue and allot

shares and to buy back shares at the

2023 AGM. Shareholders will be asked

to renew these authorities at the 2024

AGM and further details will be provided

in the AGM notice.

Contracts


	Details of contracts with directors can be found o n pages 22 and 23 of the Investec Group's 2024 remuneration report.

Authorised and issued

share capital

Details of the share capital are set out on

pages 141 to 142 in note 40 to the annual

financial statements.

Investec plc did not issue any ordinary

shares during the financial year ended

31 March 2024.

Investec plc did not repurchase any of its

ordinary shares during the financial year

ended 31 March 2024.

Investec Limited purchased 8 434 679 of

Investec plc’s ordinary shares during the

financial year ended 31 March 2024

representing 1.2% of the issued share

capital. These shares are being held

exclusive of voting and dividend rights as

treasury shares.

At 31 March 2024, Investec plc held

53 401 625 shares in treasury

(2023: 49 720 148), for allotment under

share plans. The maximum number of

shares held in treasury by Investec plc

during the period under review was

53 623 501 shares.

Ordinary dividends

An interim dividend of 15.5p per ordinary

share (2022: 13.5p) was paid on

22 December 2023, as follows:

• 15.5p per ordinary share to

non-South African resident shareholders

registered on 22 December 2023, and

• South African resident shareholders

registered on 22 December 2023,

through a dividend paid by Investec

Limited on the SA DAS share,

equivalent to 15.5p per ordinary share.

The directors have proposed a final

dividend to shareholders registered on

23 August 2024, of 19p (2023: 17.5p) per

ordinary share, which is subject to the

approval by the members of Investec plc

at the AGM that is scheduled to take

place on 8 August 2024. If approved, this

will be paid on 6 September 2024, as

follows:

• 19p per ordinary share to

non-South African resident shareholders

registered on 23 August 2024, and

• South African resident shareholders

registered on 23 August 2024, through

a dividend paid by Investec Limited on

the SA DAS share, equivalent to 19p per

ordinary share.

Preference dividends

Non-redeemable, non-

cumulative, non-participating

preference shares

Preference dividend number 35

for the period 1 April 2023 to

30 September 2023, amounting to

29.08904p per share, was declared to

members holding preference shares

registered on 1 December 2023 and was

paid on 12 December 2023.

Preference dividend number 36 for the

period 1 October 2023 to 31 March 2024,

amounting to 31.33562p per share, was

declared to members holding preference

shares registered on 14 June 2024

payable on 28 June 2024.

Rand-denominated non-

redeemable, non-cumulative,

non-participating preference

Preference dividend number 25

for the period 1 April 2023 to

30 September 2023, amounting to

552.49657 cents per share, was declared

to members holding Rand-denominated

non-redeemable, non-cumulative,

non-participating preference shares

registered on 1 December 2023 and

was paid on 12 December 2023.

Preference dividend number 26 for the

period 1 October 2023 to 31 March 2024,

amounting to 559.65411 cents per share,

was declared to members holding Rand-

denominated non-redeemable, non-

cumulative, non-participating preference

shares registered on 14 June 2024 and

payable on 28 June 2024.

Going concern

In adopting the going concern basis

for preparing the consolidated financial

statements, the directors have

considered the Group’s business

activities, objectives and strategy,

principal risks and uncertainties in

achieving its objectives, and performance

that are set out on pages 8 to 13, pages

54 to 57 and pages 108 to 119 of the

Investec Group’s 2024 integrated and

strategic annual report. The directors

have performed a robust assessment of

the Group’s financial forecasts across a

range of scenarios over a 12-month

period from the date the financial

statements are authorised for issue.

Based on these, the directors confirm

that they have a reasonable expectation

that the Company and the Group, as a

whole, has adequate resources to

continue in operational existence for the

12 months from the date the financial

statements are authorised for issue. The

directors therefore consider it

appropriate to adopt the going concern

basis of accounting in preparing the

accompanying consolidated financial

statements.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

Viability statement

In accordance with the UK Corporate

Governance Code, in addition to

providing a going concern statement

(disclosed on page 59), the Board is

required to make a statement with

respect to the Group’s viability (i.e. its

ability to continue in operation and meet

its liabilities). This is required to take into

account the Board’s assessment of the

current position of the Group, its

prospects and the principal risks it faces,

including the period of time for which the

Board has made the assessment and why

that period is considered appropriate.

The Board has used a three-year

assessment period as this is aligned to

the Group’s medium-term capital plans

which incorporate profitability, leverage

and capital adequacy projections and

include impact assessments from a

number of stress scenarios. Detailed

management information therefore exists

to provide senior management and the

Board sufficient and realistic visibility of

the Group’s viability over the three years

to 31 March 2027.

Following confirmation by the DLC BRCC

(comprising a majority of Non-Executive

Directors, which includes certain

members of the Audit Committees), the

Audit Committee recommended the

viability statement for Board approval.

The Board has identified the principal and

emerging risks facing the Group and

these are highlighted on pages 31 to 45.

Through its various committees, notably

the Audit Committees and the DLC BRCC

and its sub-committee, the DLC Capital

Committee, the Board regularly carries

out a robust assessment of these

principal risks and their potential impact

on the performance, liquidity, solvency,

capital and operational resilience of the

Group. The activities of these Board sub-

committees and the issues considered by

them are described in the Group’s 2024

risk and governance report.

Taking these risks into account, together

with the Group’s strategic objectives and

the prevailing market environment, the

Board approved the overall mandated

risk appetite frameworks for Investec plc.

The risk appetite frameworks set

parameters relating to the Board’s

expectations around performance,

business stability and risk management.

The Board considers that prudential risk

management is paramount in all it does.

Protection of depositors, customers’

interests, capital adequacy and

shareholder returns are key drivers. The

Bank, in keeping with sound governance

practices, has defined roles and

responsibilities for the management of

risk in accordance with the three lines of

defence model, i.e. business line

management, an independent operational

risk function and an independent internal

audit function. In addition, to manage the

Group’s risk appetite, there are a number

of detailed statements, frameworks,

policies and governance structures in

place. The Board ensures that there are

appropriate resources in place to manage

the risks arising from running the

business by having independent Risk

Management, Compliance, and Financial

Control functions. These are

supplemented by an Internal Audit

function that reports independently to

the non-executive Audit Committee

Chair.

The Board believes that the risk

management systems and processes,

supported by the conclusions of the

Internal Audit function and the results of

their combined assurance coverage

through each assurance function, are

adequate to support the Group’s strategy

and allow the Group to operate within its

risk appetite framework. A review of the

Group’s performance/measurement

against its risk appetite framework is

provided at each DLC BRCC meeting and

at the main Board meetings.

In terms of the FCA and PRA

requirements, the Group is also required

to meet regulatory standards with

respect to capital and liquidity. In terms

of these requirements, the Group is

required to stress its capital and liquidity

positions under a number of severe

stress conditions. Investec’s stress

testing framework is well embedded in its

operations and is designed to identify

and regularly test the Group’s key

‘vulnerabilities under stress’.

In order to manage liquidity risk, liquidity

stress testing is performed for a range of

scenarios, each representing a different

set of assumptions. These include

market-wide, firm specific, and combined

scenarios (combination of the market-

wide and firm specific stresses). The

Group manages its liquidity risk appetite

in relation to combined stress parameters

which represent extreme but plausible

circumstances. The objective is to have

sufficient liquidity under a combined

stress scenario to continue to operate for

a minimum period as detailed in the

Board-approved risk appetite framework.

In addition to these stress scenarios, the

Group’s risk appetite also requires it to

maintain specified minimum levels for

both the liquidity coverage ratio and net

stable funding ratio, which are well in

excess of the regulatory minimums of

100% respectively; a minimum cash and

near cash to customer deposit ratio of

25%; and to maintain low reliance on

wholesale funding to fund core asset

growth. Investec plc undertakes an

annual Internal Liquidity Adequacy

Assessment Process (ILAAP) which

documents the approach to liquidity

management across the firm. This

document is reviewed and approved by

IBP Board Risk and Capital Committee

(IBP BRCC), DLC BRCC and by the IBP,

plc and DLC Boards. Each banking entity

within the Group is required to be fully

self-funded. The Group currently has

£9.7 billion in cash and near cash assets,

representing 46.4% of customer

deposits.

The Group develops annual capital plans

(refreshed after six months), that look

forward over a three-year period. The

capital plans are refreshed on an ad hoc

basis if a material event occurs or is likely

to occur. These plans are designed to

assess the capital adequacy of the

Group’s respective banking entities under

a range of economic and internal

conditions, with the impact on earnings,

asset growth, risk appetite and liquidity

considered. The output of capital

planning allows senior management and

the Board to make decisions to ensure

that the Group continues to hold

sufficient capital to meet internal and

regulatory capital targets over the

medium term (i.e. three years). The

Group targets a CET1 ratio in excess of

10%,a tier 1 ratio greater than 11%,a

minimum capital adequacy ratio of

between 14% to 17% and a leverage ratio

in excess of 6% for each of its banking

entities.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

The parameters used in the capital and

liquidity stresses are reviewed regularly,

taking into account the principal and

emerging risks facing the Group, changes

in the business environments and inputs

from business units. Scenarios are

designed considering macro-economic

downside risks, portfolio-specific risk

factors and business model

vulnerabilities. Multiple scenarios are

considered to account for the uncertain

forward-looking macro-economic

environment.

• Base case: Following a technical

recession over H2 of 2023 calendar

year, a recovery is expected over the

course of 2024, firmly taking hold over

the second half of the year. This

recovery in 2024 and beyond is

supported by a strengthening in

household real incomes, an easing in

monetary policy and looser fiscal policy

too. The baseline view anticipates the

Bank rate to fall to 4.50% by the end of

2024, driven by a continued easing in

inflation pressures, with CPI expected

to reach 1.6% in Q3 2024. Over the

three-year horizon Bank rate is

assumed to fall to 3.00%. More

broadly, areas of the economy which

have felt the pressure of high interest

rates most intensely, such as the

housing market, are also expected to

recover, with the recent fall in prices

expected to be recovered by the end

of 2025. Commercial real estate is also

expected to recover, although

structural issues are expected to

remain a headwind. The global

economic backdrop can be

characterised in a similar vein to the

UK with growth strengthening, inflation

moderating and central banks

loosening policy from the current

restrictive stance.

In assessing stress scenarios for the

2024 capital planning exercise,

consideration was given to the outlook

for interest rates given the baseline view

that policy rates had peaked in 2023 and

were expected to fall in 2024. As such it

was proposed and approved that

Investec would run two global economic

downturn scenarios, both being triggered

by the same hypothetical economic

shock, but the path and severity of the

scenarios differ due to the assumed

differences in central bank policy

reactions.

These are defined below:

• Aggressive Easing, Moderate

Recession: As is the typical case with a

macroeconomic shock the Bank of

England is assumed to react

aggressively and expediently to a

downturn in the economy driven by a

global tail event. This sees the Bank

rate cut 500bps, hitting the low of

0.25% in Q3 2025. This helps alleviate

the downside pressures on the

economy and whilst a recession still

ensues, the depth and longevity is

limited to a 2.2% fall in GDP and a

recession lasting three quarters. Under

such a scenario inflation falls below 1%,

whilst asset values, both residential

real estate and commercial fall by 9%

and 14% peak to trough. However,

given the monetary policy response an

economic recovery is assumed to take

hold from Q2 2025 onwards. In the

medium-term, policy rates are

assumed to begin rising again as

economic growth returns to trend.

Given the global nature of the shock,

the same aggressive easing and GDP

trends are seen amongst the major

advanced market economies. For

example, US and Euro area GDP is

assumed to fall 2.2% and 2.3%

respectively. The respective policy

rates are cut to 0.50% and 0.25%.

• Cautious Easing, Severe Recession: In

contrast to the ‘Aggressive Easing,

Moderate Recession’ stress, this

scenario envisages a more cautious

approach to monetary policy easing

given residual inflation worries and still

present upside risks to price pressures.

As such, whilst the Bank of England

does loosen policy in response to the

economic shock it does so at a more

moderate pace, with rates only falling

225bps to 2.00% by Q1 2026. The

consequence is a recession which is

deeper and longer, the peak to trough

fall in GDP totalling 4.3%. Amidst the

downturn in the economy and tighter

financing conditions, the real estate

market faces a deeper contraction with

residential prices falling 15% and

commercial prices falling 18%. A

recovery is seen through the latter half

of the scenario, beginning in Q2 2026,

but this is insufficient to see GDP

return to its pre-stress peak. In terms

of the global picture these same

macroeconomic characteristics are

assumed to apply.

The Group implements regulatory

scenarios when they are published by

regulators (UK BoE Annual Cyclical

Scenario). For 2024 the BoE will not be

publishing a new ACS given it launched

its System-wide exploratory scenario

(SWES) in June 2023. Hence, at this point

Investec Plc will not be running a

regulatory scenario in its stress testing

programme.

The Board has assessed the Group’s

viability in its ‘base case’ and stress

scenarios. In assessing the Group’s

viability, a number of assumptions are

built into its capital and liquidity plans. In

the stress scenarios these include, for

example, foregoing or reducing dividend

payments and asset growth being

curtailed.

We also carry out ‘reverse stress tests’,

i.e. scenarios that cause the business

model to fail. Reverse stress testing

scenarios are developed thematically and

their impact is assessed in qualitative and

quantitative terms with respect to

regulatory capital and liquidity threshold

conditions, taking into account the loss

absorbing effects of the bank’s capital

stack. Escalating losses may expose the

business model to unacceptable levels of

risk well before regulatory threshold

conditions are breached, and mitigation

actions are identified with the aim to

prevent the failure of the Group. Reverse

scenarios are extreme tail events and are

considered remote, and mainly serve the

purpose of identifying and addressing

potential weaknesses that may not be

identified through the ongoing risk

management and stress testing

processes.

In addition, Investec plc performs climate

scenario analysis and risk assessments in

line with the requirements stipulated by

Supervisory Statement SS3/19

‘Enhancing banks’ and insurers’

approaches to managing the financial

risks from climate change’, on a

proportionate basis for the size and

complexity of the firm. To date, findings

indicate that transition and physical risk is

low and Investec plc has sufficient capital

and liquidity to continue as a going

concern and meet regulatory capital and

liquidity requirements.

Furthermore, the Group is required to

have a contingency funding and recovery

plan as well as a resolution pack. The

recovery plans document how the Board

and senior management will ensure that

the Group recovers from extreme

financial stress to avoid liquidity and

capital difficulties in its separately

regulated companies.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

On 28 June 2023, the BoE formally

notified Investec plc that the preferred

resolution strategy will be changed from

bank insolvency procedure to bail-in and

as such a revised, increased minimum

requirement for own funds and eligible

liabilities (MREL) requirement will be

imposed on Investec plc and IBP as a

material subsidiary. The MREL transition

will commence from 1 January 2026 with

end state MREL applying from 1 January

2032.

The Group maintains an operational

resilience framework that defines

important business services, impact

tolerances and plans to respond

effectively to a disruption. This not only

ensures continuity of business operations

but also safeguards the interests of key

stakeholders including clients and

regulators, as well as maintaining our

reputation, brand and value‐creating

activities.

The capital and liquidity plans, stress

scenarios, contingency funding and

recovery plans, resolution pack and the

risk appetite statements are reviewed at

least annually by the respective Capital,

Risk, and Board Committees. In times of

severe economic distress and if

applicable, stress scenarios are reviewed

more regularly; for example, as was the

case with the COVID‐19 pandemic. In

addition, senior management hosts an

annual risk appetite process at which the

Group’s risk appetite frameworks are

reviewed and modified to take into

account risk experience and changes in

the environment. Furthermore, strategic

budget processes take place within each

business division at least annually. These

focus on, amongst other things: the

business and competitive landscape;

opportunities and challenges including

the use of new and emerging

technologies and operational risks

relating to technology, resilience, and

cyber security; and financial projections.

A summary of these divisional budgets,

together with a consolidated Group

budget, is presented to the Board during

its strategic review process annually.

In assessing the Group’s viability, the

Board has taken all of the above-

mentioned factors, documents and

processes into consideration. The

directors can confirm that they have a

reasonable expectation that the Group

will continue to operate and meet its

liabilities as they fall due over the next

three years.

The viability statement should be read in

conjunction with the following sections in

the annual reports, all of which have

informed the Board’s assessment of the

Group’s viability:

• Pages 4 to 25 which show a strategic

and financial overview of the business

• Pages 31 to 45 which provide detail on

the principal and emerging risks the

Group faces and the processes in

place to assist the Group in mitigating

its principal risks

• Page 31 which provides information on

the overall Group’s risk appetite

• Page 28 which provides an overview of

the Group’s approach to risk

management

• Pages 31, 165, 188 and 202 which

highlight information on the Group’s

various stress testing processes

• Pages 192 to 196 which specifically

focus on the Group’s philosophy and

approach to liquidity management

• Page 199 which provides detail on the

recovery and resolution plan

• Pages 200 to 205 which explain the

Group’s capital management

framework.

This forward‐looking viability statement

made by the Board is based on

information and knowledge of the Group

at 24 June 2024. There could be a

number of risks and uncertainties arising

from (but not limited to) domestic and

global economic and business conditions,

including the development of new

technologies, beyond the Group’s control

that could cause the Group’s actual

results, performance or achievements in

the markets in which it operates to differ

from those anticipated.

Social and Ethics

Committee (SEC)

The Board of Investec plc has delegated

the duties of the Social and Ethics

Committee, as set out in the South

African Companies Act, to the DLC SEC.


	Further details of the role, responsibilities, membership and activities of the DLC SEC are set out on pages 101 to 105 of the Investec Group’s 2024 risk and governance report.

Sustainability report


	For information on our approach to social, environmental and ethical matters, please refer to the Investec Group’s 2024 sustainability report which is published and made available on our website www.investec.com



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

Investec plc carbon footprint

Streamlined energy and carbon reporting (SECR)


		2023/24			2022/23
Metric	Unit	UK and offshore 1	Global (excluding UK and offshore)	Total Investec plc	UK and offshore	Global (excluding UK and offshore)	Total Investec plc
Emissions from activities for which the company own or control including combustion of fuel & operation of facilities (Scope 1)	tC02e	349	1	350	44	—	44
Emissions from purchase of electricity (Scope 2 location based)	tC02e	701	236	937	807	164	971
Total gross Scope 1 & Scope 2 emissions (location based)	tC02e	1 050	237	1 287	851	164	1 015
Energy consumption used to calculate above emissions 2	kWh	3 841 026	533 285	4 374 311	4 420 786	441 222	4 862 008
Intensity ratio: Location based gross Scope 1 + 2 emissions per employee 3	tC02e/ Headcount	0.41	0.71	0.44	0.25	0.92	0.29
Total gross Scope 3 operational emissions	tC02e	6 955	41	6 996	4 873	30	4 903
Total gross Scope 1, Scope 2 & Scope 3 operational emissions (location based)	tC02e	8 005	278	8 283	5 724	194	5 918
Intensity ratio: Location based gross Scope 1, 2 + 3 operational emissions per employee 3	tC02e/ Headcount	3.09	0.84	2.82	1.71	1.09	1.69
Scope 2 market based4	tC02e	—	—	—	—	—	—
Carbon offsets5	tC02e	7 303	43	7 346	4 917	30	4 947
Total annual net emissions (market based)	tC02e	—	—	—	—	—	—

Boundary, methodology, and exclusions

An ‘operational control’6 approach has been used to define the Greenhouse Gas emissions boundary.

This approach captures emissions associated with the operation of Investec plc office buildings as outlined in the Basis of

Reporting coverage on our website, company travel in private vehicles, and travel on public transportation for instance. This report

covers all countries where Investec plc has operational control over their emissions. This information was collected and reported in

line with the methodology set out in the UK Government’s Environmental Reporting Guidelines, 2019. The emissions have been

calculated using the latest conversion factors provided by the UK Government (2023). The reporting period is April 2023 to March

2024, as per the financial accounts. Investec plc’s Scope 1 emissions refer to natural gas, LPG, refrigerants, and vehicle fleet, its

Scope 2 emissions refer to electricity used in its premises, and its Scope 3 emissions refer to category 1: paper, category 5: waste,

category 6: business travel, and category 7: employees working from home.

Energy efficiency and carbon reduction initiatives

During the 2023/2024 period, Investec maintained and improved the integrated ISO 50001/14001 standards, which enables

optimisation of energy-related performance and ongoing efficiency improvements.

Disclaimer

1. The offshore area as defined in the Companies (Directors Report) and Limited Liability Partnerships (Energy and Carbon) Regulations 2018 includes Guernsey, Jersey,

and Isle of Man. However, our overseas sites in America, Europe, and Asia are not included in the offshore area. These sites are included in the global total, excluding

the UK and offshore.

2. Consumption data for refrigerants (scope 1) and scope 3 emissions is not available in kWh so the total energy usage has been calculated for mandatory emissions only

(scope 1 (excluding refrigerants) and scope 2).

3. For the purposes of this report, an employee is an individual who performs services for the Company for compensation and is under the Company’s control with

respect to the performance of those services. This includes full-time, part-time, and temporary employees, as well as independent contractors.

4. We have offset our Scope 2 emissions by purchasing 100% of our power from renewable sources through green tariffs and renewable energy certificates.

5. The remaining unavoidable emissions were offset through the purchase of VCS certified carbon credits. These carbon credits were sourced from Wonderbag and

AgriCarbon.

6. An operational control approach to GHG emissions boundary is defined as: “Your organisation has operational control over an operation if it, or one of its subsidiaries,

has the full authority to introduce and implement its operating policies at the operation”.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

Climate-related financial

disclosures report


	Refer to the Investec Group’s 2024 climate and nature-related financial disclosures report for our progress on the Task Force on Climate- related Financial Disclosures (TFCD) recommendations.

Nominations and Directors’

Affairs Committee

(Nomdac)

The Board of Investec plc has delegated

the duties of the Directors’ Affairs

Committee to the DLC Nomdac.


	Further details of the role, responsibilities, membership and activities of the DLC Nomdac are set out on pag es 97 to 100 of the Investec Group’s 2024 risk and governance report.

Remuneration Committee

The Board of Investec plc has delegated

the duties of the Remuneration

Committee to the DLC Remuneration

Committee.


	Further details of the role, responsibilities, membership and activities of the DLC Remuneration Committee are set out on page 14 of the Investec Group’s 2024 remuneration report.

Audit Committee

The Audit Committee comprising

independent Non-Executive Directors

meets regularly with senior management,

the external auditors, operational risk,

internal audit, compliance and the finance

division to consider the integrity of

financial reporting, nature and scope of

the internal and external audit reviews

and the effectiveness of our risk and

control systems, taking note of the key

deliberations of the subsidiary Audit

Committees as part of the process.


	Further details on the role and responsibility of the Audit Com mittee are set out on pages 46 to 57.

Independent auditor and

audit information

Each director, at the date of approval of

this report, confirms that, so far as the

director is aware, there is no relevant

audit information of which the Company’s

auditor is unaware and that each director

has taken all steps that he or she ought

to have taken as a director to make

himself or herself aware of any relevant

audit information and to establish that

the Company’s auditor is aware of that

information. This confirmation is given

pursuant to Section 418 of the UK

Companies Act and should be interpreted

in accordance with and subject to those

provisions.

The appointment of Deloitte LLP in a

shadow capacity, for the financial year

starting 1 April 2023, was recommended

and approved by ordinary shareholders

at the AGM held in August 2023. A formal

transition process commenced during

2023, whereby Deloitte LLP shadowed

the full 2024 audit cycle performed by

the incumbent external auditor. The

purpose of the shadow period was for

Deloitte LLP to obtain sufficient

information about the Group, the financial

control environment and the audit

process to ensure a smooth transition as

external auditor in the following financial

year i.e. ending 31 March 2025. Non-

audit services provided by Deloitte LLP

were reviewed and considered in

advance of their appointment as external

auditors to ensure their continued

independence. The appointment of

Deloitte LLP for the 2024 financial year,

will be recommended for approval at the

AGM to be held in August 2024.

Major shareholders


	The largest shareholders of Investec plc are shown on page 187 of the Investec Group’s 2024 integrated and strategic annual report.

Special resolutions

At the AGM held on 3 August 2023,

special resolutions were passed in terms

of which:

• A renewable authority was granted to

Investec plc to acquire its own ordinary

shares in accordance with the terms of

Section 701 of the UK Companies Act

• A renewable authority was granted to

Investec plc to acquire its own

preference shares in accordance with

the terms of Section 701 of the

UK Companies Act.

AGM update statement

At the AGM on 3 August 2023,

resolution 34 (political donations), passed

with a less than 80% majority.

As stated in the notices to the AGMs,

Investec plc does not give any money

for political purposes in the UK nor does

it make any donations to UK political

organisations or incur UK political

expenditure. However, the definitions

of political donations and political

expenditure used in the UK Companies

Act are very wide. In line with UK market

practice, the authority is therefore

requested only as a precautionary

measure to ensure that Investec plc and

any company which is or becomes

a subsidiary of Investec plc does not

inadvertently breach the relevant

provisions of the UK Companies Act.

Diversity and inclusion

Our diversity and inclusion framework has

a sense of belonging for all our people,

irrespective of difference, as its goal. We

aim to make Investec a place where it is

easy to be yourself. It is a responsibility

we all share and is integral to our purpose

and values as an organisation. We

recognise that a diverse and inclusive

workforce is essential to our ability to be

an innovative organisation that can adapt

and prosper in a fast-changing world.

Investec’s approach is to recruit and

develop based on aptitude and attitude,

with the deliberate intention to build a

diverse workforce, which represents the

population of the relevant jurisdiction and

reflects its clients. Our recruitment

strategies actively seek difference,

engaging with minority groups, females

and people with disabilities. Investec is

committed to being an equal opportunity

employer. In accordance with our policies

and practices, and relevant International

Labour Organisation (ILO) conventions

and legislation, we do not tolerate any

form of discrimination based on gender,

gender reassignment, race, ethnicity,

religion, belief, age, disability, nationality,

political opinion, sensitive medical

conditions, pregnancy, maternity, civil

partnership and sexual orientation. People

with different abilities are an essential

part of a diverse talent pool and every

effort is made to facilitate an accessible

environment for all.


	Further information is provided in the Investec Group’s 2024 sustainability report.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

Research and development

In the ordinary course of business, the

Group develops new products and

services in each of its business divisions.

Political donations and

expenditure

The Group did not make any political

donations in the financial year ended

31 March 2024 (2023: Nil).

Subsidiary and associated

companies


	Details of principal subsidiary and associated companies are reflected on pages 157 to 159

Contingent liabilities, legal

matters and provisions

The Board considered contingent

liabilities legal matters and provisions

with a view to ensuring appropriate

accounting treatment in the financial

statements. Refer to note 49 on page

146.

Events after the reporting

date


	Refer to Note 57 of the Annual Financial statements.

Signed on behalf of the Board

of Investec plc

Philip Hourquebie

Group Chair

24 June 2024

Fani Titi

Group Chief Executive

24 June 2024



02	Risk management and governance	Investec plc Annual Financial Statements 2024

DIRECTORS’ REPORT CONTINUED

Additional information for

shareholders

Set out below is a summary of certain

provisions of Investec plc’s current

Articles of Association (the Articles)

and applicable English law concerning

companies (the UK Companies Act).

This is a summary only and the relevant

provisions of the Articles or the UK

Companies Act should be consulted

if further information is required.

Share capital

The issued share capital of Investec plc

at 31 March 2024 consists of 696 082 618

ordinary shares of £0.0002 each,

2 754 587 non-redeemable, non-

cumulative, non-participating preference

shares of £0.01 each, 131 447 ZAR non-

redeemable, non-cumulative, non-

participating preference shares of R0.001

each, 295 278 453 special converting

shares of £0.0002 each, the special voting

share of £0.001, the UK DAN share of

£0.001 and the UK DAS share of £0.001

(each class as defined in the Articles).

Purchase of own shares

Subject to the provisions of the Articles,

the UK Companies Act, the UK

Uncertificated Securities Regulations

2001 and every other statute for the time

being in force concerning companies and

affecting Investec plc, the approval of

shareholders as provided in the Articles,

and without prejudice to any relevant

special rights attached to any class of

shares, Investec plc may purchase, or

may enter into a contract under which

it will or may purchase any of its own

shares of any class, including without

limitation any redeemable shares, in any

way and at any price (whether at par or

above or below par).

Dividends and distributions

Subject to the provisions of the UK

Companies Act, Investec plc may by

ordinary resolution from time to time

declare dividends not exceeding the

amount recommended by the Board. The

Board may pay interim dividends

whenever the financial position of

Investec plc, in the opinion of the Board,

justifies such payment.

The Board may withhold payment of all

or any part of any dividends or other

monies payable in respect of Investec

plc’s shares from a person with a 0.25%

or more interest in the nominal value of

the issued shares if such a person has

been served with a notice after failure

to provide Investec plc with information

concerning interests in those shares

required to be provided under the

UK Companies Act.

Voting rights

Subject to any special rights or

restrictions attaching to any class of

shares, at a general meeting, every

member present in person has, upon a

show of hands, one vote and, on a poll,

every member who is present in person

or by proxy has one vote for each share.

In the case of joint holders of a share, the

vote of the senior who tenders a vote,

whether in person or by proxy, shall be

accepted to the exclusion of the votes

of the other joint holders and for this

purpose seniority shall be determined by

the order in which the names stand in the

share. Under the UK Companies Act,

members are entitled to appoint a proxy,

who need not be a member of Investec

plc, to exercise all or any of their rights

to attend and vote on their behalf at

a general meeting or class meeting.

A member may appoint more than one

proxy in relation to a general meeting

or class meeting, provided that each

proxy is appointed to exercise the rights

attached to a different share or shares

held by that member. A member that is

a corporation may appoint an individual

to act on its behalf at a general meeting

or class meeting as a corporate

representative. The person so authorised

shall be entitled to exercise the same

powers on behalf of such corporation as

the corporation could exercise if it were

an individual member of Investec plc.

Restrictions on voting

No member shall be entitled to vote

either in person or by proxy at any

general meeting or class meeting in

respect of any shares held by them if any

call or other sum then payable by them in

respect of that share remains unpaid. In

addition, no member shall be entitled to

vote if they have been served with a

notice after failure to provide Investec plc

with information concerning interests in

those shares required to be provided

under the UK Companies Act.

Deadlines for exercising

voting rights

Votes are exercisable at a general

meeting of Investec plc in respect of

which the business being voted upon

is being heard. Votes may be exercised

in person, by proxy, or in relation to

corporate members, by corporate

representatives. The Articles provide a

deadline for submission of proxy forms

of not less than 48 hours before the time

appointed for the holding of the meeting

or adjourned meeting.

Variation of rights

Subject to the UK Companies Act, the

Articles specify that rights attached to

any class of shares may be varied with

the written consent of the holders of not

less than three-fourths in nominal value

of the issued shares of that class, or with

the sanction of an extraordinary

resolution passed at a separate general

meeting of the holders of those shares.

The rights conferred upon the holders

of any shares shall not, unless otherwise

expressly provided in the rights attaching

to those shares, be deemed to be varied

by the creation or issue of further shares

ranking pari passu with them. Where,

under the Company’s share incentive

plan, participants receiving forfeitable

award type are the beneficial owners of

the shares, however not the registered

owners. The participants are entitled to

exercise their voting rights prior to the

shares being released to the participants.

Participants receiving conditional awards

do not receive any voting rights until the

release date.

Transfer of shares

All transfers of shares may be effected

by transfer in writing in any usual or

common form or in any other form

acceptable to the directors. The

instrument of transfer shall be signed by

or on behalf of the transferor and (except

in the case of fully paid shares) by or on

behalf of the transferee. Transfers of

shares which are in uncertificated form

are effected by means of the CREST

system.

The directors may, in the case of shares

in certificated form, in their absolute

discretion and without assigning any

reason, refuse to register any transfer of

shares (not being fully paid shares),

provided that such discretion may not be

exercised in such a way as to prevent

dealings in the shares of that class from

taking place on an open and proper basis.

The directors may also refuse to register

an allotment or transfer of shares

(whether fully paid or not) in favour of

more than four persons jointly. The

directors may decline to recognise any

instrument of transfer unless the

instrument of transfer is in respect of only

one class of share and, when submitted

for registration, is accompanied by the

relevant share certificates and such other

evidence as the directors may reasonably

require.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

SCHEDULE A TO THE DIRECTORS’ REPORT

Subject to the UK Companies Act and

regulations and applicable CREST rules,

the directors may determine that any

class of shares may be held in

uncertificated form and that title to such

shares may be transferred by means of

the CREST system or that shares of any

class should cease to be so held and

transferred.

All the Company’s employee share plans

include restrictions on transfer of shares

while the shares are subject to the plans.

Investec plc preference

The following are the rights and

privileges which attach to the Investec

plc preference shares:

• On a return of capital, whether or not

on a winding up (but not on a

redemption or purchase of any shares

by Investec plc) or otherwise, the plc

preference shares will rank, pari passu

inter se and with the most senior

ranking preference shares of Investec

plc in issue (if any) from time to time

and with any other shares of Investec

plc that are expressed to rank pari

passu herewith as regards to

participation in the capital, and

otherwise in priority to any other class

of shares of Investec plc

• Investec plc may, at its option, redeem

all or any of the plc preference shares

for the time being issued and

outstanding on the first call date or any

dividend payment date thereafter

• Holders of plc preference shares will

not be entitled to attend and vote at

general meetings of Investec plc.

Holders will be entitled to attend and

vote at a class meeting of holders of

plc preference shares.

Non-redeemable, non-

cumulative, non-

participating preference

The following are the rights and

privileges which attach to the perpetual

preference shares:

• Each perpetual preference share will

rank as regards to dividends and a

repayment of capital on the winding

up of Investec plc prior to the ordinary

shares, the plc special converting

shares, the UK DAN share, the UK DAS

share, but pari passu with the plc

preference shares. The perpetual

preference shares shall confer on the

holders, on a per perpetual preference

share and equal basis, the right to a

return of capital on the winding up of

Investec plc of an amount equal to the

aggregate of the nominal value and

premiums in respect of perpetual

preference shares issued, divided by

the number of perpetual preference

shares in issue

• Each perpetual preference share may

confer upon the holder thereof the

right to receive out of the profits of

Investec plc which it shall determine

to distribute, in priority to the ordinary

shares, the plc special converting

shares, the UK DAN share and the UK

DAS share, but pari passu with the plc

preference shares, the preference

dividend calculated in accordance with

the Articles

• The holders of the perpetual

preference shares shall be entitled to

receive notice of and be present but

not to vote, either in person or by

proxy, at any meeting of Investec plc,

by virtue of or in respect of the

perpetual preference shares, unless

either or both of the following

circumstances prevail at the date

of the meeting:

– The preference dividend or any part

thereof remains in arrears and

unpaid as determined in accordance

with the Articles after six months

from the due date thereof; and/or

– A resolution of Investec plc is

proposed which directly affects the

rights attached to the perpetual

preference shares or the interests

of the holders thereof, or a resolution

of Investec plc is proposed to wind

up or in relation to the winding up

of Investec plc or for the reduction

of its capital,

in which event the preference

shareholders shall be entitled to vote only

on such resolution.

Rand-denominated non-

redeemable, non-

cumulative, non-

participating perpetual

preference shares (the

ZAR perpetual preference

shares)

The ZAR perpetual preference shares are

subject to substantially similar terms and

conditions as the existing Pounds Sterling

non-redeemable, non-cumulative, non-

participating preference shares, as

outlined above, save that they are

denominated in South African Rands.

Shares required for the

DLC structure

Investec SSC (UK) Limited, a UK trust

company, specially formed for the

purpose of the DLC structure, holds the

plc special voting share, the plc special

converting shares, the UK DAN share and

the UK DAS share. These shares can only

be transferred to another UK trust

company, in limited circumstances.

The plc special voting shares are

specially created shares so that

shareholders of both Investec plc and

Investec Limited effectively vote together

as a single decision-making body on

matters affecting shareholders of both

companies in similar ways, as set out in

the Articles.

Prior to a change of control, approval of

termination of the sharing agreement

(which regulates the DLC), liquidation or

insolvency of Investec plc, the plc special

converting shares have no voting rights,

except in relation to a resolution

proposing the:

i. Variation of the rights attaching to the

shares or

ii. Winding up, and they have no rights

to dividends. The special converting

shares are held on trust for the

Investec Limited ordinary shareholders.

Investec plc and Investec Limited have

established dividend access trust

arrangements as part of the DLC.

Investec plc has issued two dividend

access shares, the UK DAS share and UK

DAN share which enables Investec plc

to pay dividends to the shareholders of

Investec Limited. This facility may be

used by the Board to address imbalances

in the distributable reserves of Investec

plc and Investec Limited and/or to

address the effects of South African

exchange controls and/or if they

otherwise consider it necessary

or desirable.



02	Risk management and governance	Investec plc Annual Financial Statements 2024

SCHEDULE A TO THE DIRECTORS’ REPORT CONTINUED

Annual

financial

statements



03	Annual financial statements	Investec plc Annual Financial Statements 2024

Our performance is a testament to

the continued execution of our

strategy. This section contains

Investec plc’s annual financial

statements.

IN THIS SECTION


70	Directors’ responsibilities

72	Independent auditor’s report to the members of Investec plc

74	Consolidated income statement

75	Consolidated statement of comprehensive income

76	Consolidated balance sheet

77	Consolidated cash flow statement

78	Consolidated statement of changes in equity

80	Accounting policies

92	Notes to the financial statements

164	Notes to risk management (including capital management)

206	Parent company annual financial statements



03	Annual financial statements	Investec plc Annual Financial Statements 2024

Directors’ responsibilities

The following statement, which should be

read in conjunction with the auditor’s

report set out on pages 72 to 74, is made

with a view to distinguishing for

shareholders the respective

responsibilities of the directors and of the

auditors in relation to the accounts.

The directors are responsible for

preparing the annual report and

the Group financial statements in

accordance with applicable UK law and

regulations.

The directors are required by the

UK Companies Act to prepare financial

statements for each financial year.

Under those laws the directors have

elected to prepare the Group financial

statements in accordance with UK

adopted international accounting

standards and with International Financial

Reporting Standards (IFRS Accounting

Standards) which comply with IFRS

Accounting Standards as issued by the

International Accounting Standards Board

(IASB). At 31 March 2024, UK adopted

IAS are identical in all material respects to

current IFRS applicable to the Group, with

differences only in the effective dates of

certain standards. The parent company

financial statements have been prepared

in accordance with Section 408 of the UK

Companies Act 2006. Under company

law the directors must not approve the

Group financial statements unless they

are satisfied that they give a true and fair

view of the state of affairs of the Group

and the Company and of the profit or

loss of the Group and the Company for

that period.

Under the Financial Conduct Authority’s

(FCA’s) Disclosure Guidance and

Transparency Rules (DTR), Group

financial statements are required to be

prepared in accordance with UK adopted

international accounting standards and

with IFRS as issued by the IASB.

In preparing the financial statements the

directors are required to:

• Select suitable accounting policies

in accordance with IAS 8 Accounting

Policies, Changes in Accounting

Estimates and Errors and then apply

them consistently

• Make judgements and accounting

estimates that are reasonable and

prudent

• Present information, including

accounting policies, in a manner that

provides relevant, reliable, comparable

and understandable information

• Provide additional disclosures when

compliance with the specific

requirements in IFRS or in respect

of the parent company financial

statements (FRS 101) is insufficient

to enable users to understand the

impact of particular transactions, other

events and conditions on the Group’s

financial position and financial

performance

• In respect of the Group financial

statements, state whether the

accounting standards have been

followed, subject to any material

departures disclosed and explained

in the financial statements

• In respect of the parent company

financial statements, state whether

applicable UK Accounting Standards,

including FRS 101, have been followed,

subject to any material departures

disclosed and explained in the financial

statements

• Prepare the financial statements on the

going concern basis unless it is

appropriate to presume that the

Company and/or the Group will not

continue in business.

The directors are responsible for keeping

adequate accounting records that are

sufficient to show and explain the

Company’s and Group’s transactions and

disclose with reasonable accuracy at any

time the financial position of the

Company and the Group, and enable

them to ensure that the Company and

the Group financial statements comply

with the UK Companies Act. They are

also responsible for safeguarding the

assets of the parent company and Group

and hence for taking reasonable steps for

the prevention and detection of fraud

and other irregularities.

Under applicable law and regulations, the

directors are also responsible for

preparing a strategic report, directors’

report, directors’ remuneration report and

corporate governance statement that

comply with that law and those

regulations.

The directors are accountable for the

maintenance and integrity of the certain

corporate and financial information on

the Company’s website.

Investor Relations, Company Secretarial

and Group Sustainability are respectively

responsible for the maintenance and

integrity of the general corporate,

financial, governance, and sustainability-

related information as well as any

obligations to the various exchanges of

Investec Group and its principal

subsidiaries on the Investec website.

With regards to specific corporate

information, processes are in place within

the business units and at a Group level to

ensure that all information published on

the website is substantively correct,

accurate and in line with corporate

governance and compliance

requirements. Group Marketing and

various divisions are responsible for the

above.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

DIRECTORS’ RESPONSIBILITIES

Directors’ responsibility

statement

The directors, whose names and

functions are set out on pages 146 to 149

of Investec Group’s 2024 integrated and

strategic annual report, confirm to the

best of their knowledge:

• That the consolidated financial

statements, prepared in accordance

with UK adopted international

accounting standards and with IFRS as

issued by the IASB, give a true and fair

view of the assets, liabilities, financial

position and profit or loss of the

Company, Group and the undertakings

included in the consolidation taken as

a whole

• That the annual report, including the

strategic report (as contained in the

Investec Group’s 2024 integrated and

strategic report), includes a fair review

of the development and performance

of the business and the position of the

Company, Group and undertakings

included in the consolidation taken as

a whole, together with a description

of the principal risks and uncertainties

that they face

• That they consider that the annual

report, taken as a whole, is fair,

balanced and understandable and

provides the information necessary for

shareholders to assess the Company’s

position, performance, business model

and strategy.

Financial results

The financial results of Investec plc

are set out in the annual financial

statements and accompanying notes

for the year ended 31 March 2024.

The preparation of these results was

supervised by the Investec Group

Finance Director, Nishlan Samujh.

Approval of annual

financial statements

The directors’ report and the annual

financial statements of the Group, and

the Company, which appear on pages

58 to 65 and pages 74 to 218, were

approved by the Board of directors on

24 June 2024.

Signed on behalf of the Board

Philip Hourquebie

Group Chair

24 June 2024

Fani Titi

Group Chief Executive

24 June 2024



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

DIRECTORS’ RESPONSIBILITIES CONTINUED

Opinion

We have audited the special purpose financial statements of

Investec Plc (the Parent Company) and its subsdiaries (the Group)

for the year ended 31 March 2024, which comprise the consolidated

balance sheet, consolidated income statement, consolidated

statement of total comprehensive income, consolidated statement

of changes in equity, consolidated cash flow statement and the

related notes 1 to 58 and 59, 60 and 64 excluding information

marked as ‘‘unaudited’’ and the Parent Company balance

sheet,statement of changes in shareholders’ equity an related notes

a to k. The financial reporting framework that has been applied in

their preparation is a special purpose framework comprising the

accounting policies set out on pages 80 to 91.

These annual financial statements have been prepared to

present the financial position and results of Investec plc and its

subsidiaries as if the contractual arrangements which create the

Dual Listed Company (DLC) structure did not exist and, with this

exception and the exclusion of certain other remuneration and

related party disclosures, are prepared in accordance with UK

adopted international accounting standards. For an

understanding of the financial position, results and cash flows

of the Investec DLC Group, the user is referred to the Investec

annual report 2024 – Investec annual financial statements.

Investec DLC Group consists of two separate legal entities,

being Investec plc and Investec Limited, that operate under a

DLC structure. The effect of the DLC structure is that Investec

plc and its subsidiaries and Investec Limited and its subsidiaries

operate together as a single economic entity, with neither

assuming a dominant role, and accordingly are reported as a

single reporting entity under International Financial Reporting

Standards (IFRS). These Group annual financial statements are

prepared in accordance with UK adopted international

accounting standards and IFRS as issued by the International

Accounting Standards Board (IASB).

As explained in the accounting policies set out on pages 80 to

91, these special purpose financial statements have been

prepared to present the financial position, results and cash

flows of Investec plc and its subsidiaries. For the avoidance of

doubt, they exclude Investec Limited and its subsidiaries.

In our opinion,

• the accompanying financial statements of the Group for the

year ended 31 March 2024 are prepared, in all material

respects, in accordance with the accounting policies set out

on pages 80 to 91, and

• The Parent Company financial statements have been properly

prepared in accordance with the United Kingdom Generally

Accepted Accounting Practice and the requirements of the

Companies Act 2006.

Basis for Opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) including ‘ISA (UK) 800

(Revised) Special Considerations – Audits of Financial Statements

Prepared in Accordance with Special Purpose Frameworks’. Our

responsibilities under those standards are further described in the

Auditor’s Responsibilities for the Audit of the Financial Statements

section of our report. We are independent of the Group and Parent

Company in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, including

the Financial Reporting Council (FRC) Ethical Standard, and we

have fulfilled our other ethical responsibilities in accordance with

these requirements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the

directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate. Our evaluation

of the directors’ assessment of the Group’s ability to continue to adopt

the going concern basis of accounting has included:

• understanding management’s going concern assessment

process, including obtaining an understanding of the business

planning process, assessing the Board approved budgets and

the reasonableness and completeness of assumptions

applied. In assessing these assumptions, we considered the

impact of the current macro-economic environment in which

the Group operates on future operating performance and the

principal risks affecting the Group;

• involving specialists to assess the results of management’s

stress testing, including consideration of principal and

emerging risks on funding, liquidity and regulatory capital. We

performed independent reverse stress testing by evaluating

the plausibility of the outcome under which regulatory

minimum requirements would be breached. In addition, we

evaluated the viability of management actions available to

mitigate erosion of capital and liquidity;

• assessed the Group’s compliance with external debt covenants;

• inspecting correspondence with the Prudential Regulatory

Authority (PRA) and Financial Conduct Authority (FCA) for

matters that may impact the going concern assessment; and

• evaluating the appropriateness and conformity of the going

concern disclosure included in the annual report with the

reporting standards and management’s going concern

assessment.

Based on the work we have performed, we have not identified

any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the

Group and Parent Company’s ability to continue as a going

concern for a 12-month period from the date the financial

statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with

respect to going concern are described in the relevant sections

of this report. However, because not all future events or

conditions can be predicted, this statement is not a guarantee

as to the Group’s ability to continue as a going concern.

Emphasis of Matter – Basis of Accounting

and Restriction on Distribution and Use

We draw attention to the accounting policies set out on pages

80 to 91 of the financial statements, which describe the basis of

accounting. The financial statements are prepared to assist the

Board of Investec plc in complying with the financial reporting

provisions of the contractual agreements referred to above. As

a result, the financial statements may not be suitable for

another purpose. Our report is intended solely for the members

of Investec plc in accordance with our engagement letter dated

17 June 2024. To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than the Parent

Company and the Parent Company's directors as a body, for

our audit work, for this report, or for the opinions we have

formed. Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the

annual report in sections 1 (pages 2 to 25), section 2 (pages 26

to 67), and pages marked as unaudited in section 3 (pages 69

to 217), other than the financial statements and our auditor’s



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INVESTEC PLC

report thereon. The directors are responsible for the other

information contained within the annual report.

Our opinion on the financial statements does not cover the

other information and, except to the extent otherwise explicitly

stated in this report, we do not express any form of assurance

conclusion thereon.

Our responsibility is to read the other information and, in doing

so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge

obtained in the course of the audit or otherwise appears to be

materially misstated. If we identify such material inconsistencies

or apparent material misstatements, we are required to

determine whether there is a material misstatement in the

financial statements themselves. If, based on the work we have

performed, we conclude that there is a material misstatement of

the other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors

Management is responsible for the preparation of the special

purpose financial statements in accordance with the financial

reporting provisions under the contractual arrangements

implementing the DLC structure, and for such internal control as

management determines is necessary to enable the preparation

of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, management is

responsible for assessing the Group’s ability to continue as a

going concern, disclosing, as applicable, matters relating to

going concern and using the going concern basis of accounting

unless management either intends to liquidate the Group or to

cease operations, or has no realistic alternative but to do so..

Those charged with governance are responsible for overseeing

the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of

the Financial Statements

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to

issue an auditor’s report that includes our opinion. Reasonable

assurance is a high level of assurance but is not a guarantee

that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered

material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of

users taken on the basis of these financial statements.

Explanation as to what extent the audit was

considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-compliance

with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect irregularities, including

fraud. The risk of not detecting a material misstatement due to

fraud is higher than the risk of not detecting one resulting from

error, as fraud may involve deliberate concealment by, for

example, forgery or intentional misrepresentations, or through

collusion. The extent to which our procedures are capable of

detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and

detection of fraud rests with both those charged with

governance of the entity and management.

• We obtained an understanding of the legal and regulatory

frameworks that are applicable to the Group and determined

that the most significant are those that relate to the reporting

framework (UK-adopted international accounting standards

and IFRS as issued by the IASB), the Companies Act 2006 and

the UK Corporate Governance Code, the FCA Listing Rules,

regulations and supervisory requirements of the PRA, FRC and

FCA regulatory requirements, and the relevant tax compliance

regulations in the jurisdictions in which the Group operates.

• We understood how the Group and the Parent Company are

complying with these legal and regulatory frameworks by

making enquiries of management, internal audit, and those

responsible for legal and compliance matters. We also

reviewed correspondence between the Group and the Parent

Company and regulatory bodies; reviewed minutes of the

Board, Audit Committee and Risk and Capital Committee; and

gained an understanding of the Group’s and the Parent

Company’s approach to governance.

• We assessed the susceptibility of the Groups financial

statements to material misstatement, including how fraud

might occur by considering the controls that the Group and

Parent Company have established to address risk identified

by the Group and the Parent Company, or that otherwise

seek to prevent, deter, or detect fraud. We also considered

performance incentives and their potential to influence

management to manage earnings.

• Based on this understanding, we designed our audit

procedures to identify non-compliance with such laws and

regulations. Our procedures involved making enquiries of

those charged with governance and senior management of

their awareness of any non-compliance with laws or

regulations, inquiring about the policies that have been

established to prevent non-compliance with laws and

regulations by officers and employees and inspecting key

correspondence with the PRA and FCA.

• Our procedures also involved testing journal entries using a

risk based approach analysing the general ledger data, with

the focus on nonstandard journals.

• The Group and the Parent Company operate in the banking

industry which is a highly regulated environment. As such the

Senior Statutory Auditor considered the experience and

expertise of the engagement team to ensure that the team

had the appropriate competence and capabilities, which

included the use of specialists where appropriate.

A further description of our responsibilities for the audit of

the financial statements is located on the Financial

Reporting Council’s website at https://www.frc.org.uk/

auditorsresponsibilities. This description forms part of

our auditor’s report.

Other matter

Investec plc has prepared a separate set of combined

consolidated statutory financial statements for the year ended

31 March 2024 in accordance with UK adopted international

accounting standards and IFRS as issued by the IASB, on which

we issued a separate auditor’s report to the shareholders

of Investec plc dated 24 June 2024.

Manprit Dosanjh

(Senior statutory auditor)

for and on behalf of

Ernst & Young LLP

London

24 June 2024



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INVESTEC PLC CONTINUED


For the year to 31 March
£’000	Notes	2024	2023^
Interest income	2	1 914 473	1 215 245
Interest income calculated using effective interest rate method		1 821 079	1 128 777
Other interest income		93 394	86 468
Interest expense	2	(1 103 546)	(501 025)
Net interest income		810 927	714 220
Fee and commission income	3	173 213	131 795
Fee and commission expense	3	(16 451)	(15 442)
Investment income	4	14 322	18 223
Share of post-taxation profit of associates and joint venture holdings	28	55 793	4 950
Trading income/(loss) arising from
– customer flow*		103 158	87 366
– balance sheet management and other trading activities		27 099	13 134
Other operating income	5	2 150	6 879
Operating income		1 170 211	961 125
Expected credit loss impairment charges	6	(85 995)	(66 752)
Operating income after expected credit loss impairment charges		1 084 216	894 373
Operating costs	7	(656 599)	(598 966)
Operating profit before goodwill, acquired intangibles and strategic actions		427 617	295 407
Impairment of goodwill	32	—	(805)
Amortisation of acquired intangibles	33	(940)	—
Amortisation of acquired intangibles of associate	28	(5 679)	—
Closure and rundown of the Hong Kong direct investments business		(784)	(480)
Operating profit		420 214	294 122
Financial impact of strategic actions		(16 576)	(402)
Profit before taxation		403 638	293 720
Taxation on operating profit before goodwill and strategic actions	10	(86 502)	(59 623)
Taxation on goodwill, acquired intangibles and strategic actions	10	727	—
Profit after taxation from continuing operations		317 863	234 097
Profit after taxation from discontinued operations	34	389 551	59 034
Profit after taxation		707 414	293 131
Profit attributable to non-controlling interests		(1 204)	—
Earnings attributable to shareholders		706 210	293 131

^Restated to reflect continuing operations and reversal of interest rate swaps gross-up as detailed in note 58.

*Included within Trading income/(loss) arising from customer flow, as required by IAS 1, is income of £105.1 million (31 March 2023: £90.6 million) and a net funding

cost of £1.9 million (31 March 2023: £3.2 million).



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED INCOME STATEMENT


For the year to 31 March
£’000	Notes	2024	2023^

Profit after taxation from continuing operations		317 863	234 097
Other comprehensive income/(loss) from continuing operations:
Items that may be reclassified to the income statement:
Fair value movements on cash flow hedges taken directly to other comprehensive income*		(9 971)	27 635
Gains on realisation of debt instruments at FVOCI recycled through the income statement*		(981)	(314)
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income*		6 243	218
Foreign currency adjustments on translating foreign operations		(3 652)	5 738
Effect rate change on deferred taxation relating to adjustment for IFRS 9		—	(7)
Items that will not be reclassified to the income statement:			—
Fair value movements on equity instruments at FVOCI taken directly to other comprehensive income		(13 396)	(76 400)
Share of other comprehensive income of associates and joint venture holdings		257	—
Total comprehensive income from continuing operations		296 363	190 967
Total comprehensive (loss)/income attributable to non-controlling interests from continuing operations		1 183	—
Total comprehensive income attributable to ordinary shareholders from continuing operations		274 538	174 087
Total comprehensive income attributable to perpetual preferred securities and Other Additional Tier 1 securities		20 642	16 880
Total comprehensive income from continuing operations		296 363	190 967

Profit after taxation from discontinued operations		389 551	59 034
Other comprehensive income/(loss) from discontinued operations:
Items that will not be reclassified to the income statement:
Movement in post-retirement benefit liabilities		—	75
Total comprehensive income from discontinued operations		389 551	59 109
Total comprehensive income attributable to non-controlling interests from discontinued operations		—	—
Total comprehensive income attributable to ordinary shareholders from discontinued operations		389 551	59 109
Total comprehensive income from discontinued operations		389 551	59 109

Profit after taxation		707 414	293 131
Other comprehensive income/(loss):
Items that may be reclassified to the income statement:
Fair value movements on cash flow hedges taken directly to other comprehensive income*		(9 971)	27 635
Gains on realisation of debt instruments at FVOCI recycled through the income statement*	10	(981)	(314)
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income*	10	6 243	218
Foreign currency adjustments on translating foreign operations		(3 652)	5 738
Effect of rate change on deferred taxation relating to adjustment for IFRS 9	10	—	(7)
Items that will not be reclassified to the income statement:
Fair value movements on equity instruments at FVOCI taken directly to other comprehensive income	10	(13 396)	(76 400)
Share of other comprehensive income of associates and joint venture holdings		257	—
Movement in post-retirement benefit liabilities		—	75
Total comprehensive income		685 914	250 076
Total comprehensive loss attributable to non-controlling interests		1 183	—
Total comprehensive income attributable to ordinary shareholders		664 089	233 196
Total comprehensive income attributable to perpetual preference securities and Other Additional Tier 1 securities		20 642	16 880
Total comprehensive income		685 914	250 076

*Net of £8.8 million tax charge ( 31 March 2023: £0.2 million tax credit), except for the impact of rate changes on deferred tax ation relating to adjustment for IFRS 9 as

shown separately above.

^Restated to reflect continuing operations as detailed in note 58.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


At 31 March
£’000	Notes	2024	2023
Assets
Cash and balances at central banks	17	5 661 623	5 400 401
Loans and advances to banks	18	676 464	893 297
Reverse repurchase agreements and cash collateral on securities borrowed	19	1 140 115	1 338 699
Sovereign debt securities	20	1 928 134	1 221 744
Bank debt securities	21	297 255	204 691
Other debt securities	22	708 285	697 275
Derivative financial instruments	23	437 255	634 123
Securities arising from trading activities	24	157 332	127 537
Loans and advances to customers	26	16 570 313	15 567 809
Other loans and advances	26	117 514	142 626
Other securitised assets	27	66 702	78 231
Investment portfolio	25	405 410	489 204
Interests in associated undertakings and joint venture holdings	28	857 247	52 320
Current taxation assets		31 200	34 324
Deferred taxation assets	29	119 730	112 347
Other assets	30	740 121	965 449
Property and equipment	31	72 947	121 014
Goodwill	32	68 669	255 267
Software	33	4 571	9 415
Other acquired intangible assets	33	—	40 550
		30 060 887	28 386 323
Liabilities
Deposits by banks		2 174 305	2 172 171
Derivative financial instruments	23	472 662	704 816
Other trading liabilities	35	18 449	28 184
Repurchase agreements and cash collateral on securities lent	19	85 091	139 529
Customer accounts (deposits)	36	20 790 611	19 121 921
Debt securities in issue	37	1 273 106	1 449 545
Liabilities arising on securitisation of other assets	27	71 751	81 609
Current taxation liabilities		8 672	5 370
Other liabilities	38	1 025 813	1 232 729
		25 920 460	24 935 874
Subordinated liabilities	39	668 810	731 483
		26 589 270	25 667 357
Equity
Ordinary share capital	40	202	202
Ordinary share premium	42	555 812	555 812
Treasury shares	43	(192 783)	(181 797)
Other reserves		(311 415)	(109 679)
Retained income		2 934 048	2 178 683
Ordinary shareholders’ equity		2 985 864	2 443 221
Perpetual preference share capital and premium	41	24 794	24 794
Shareholders’ equity excluding non-controlling interests		3 010 658	2 468 015
Other Additional Tier 1 securities in issue	44	458 108	250 000
Non-controlling interests in partially held subsidiaries	45	2 851	951
Total equity		3 471 617	2 718 966
Total liabilities and equity		30 060 887	28 386 323

Fani Titi

Group Chief Executive

24 June 2024



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED BALANCE SHEET


For the year to 31 March £’000	Notes	2024	2023
Profit before taxation adjusted for non-cash items	47	533 915	511 667
Taxation paid		(93 266)	(75 068)
Increase in operating assets	47	(1 485 569)	(1 229 997)
Increase in operating liabilities	47	1 364 461	425 009
Net cash inflow/(outflow) from operating activities		319 541	(368 389)
Cash flow on acquisition of Group operations, net of cash acquired		(28 559)	(9 720)
Cash flow on disposal of Group operations and subsidiaries		—	12
Derecognition of cash on deconsolidation and disposal of subsidiaries*		(172 615)	—
Cash flow on net disposal of non-controlling interests		—	118
Cash flow on net disposal/(acquisition) of associates and joint venture holdings		—	565
Cash flow on acquisition of property, equipment, software and other intangible assets		(3 848)	(11 712)
Cash flow on disposal of property, equipment, software and other intangible assets		157	23 975
Net cash (outflow)/inflow from investing activities		(204 865)	3 238
Dividends paid to ordinary shareholders		(94 405)	(88 463)
Dividends paid to other equity holders		(18 230)	(17 420)
Proceeds on issue of Other Additional Tier 1 instruments		350 000	—
Redemption of Other Additional Tier 1 instruments		(140 472)	—
Cash flow on acquisition of treasury shares, net of related costs		(54 008)	(36 832)
Proceeds from issue of subordinated debt		—	345 590
Redemption of subordinated debt		(70 000)	(347 926)
Lease liabilities paid		(42 444)	(44 089)
Net cash outflow from financing activities		(69 559)	(189 140)
Effects of exchange rates on cash and cash equivalents		(498)	773
Net increase/(decrease) in cash and cash equivalents		44 619	(553 518)
Cash and cash equivalents at the beginning of the year		6 288 252	6 841 770
Cash and cash equivalents at the end of the year		6 332 871	6 288 252
Cash and cash equivalents is defined as including:
Cash and balances at central banks		5 661 623	5 400 401
On demand loans and advances to banks		671 248	887 851
Cash and cash equivalents at the end of the year		6 332 871	6 288 252

*Includes cash and cash equivalents derecognised from Investec Wealth & Investment Limited balance sheet as a result of the all-share combination with Rathbones

Group PLC. There are no other cash flow impacts as a result of this transaction.

Cash and cash equivalents have a maturity profile of less than three months. Loans and advances to banks with a maturity profile

of greater than three months are £5.2 million ( 31 March 2023 : £5.4 million).

In the prior year, the Group was required to maintain reserve deposits with central banks and other regulatory authorities and these

amounted to £50.5 million. For the current year, this was replaced by a Bank of England Levy effective from 1 March 2024.

Included within net cash inflow/(outflow) from operating activities is Interest received of £1 848 million (2023: £1 184 million),

interest paid of £928 million (2023: £437 million) and dividends received of £13.2 million (2023: £19.8 million).

Cash flow from discontinued operations

Cash inflows from operating activities of £13.0 million (31 March 2023: cash inflows of £92.8 million), cash outflows from investing

activities of £0.6 million (31 March 2023: cash outflows of £15.3 million) and cash outflows from financing activities of £56.4 million

(31 March 2023: cash outflows of £40.4 million) were incurred in the year relating to discontinued operations. Cash flows from

discontinued operations have been included in the consolidated statement of cash flow above.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED CASH FLOW STATEMENT



£’000	Ordinary share capital	Ordinary share premium	Treasury shares
At 1 April 2022	202	806 812	(161 522)
Movement in reserves 1 April 2022 – 31 March 2023
Profit after taxation	—	—	—
Effect of rate change on deferred taxation relating to adjustment for IFRS 9	—	—	—
Gains on realisation of debt instruments at FVOCI recycled through the income statement	—	—	—
Fair value movements on cash flow hedges taken directly to other comprehensive income	—	—	—
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income	—	—	—
Fair value movements on equity instruments at FVOCI taken directly to other comprehensive income	—	—	—
Fair value movements on equity instruments transferred to retained earnings	—	—	—
Foreign currency adjustments on translating foreign operations	—	—	—
Movement in post-retirement benefit liabilities	—	—	—
Total comprehensive income for the year	—	—	—
Share-based payments adjustments	—	—	—
Employee benefit liability recognised	—	—	—
Dividends paid to ordinary shareholders	—	—	—
Dividends declared to perpetual preference shareholders	—	—	—
Dividends paid to perpetual preference shareholders	—	—	—
Dividends declared to Other Additional Tier 1 security holders	—	—	—
Dividends paid to Other Additional Tier 1 security holders	—	—	—
Transfer from share premium to retained income	—	(251 000)	—
Distribution to shareholders	—	—	—
Net equity impact of non-controlling interest movements	—	—	—
Movement of treasury shares	—	—	(20 275)
At 31 March 2023	202	555 812	(181 797)
Movement in reserves 1 April 2023 – 31 March 2024
Profit after taxation	—	—	—
Gains on realisation of debt instruments at FVOCI recycled through the income statement	—	—	—
Fair value movements on cash flow hedges taken directly to other comprehensive income	—	—	—
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income	—	—	—
Fair value movements on equity instruments at FVOCI taken directly to other comprehensive income	—	—	—
Foreign currency adjustments on translating foreign operations	—	—	—
Share of other comprehensive income of associates and joint venture holdings	—	—	—
Total comprehensive income for the year	—	—	—
Share-based payments adjustments	—	—	—
Transaction with equity holders	—	—	—
Issue of Other Additional Tier 1 security instruments	—	—	—
Redemption of Other Additional Tier 1 security instruments	—	—	—
Dividends paid to ordinary shareholders	—	—	—
Dividends declared to perpetual preference shareholders	—	—	—
Dividends paid to perpetual preference shareholders	—	—	—
Dividends declared to Other Additional Tier 1 security holders	—	—	—
Dividends paid to Other Additional Tier 1 security holders	—	—	—
Gain on Other Additional Tier 1 security instruments callback	—	—	—
Net equity impact of non-controlling interest movements	—	—	—
Movement of treasury shares	—	—	(10 986)
Release of capital reserve to retained income	—	—	—
At 31 March 2024	202	555 812	(192 783)



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Other reserves
Capital reserve account	Fair value reserve	Cash flow hedge reserve	Foreign currency reserves	Retained income	Ordinary shareholders' equity	Perpetual preference share capital and premium	Shareholders' equity excluding non-controlling interests	Other Additional Tier 1 securities in issue	Non- controlling interests	Total equity
(191 018)	160 075	—	7 029	1 782 961	2 404 539	24 794	2 429 333	250 000	833	2 680 166

—	—	—	—	293 131	293 131	—	293 131	—	—	293 131
—	(7)	—	—	—	(7)	—	(7)	—	—	(7)
—	(314)	—	—	—	(314)	—	(314)	—	—	(314)
—	—	27 635	—	—	27 635	—	27 635	—	—	27 635
—	218	—	—	—	218	—	218	—	—	218
—	(76 400)	—	—	—	(76 400)	—	(76 400)	—	—	(76 400)
—	(48 318)	—	—	48 318	—	—	—	—	—	—
—	—	—	5 738	—	5 738	—	5 738	—	—	5 738
—	—	—	—	75	75	—	75	—	—	75
—	(124 821)	27 635	5 738	341 524	250 076	—	250 076	—	—	250 076
—	—	—	—	5 095	5 095	—	5 095	—	—	5 095
—	—	—	—	(4 540)	(4 540)	—	(4 540)	—	—	(4 540)
—	—	—	—	(88 463)	(88 463)	—	(88 463)	—	—	(88 463)
—	—	—	—	(540)	(540)	540	—	—	—	—
—	—	—	—	—	—	(540)	(540)	—	—	(540)
—	—	—	—	(16 880)	(16 880)	—	(16 880)	16 880	—	—
—	—	—	—	—	—	—	—	(16 880)	—	(16 880)
—	—	—	—	251 000	—	—	—	—	—	—
—	—	—	—	(91 474)	(91 474)	—	(91 474)	—	—	(91 474)
—	—	—	—	—	—	—	—	—	118	118
5 683	—	—	—	—	(14 592)	—	(14 592)	—	—	(14 592)
(185 335)	35 254	27 635	12 767	2 178 683	2 443 221	24 794	2 468 015	250 000	951	2 718 966

—	—	—	—	706 210	706 210	—	706 210	—	1 204	707 414
—	(981)	—	—	—	(981)	—	(981)	—	—	(981)
—	—	(9 971)	—	—	(9 971)	—	(9 971)	—	—	(9 971)
—	6 243	—	—	—	6 243	—	6 243	—	—	6 243
—	(13 396)	—	—	—	(13 396)	—	(13 396)	—	—	(13 396)
—	—	—	(3 631)	—	(3 631)	—	(3 631)	—	(21)	(3 652)
—	—	—	—	257	257	—	257	—	—	257
—	(8 134)	(9 971)	(3 631)	706 467	684 731	—	684 731	—	1 183	685 914
—	—	—	—	(13 736)	(13 736)	—	(13 736)	—	—	(13 736)
—	—	—	—	(2 971)	(2 971)	—	(2 971)	—	—	(2 971)
—	—	—	—	—	—	—	—	350 000	—	350 000
—	—	—	—	—	—	—	—	(141 892)	—	(141 892)
—	—	—	—	(94 405)	(94 405)	—	(94 405)	—	—	(94 405)
—	—	—	—	(1 455)	(1 455)	1 455	—	—	—	—
—	—	—	—	—	—	(1 455)	(1 455)	—	—	(1 455)
—	—	—	—	(20 642)	(20 642)	—	(20 642)	20 642	—	—
—	—	—	—	—	—	—	—	(20 642)	—	(20 642)
—	—	—	—	1 420	1 420	—	1 420	—	—	1 420
—	—	—	—	—	—	—	—	—	717	717
687	—	—	—	—	(10 299)	—	(10 299)	—	—	(10 299)
(180 687)	—	—	—	180 687	—	—	—	—	—	—
(365 335)	27 120	17 664	9 136	2 934 048	2 985 864	24 794	3 010 658	458 108	2 851	3 471 617



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED

Basis of presentation

These annual financial statements have been prepared to

present the financial position and results of Investec plc and its

subsidiaries as if the contractual arrangements which create the

dual listed company (DLC) structure did not exist and, with the

exception of certain other remuneration and related party

disclosures, which are prepared in accordance with UK adopted

international accounting standards. For an understanding of the

financial position, results and cash flows of the Investec DLC

Group, the user is referred to Investec’s integrated annual report.

Investec DLC Group consists of two separate legal entities,

being Investec plc and Investec Limited, that operate under

a DLC structure. The effect of the DLC structure is that Investec

plc and its subsidiaries and Investec Limited and its subsidiaries

operate together as a single economic entity, with neither

assuming a dominant role, and accordingly are reported as a

single reporting entity under International Financial Reporting

Standards (IFRS).

These Group annual financial statements have been prepared

in accordance with UK adopted international accounting

standards and with IFRS as issued by the International

Accounting Standards Board (IASB).

The Group annual financial statements have been prepared on

historical cost basis, except for debt instruments at FVOCI,

derivative financial instruments, financial assets and financial

liabilities held at fair value through profit or loss or subject

to hedge accounting.

As stated on page 60, the directors consider that it is

appropriate to continue to adopt the going concern basis

in preparing the financial statements.

The accounting policies adopted by the Group are consistent

with the prior year.

The Group has adopted International Tax Reform - Pillar Two

Model Rules (Amendments to lAS 12) upon their release on 23

May 2023. The amendments provide a temporary mandatory

exception from deferred tax accounting for the top-up tax,

which is effective immediately, and require new disclosures

about the Pillar Two exposure. The mandatory exception

applies retrospectively.

IFRS 17 – Insurance contracts

IFRS 17 was effective for accounting periods beginning on or

after 1 January 2023 but the impact to the Group is not material.

Presentation of information

Disclosure under IFRS 7 Financial Instruments: Disclosures

and IAS 1 Presentation of Financial Statements: relating

to the nature and extent of risks have been included in the

notes to risk and capital management on pages 164 to 205.

Certain disclosures required under IAS 24 Related Party

Disclosures have been included in the section marked as

audited in the remuneration report which forms part of the

Investec Group's integrated annual report.

Basis of consolidation

As discussed above, these annual financial statements have

been prepared to present the financial position and results

of Investec plc and its subsidiaries as if the contractual

arrangements which create the DLC structure did not exist.

All subsidiaries or structured entities are consolidated when the

Group controls an investee. The Group controls an investee if it

is exposed to, or has rights to variable returns from its

involvement with the investee and has the ability to affect those

returns through its power over the investee. The financial

results of subsidiaries are included in the consolidated annual

financial statements of the Group from the date on which

control is obtained until the date the Group can no longer

demonstrate control.

The Group performs a reassessment of control whenever there

is a change in the substance of the relationship between the

Group and an investee. A change in the ownership interest

of a subsidiary, without a loss of control, is accounted for as

an equity transaction.

If the Group loses control over a subsidiary, it derecognises the

related assets (including goodwill), liabilities, non-controlling

interest and other components of equity, while any resultant

gain or loss is recognised in profit or loss. Any investment

retained is recognised at fair value.

The Group also holds investments, for example, in private equity

investments, which give rise to significant, but not majority,

voting rights. Assessing these voting rights and whether the

Group controls these entities requires judgement that affects

the date at which subsidiaries are consolidated

or deconsolidated.

Entities, other than subsidiary undertakings, in which the Group

exercises significant influence or joint control over operating

and financial policies, are treated as interests in associated

undertakings and joint venture holdings. Interests in associated

undertakings and joint venture holdings are accounted for using

the equity method from the date that significant influence or

joint control commences until the date that significant influence

or joint control ceases. In circumstances where interests in

associated undertakings and joint venture holdings arise in

which the Group has no strategic intention, these investments

are classified as ‘venture capital’ holdings and are elected as

held at fair value through profit or loss.

For equity accounted associates and joint venture holdings, the

consolidated annual financial statements include the

attributable share of the results and reserves of associated

undertakings and joint venture holdings. The Group’s interests

in associated undertakings and joint venture holdings are

included in the consolidated balance sheet at cost plus the

post-acquisition changes in the Group’s share of the net assets

of the associated undertakings and joint venture holdings.

The consolidated balance sheet reflects the associated

undertakings and joint venture holdings net of accumulated

impairment losses.

All intergroup balances, transactions and unrealised gains or

losses within the Group that do not reflect an impairment to the

asset are eliminated in full regarding subsidiaries and to the

extent of the interest in associated undertakings and joint

venture holdings.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES

Segmental reporting

An operating segment is a component of the Group that

engages in business activities from which it may earn revenues

and incur expenses, including revenues and expenses that

relate to transactions with any of the Group’s other

components, where operating results are reviewed regularly

by chief operating decision-makers who are considered to be

executive members of the Board and for which discrete

financial information is available.

The Group’s segmental reporting is presented in the form of a

business analysis. The business analysis is presented in terms

of the Group’s four principal business divisions namely, Wealth &

Investment, Private Banking, Corporate, Investment Banking,

and Other and Group Investments.

Group costs that are disclosed separately largely relate to

Group brand and marketing costs and a portion of executive

and support functions which are associated with Group-level

activities. These costs are not incurred by the operating

divisions and are necessary to support the operational

functioning of the Group.

Business combinations and goodwill

Business combinations are accounted for using the acquisition

method. The cost of an acquisition is measured as the

aggregate of the consideration transferred at the acquisition

date fair value and the amount of any prior non-controlling

interest in the acquiree. For each business combination, the

Group measures the non-controlling interest in the acquiree

either at fair value or at the proportionate share of the

acquiree’s identifiable net assets. Acquisition costs incurred are

expensed immediately in the income statement.

When the Group acquires a business, it assesses the financial

assets and liabilities assumed for appropriate classification and

the designation in accordance with the contractual terms,

economic circumstances and pertinent conditions at the

acquisition date. This includes the separation of embedded

derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the

acquisition date fair value of the Group’s previously held equity

interest in the acquiree is remeasured to fair value at the

acquisition date through the income statement.

Any contingent consideration to be transferred by the Group

will be recognised at fair value at the acquisition date.

Subsequent changes to the fair value of the contingent

consideration, which is deemed to be an asset or liability, will be

recognised in accordance with IFRS 9, either in the income

statement or as a change to other comprehensive income. If the

contingent consideration is classified as equity, it will not be

remeasured until it is finally settled within equity.

Goodwill is initially measured at cost, being the excess of the

aggregate of the consideration transferred and the amount

recognised for non-controlling interest over the net identifiable

assets acquired and liabilities assumed. If this consideration and

amount recognised for non-controlling interest is less than the

fair values of the identifiable net assets acquired, the discount

on acquisition is recognised directly in the income statement as

a gain in the year of acquisition.

After initial recognition, goodwill is measured at cost less any

accumulated impairment losses. The Group tests goodwill

acquired in a business combination for impairment annually,

irrespective of whether an indication of impairment exists and in

accordance with IAS 36.

For the purpose of impairment testing, goodwill acquired in a

business combination is, from the acquisition date, allocated to

each of the Group’s cash-generating units that are expected to

benefit from the combination.

Where goodwill forms part of a cash-generating unit, and part of

the operation within that unit is disposed of, the goodwill

associated with the operation disposed of is included in the

carrying amount of the operation when determining the gain or

loss on disposal of the operation.

Goodwill disposed of in these circumstances is measured based

on the relative values of the operation disposed of and the

portion of the cash-generating units retained.

Discontinued operations

A disposal group qualifies as a discontinued operation if it is a

component of an entity that has either been disposed of or is

classified as held for sale and represents a separate major line

of business or geographical area of operations.

Discontinued operations are excluded from the results of

continuing operations and are presented as a single amount as

profit or loss after tax from discontinued operations in the

income statement.

All other notes to the financial statements include amounts for

continuing operations, unless indicated otherwise. Additional

disclosures are provided in note 34.

Share-based payments to employees

The Group engages in equity-settled share-based payments in

respect of services received from employees.

The fair value of the services received in respect of equity-

settled share-based payments is determined by reference to

the fair value of the shares or share options on the date of grant

to the employee. The cost of the share-based payment,

together with a corresponding increase in equity, is recognised

in the income statement over the period the service conditions

of the grant are met, with the amount changing according to the

number of awards expected to vest. The cumulative expense

recognised for equity-settled transactions at each reporting

date until the vesting date reflects the extent to which the

vesting period has expired and the Group’s best estimate of the

number of equity instruments that will ultimately vest.

Fair value measurements are based on option pricing models,

taking into account the risk-free interest rate, volatility of the

underlying equity instrument, expected dividends and share

prices at grant date.

Where the terms of an equity-settled award are modified, the

minimum expense recognised in staff costs is the expense as if

the terms had not been modified. An additional expense is

recognised for any modification which increases the total fair

value of the share-based payment arrangement, or is otherwise

beneficial to the employee as measured at the date of

modification.

The loss of control of an employing subsidiary of the Group

gives rise to an acceleration of the equity-settled share-based

payments charge for the related employees and, on loss of

control, the Group recognises the amount that would have been

recognised for the award if it remained in place on its original

terms.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

Employee benefits

The Group operates various defined contribution schemes.

In respect of the defined contribution schemes, all employer

contributions are charged to the income statement as incurred,

in accordance with the rules of the scheme, and included under

staff costs.

Short-term employee benefits are expensed as the related

service is provided. A liability is recognised for the amount

expected to be paid if the Group has a present legal or

constructive obligation to pay this amount as a result of past

service provided by the employee and the obligation can be

estimated reliably.

The long-term employment benefits liability relates to the

obligation of the Investec Group to deliver ordinary shares

of Ninety One plc to employees over a predetermined vesting

period. The fair value of this liability is calculated by applying

the Black-Scholes option pricing model at each reporting date.

The changes in fair value will be recognised as an employee

benefit expense. The liability is included in other liabilities on the

balance sheet.

The Group has no liabilities for other post-retirement benefits.

Foreign currency transactions and foreign

operations

The presentation currency of the Group is Pound Sterling, being

the functional currency of Investec plc.

Foreign operations are subsidiaries, interests in associated

undertakings and joint venture holdings or branches of the

Group, the activities of which are based in a functional currency

other than that of the reporting entity. The functional currency

of Group entities is determined based on the primary economic

environment in which the entity operates.

Foreign currency transactions are translated into the functional

currency of the entity in which the transactions arise based on

rates of exchange ruling at the date of the transactions.

At each balance sheet date foreign currency items are

translated as follows:

• Monetary items (other than monetary items that form part of

the net investment in a foreign operation) are translated using

closing rates, with gains or losses recognised in the income

statement

• Exchange differences arising on monetary items that form

part of the net investment in a foreign operation are

determined using closing rates and recognised as a separate

component of equity (foreign currency translation reserve)

upon consolidation and are reclassified to the income

statement upon disposal of the net investment

• Non-monetary items that are measured at historical cost are

translated using the exchange rates ruling at the date of the

transaction.

On consolidation, the results and financial position of foreign

operations are translated into the presentation currency of the

Group, as follows:

• Assets and liabilities for each balance sheet presented are

translated at the closing rate at the date of the balance sheet

• Income and expense items are translated at exchange rates

ruling at the date of the transaction

• All resulting exchange differences are recognised in other

comprehensive income (foreign currency translation reserve),

which is recognised in the income statement on disposal of

the foreign operation

• Cash flow items are translated at the exchange rates ruling at

the date of the transactions.

On loss of control or disposal of a foreign operation, the

cumulative amount of the exchange differences relating to that

foreign operation recognised in other comprehensive income is

reclassified from equity to profit or loss.

Revenue recognition

Revenue consists of interest income, fee and commission income,

investment income, trading income arising from customer flow,

trading income arising from balance sheet management and other

trading activities, share of post-taxation profit of associates and

joint venture holdings and other operating income.

Interest income on debt instruments at amortised cost or FVOCI

is recognised in the income statement using the effective

interest method. Calculation of the effective interest rate takes

into account fees payable or receivable that are an integral part

of the instrument's yield, premiums or discounts on acquisition

or issue, early redemption fees and transaction costs.

The effective interest method is based on the estimated life of

the underlying instrument and, where this estimate is not readily

available, the contractual life. Interest on instruments at fair

value through profit or loss is recognised based on the

contractual rates.

Fee and commission income includes revenue from contracts

with customers earned from providing advisory services as well

as portfolio management.

Revenue from contracts with customers is recognised in

accordance with five steps to: identify the contract; identify the

performance obligations; determine the transaction price;

allocate the transaction price to the performance obligations;

and recognise revenue when the performance obligations are

satisfied.

Investment advisory and management fees are earned over the

period in which the services are provided. Performance fees

can be variable and recognition is constrained until such time as

it is highly probable that a significant reversal in the amount of

cumulative revenue recognised will not occur and the services

related to the transactions have been completed under the

terms of the contract.

Investment income includes income, other than margin from

securities held for the purpose of generating interest yield,

dividends and capital appreciation.

Customer flow trading income includes income from trading

activities arising from making and facilitating client activities.

Trading income arising from balance sheet management and

other trading activities consists of proprietary trading income and

other gains or losses arising from balance sheet management.

Trading profit includes the unrealised profit on trading

portfolios, which are marked-to-market daily. Equity

investments received in lieu of corporate finance fees are

included in investment portfolio and valued accordingly.

Dividend income is recognised when the Group’s right to

receive payment is established and the cash is received.

Included in other operating income is incidental rental income,

gains on realisation of properties, operating lease income, income

from interests in associated undertakings and revenue from other

investments. Operating costs associated with these investments

are included in operating costs in the income statement.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

Fair value measurement

Fair value is the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between

market participants at the measurement date in the principal

or, in its absence, the most advantageous market to which

the Group has access at that date. The fair value of an asset

or a liability reflects its non-performance risk.

When available, the Group measures the fair value of an

instrument using the quoted price in an active market for that

instrument.

If there is no quoted price in an active market, then the Group

uses valuation techniques that maximise the use of relevant

observable inputs and minimise the use of unobservable inputs.

The chosen valuation technique incorporates all of the factors

that market participants would take into account in pricing

a transaction.

If an asset or a liability measured at fair value has a bid price and

an ask price, then the Group measures assets and long positions

at a bid price and liabilities and short positions at an ask price.

The Group classifies disclosed fair values according to a hierarchy

that reflects the significance of observable market inputs.

A transfer is made between the hierarchy levels when the inputs

have changed or there has been a change in the valuation

method. Transfers are deemed to occur at the end of each semi-

annual reporting period.

Financial instruments

Financial instruments are initially recognised at their fair value.

For financial assets or financial liabilities not held at fair value

through profit or loss, transaction costs that are directly

attributable to the acquisition or issue of the financial assets

or financial liabilities are included in the initial measurement.

All other transaction costs are recorded in the income

statement immediately. Regular way purchase and sales

transactions in respect of financial assets that require delivery

of a financial instrument within the time frame established by

market convention are recorded at trade date.

Business model assessment

For financial assets, IFRS 9 requires that a business model

assessment is carried out which reflects how the Group

manages the assets in order to generate cash flows. The

assessment is at a portfolio level, being the level at which the

portfolio is managed. Factors considered by the Group in

determining the business model for a Group of assets include

past experience on how the cash flows for these assets were

collected, how the assets’ performance is evaluated and

reported and how risks are assessed and managed.

The standard sets out different types of business models:

▪ Hold to collect: it is intended to hold the asset to maturity to

earn interest, collecting repayments of principal and interest

from the customer. These assets are accounted for at

amortised cost

▪ Hold to collect and sell: this model is similar to the hold to

collect model, except that the entity may elect to sell some

or all of the assets before maturity to achieve the objectives

of the business model. These assets are accounted for at

FVOCI

▪ Hold to sell/managed on a fair value basis: the entity

originates or purchases an asset with the intention of

disposing of it in the short or medium term to benefit from

capital appreciation or the portfolio is managed on a fair value

basis. These assets are accounted for at FVPL.

However, the Group may make the following irrevocable

election/designation at initial recognition of a financial asset

on an asset-by-asset basis:

▪ Elect to present subsequent changes in fair value of an equity

investment that is neither held for trading nor contingent

consideration recognised by an acquirer in a business

combination to which IFRS 3 applies, in OCI

▪ A debt instrument that meets the amortised cost or FVOCI

criteria as measured at FVPL if doing so eliminates or

significantly reduces an accounting mismatch (referred

to as the fair value option).

The classification into one of these categories is based on the

Group’s business model for managing the assets and the

contractual cash flow characteristics of the assets.

Solely payments of principal and interest (SPPI)

Where the business model is to hold assets to collect

contractual cash flows or to collect contractual cash flows

and sell, the Group assesses whether the assets’ cash flows

represent solely payments of principal and interest (the

SPPI test). In making this assessment, the Group considers

whether the contractual cash flows are consistent with a basic

lending arrangement (i.e. interest includes only consideration

for the time value of money, credit risk, other basic lending risks

and a profit margin that is consistent with a basic lending

arrangement). Where the contractual terms introduce exposure

to risk or volatility that are inconsistent with a basic lending

arrangement, the related asset is classified and measured

at FVPL.

Financial assets with embedded derivatives are considered

in their entirety when determining whether their cash flows

are solely payments of principal and interest.

Financial instruments measured at amortised cost

Financial assets that are held to collect the contractual cash

flows and that contain contractual terms that give rise to cash

flows that are solely payments of principal and interest, such

as most loans and advances to banks and customers and some

debt securities, are measured at amortised cost. In addition,

most financial liabilities are measured at amortised cost.

The Group may commit to provide a loan which has not yet

been drawn. When the loan that arises from the lending

commitment is expected to meet the criteria to be measured

at amortised cost, the undrawn commitment is also considered

to be and is included in the impairment calculation.

The carrying value of these financial assets at initial recognition

includes any directly attributable transaction costs. If the initial

fair value is lower than the cash amount advanced, such as in

the case of some leveraged finance and syndicated lending

activities, the difference is deferred and recognised over the

life of the loan through the recognition of interest income,

unless the loan is credit impaired.

Financial assets measured at fair value through

other comprehensive income (FVOCI)

Financial assets held for a business model that is achieved

by both collecting contractual cash flows and selling and that

contain contractual terms that give rise on specified dates

to cash flows that are solely payments of principal and interest

are measured at FVOCI. They are recognised on the trade date

when the Group enters into contractual arrangements to

purchase and are normally derecognised when they are either

sold or redeemed.

They are subsequently remeasured at fair value and changes

therein (except for those relating to impairment, interest



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

income and foreign currency exchange gains and losses)

are recognised in other comprehensive income until the assets

are sold. Upon disposal, the cumulative gains or losses in other

comprehensive income are recognised in the income statement

as ‘Gains less losses arising from derecognition of debt

instruments measured at fair value through other

comprehensive income’.

Financial assets measured at FVOCI are included in the

impairment calculations set out below and impairment

is recognised in profit or loss.

Equity instruments measured at FVOCI

The Group measures equity instruments at FVOCI when it

considers the investments to be strategic or held for long-term

dividend yield. The equity instruments are not held for trading.

Gains or losses on the derecognition of these equity securities

are not transferred to profit or loss.

Otherwise, equity instruments are measured at fair value

through profit or loss (except for dividend income, which is

recognised in profit or loss).

Impairment of financial assets held at amortised

cost or FVOCI

At each balance sheet date, each financial asset or portfolio

of advances categorised at amortised cost or at FVOCI, issued

financial guarantee and loan commitment is measured for

ECL impairment.

The costs of loss allowances on assets held at amortised cost

and at FVOCI are presented as impairments in the income

statement. Allowances in respect of financial guarantees and

loan commitments are presented as other liabilities and charges

recorded within income statement impairments. Financial assets

held at amortised cost are presented net of allowances, except

where the asset has been wholly or partially written off.

Stage 1

Financial assets that are considered performing and have not

had a significant increase in credit risk are reported as Stage 1

assets. Stage 1 financial assets have loss allowances measured

at an amount equal to a 12-month ECL.

Stage 2

Financial assets are considered to be in Stage 2 when their

credit risk has increased significantly since initial recognition.

A loss allowance equivalent to a lifetime ECL is required

to be held.

The Group’s primary indicator for Stage 2 assets are distressed

loans, potential problem loans and exposures in arrears that

require additional attention and supervision from watchlist

committees and are under management review.

Assets in forbearance are considered to be, at a minimum,

Stage 2. Forbearance measures refer to concessions such

as modification of the terms and conditions or refinancing

that has been granted to a debtor in financial difficulty.

These exposures are assessed on a case-by-case basis

to determine whether the proposed modifications will be

considered as forbearance. Where the Credit Committee

considers it likely that the client will be able to return to perform

against the original contractual obligations within a reasonable

time frame these assets will be considered performing and

in Stage 2. Forbearance is distinguished from commercial

renegotiations which take place as part of normal business

activity and standard banking practice.

In addition to loans under management review, an asset may

also move from Stage 1 to Stage 2 if the model calculated

probability of default (PD) has significantly increased since

origination. This is tested on both a relative and absolute basis

to assess whether a significant deterioration in lifetime risk of

default has occurred. There is a common definition across the

Bank’s exposures regarding what constitutes a significant PD

movement. The test involves both an absolute and relative

movement threshold. An asset is considered to have been

subjected to a significant increase in credit risk if the

appropriate PD has doubled relative to the value at origination

and on an absolute basis has increased by more than 1%. Any

asset with an original rating that is classified as investment

grade will be judged to have had a significant movement if the

new PD would classify it as sub-investment grade and the

equivalent rating has moved by more than three notches.

The Group adopts the view that all financial assets that are

more than 30 days past due have experienced a significant

increase in credit risk.

Exposures move back to Stage 1 once they no longer meet the

criteria above for a significant increase in credit risk and as cure

periods (specifically relating to forborne exposures) are met.

Stage 3

Financial assets are included in Stage 3 when there is objective

evidence of credit impairment. The Group assesses a loan as

Stage 3 when contractual payments of either principal or

interest are past due for more than 90 days, the debtor is

assessed as unlikely to pay and credit impaired, or the loan is

otherwise considered to be in default, for example, due to the

appointment of an administrator or the client is in receivership.

Forborne loans that are considered non-performing, for

example, if a loan is not expected to meet the original

contractual obligations in a reasonable time frame, the loan will

be classified as Stage 3. Loans which are 90 days or more past

due are considered to be in default.

The Group calculates the credit adjusted effective interest rate

on Stage 3 assets, which is calculated based on the amortised

cost of the financial asset (i.e. gross carrying amount less ECL

allowance) instead of its gross carrying amount and

incorporates the impact of the ECLs in estimated future cash

flows.

Definition of default

The Group has aligned the IFRS 9 and regulatory definitions of

default, credit impaired and non-performing exposure. Assets

that are more than 90 days past due, or considered by

management as unlikely to pay their obligations in full without

realisation of collateral are considered as exposures in default.

ECL

The assessment of credit risk and the estimation of ECL are

required to be unbiased, probability-weighted and should

incorporate all available information relevant to the assessment,

including information about past events, current conditions and

reasonable and supportable forecasts of economic conditions

at the reporting date. In addition, the estimation of ECL should

take into account the time value of money. As a result, the

recognition and measurement of impairment is intended to be

forward‑looking and therefore, potentially volatile.

Write-offs

The Group has developed specific guidelines on write-off aimed

at granting full compliance with IFRS 9 and the document

'Guidance to banks on non-performing loans' issued by the

European Central Bank.

A loan or advance is normally written off in full against the

related ECL impairment allowance when the proceeds from

realising any available security have been received or there is a



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

reasonable amount of certainty that the exposure will not be

recovered. This is assessed on a case-by-case basis with

considerations to indicators such as whether the exposure has

been restructured or the given financial position of the borrower

and guarantors. Any recoveries of amounts previously written

off decrease the amount of impairment losses.

Cured assets

Loans and advances are regularly assessed to determine

whether conditions which led to a significant increase in credit

risk or impairment still exist. Where applicable, the cured asset

will move to the appropriate performing stage which reflects the

re-assessed credit risk in line with our Arrears, default and

recovery (ADR) policy which is aligned to the applicable

Regulatory requirements.

Process to determine ECL

ECLs are calculated using three main components:

• A probability of default (PD)

• A loss given default (LGD)

• The exposure at default (EAD).

The 12-month and lifetime PDs represent the probability of a

default occurring over the next 12 months or the lifetime of the

financial exposures, respectively, based on conditions existing

at the balance sheet date and future forecast macro-economic

conditions that affect credit risk.

The LGD represents losses expected on default, taking into

account the mitigating effect of collateral, its expected value

when realised and the time value of money.The forecast value

for the collateral is also affected by the range of forward-

looking probability-weighted macro-economic scenarios.

The EAD represents the expected balance at default, taking into

account the repayment of principal and interest from the

balance sheet date to the default event together with any

expected drawdown of a committed facility.

The calculation of the 12-month ECL is based on the 12-month

PD and LGD along with the EAD and EIR for the asset. Lifetime

ECL is calculated using the lifetime PD curve, and the

appropriate LGDs and EADs and discount rates derived from

the EIR based on the remaining life of the financial asset.

Expert judgement models or appropriate proxies for PD’s are

also utilised for certain portfolios where the ECL is found to be

minimal, either due to the portfolio’s small relative size or the

low default nature of these portfolios, such as cash and

balances held at central banks.

Management adjustments are made to modelled output to

account for situations where additional information and known

or expected risk factors have not been captured in the

modelling process.

Financial instruments held at fair value through

profit or loss (FVPL)

Financial instruments held at fair value through profit or loss

include all instruments classified as held for trading, those

instruments designated as held at fair value through profit

or loss and those financial assets which do not meet the criteria

for amortised cost or FVOCI.

Financial instruments classified as FVPL are initially recorded

at fair value on the balance sheet with changes in fair value

subsequently recognised in the income statement. Financial

instruments are classified as held for trading when they are

held with the intention of short-term disposal, held with the

intention of generating short-term profit, or are derivatives

which are not designated as part of effective hedges. Financial

instruments designated as held at fair value through profit

or loss are designated as such on initial recognition of the

instrument and remain in this classification until derecognition.

Financial assets and liabilities are designated as held at fair

value through profit or loss only if:

• They eliminate or significantly reduce a measurement or

recognition inconsistency that would otherwise arise from

measuring assets or liabilities or recognising the gains and

losses on them on different bases; or

• A group of financial liabilities or both financial assets and

financial liabilities is managed and their performances

evaluated on a fair value basis in accordance with a

documented risk management or investment strategy and

information about the Group is provided internally on that

basis to the Group’s key management personnel; or

• A financial liability contract contains one or more embedded

derivatives (which significantly modifies the cash flows that

would be required by the contract and is not clearly

prohibited from separation from the host contract) and the

Group has designated the entire hybrid contract as a financial

instrument at fair value through profit or loss.

Changes in own credit risk on financial liabilities designated

at fair value are recognised in other comprehensive income.

Any other changes are recognised in the income statement.



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Securitisation/credit investment and trading

activities exposures

The Group makes use of securitisation vehicles as a source

of finance, as a means of risk transfer and to leverage returns

through the retention of equity tranches in low default rate

portfolios. The Group predominantly focuses on the

securitisation of residential and commercial mortgages and

lease receivables. The Group also trades in structured credit

investments.

The structured entities are consolidated under IFRS 10

Consolidated Financial Statements when the Group has

exposure to, or rights to, variable returns from its involvement

with the investee and has the ability to affect those returns

through its power over the investee.

Loans and advances that are originated are transferred to

structured entities, and the structured entities issue debt

securities to external investors to fund the purchase of the

securitised assets. When the Group consolidates the structured

entity, the Group recognises the assets and liabilities on a gross

basis. When the Group does not consolidate the structured

entity, the securitised assets are derecognised and only any

position still held by the Group in the structured entity is

reflected.

Day-one profit or loss

When the transaction price differs from the fair value of other

observable current market transactions in the same instrument

or based on the valuation technique whose variables include

only data from observable markets, the difference between the

transaction price and fair value is recognised immediately in the

income statement.

In cases where fair value is determined using data which is not

observable, the difference between the transaction price and

model value is only recognised in the income statement when

the inputs become observable, or when the instrument is

derecognised or over the life of the transaction.

Derecognition of financial assets and liabilities

A financial asset, or a portion thereof, is derecognised when the

Group’s rights to cash flows have expired or when the Group

has transferred its rights to cash flows relating to the financial

assets and either (a) the Group has transferred substantially all

the risks and rewards associated with the financial assets or (b)

the Group has neither transferred nor retained substantially all

the risks and rewards associated with the financial assets but

has transferred control of the assets.

The treatment of a renegotiation or modification of the

contractual cash flows of a financial asset depends upon

whether the modification is done for commercial reasons,

in which case if they are significant the old asset is

derecognised and a new asset recognised, or because

of financial difficulties of the borrower.

A financial liability is derecognised when it is extinguished,

that is when the obligation is discharged, cancelled or expired.

When an existing financial liability is replaced or modified with

substantially different terms, such a replacement or

modification is treated as a derecognition of the original liability

and the recognition of a new liability. The difference in the

respective carrying amounts is recognised in the income

statement.

Reclassification of financial instruments

Financial assets are only reclassified where there has been

a change in business model. Financial liabilities can be

reclassified to equity.

Derivative instruments

All derivative instruments of the Group are recorded on the

balance sheet at fair value positive and negative fair values are

reported as assets and liabilities, respectively.

Derivative positions are entered into either for trading purposes

or as part of the Group’s asset and liability management

activities to manage exposures to interest rate and foreign

currency risks. Both realised and unrealised profit or losses

arising on derivatives are recognised in the income statement

as part of trading income (other than circumstances in which

cash flow hedging is applied as detailed in the hedge

accounting section below).

Derivative instruments entered into as economic hedges which

do not qualify for hedge accounting and derivatives that are

entered into for trading purposes are treated in the same way

as instruments that are held for trading.

Credit derivatives are entered into for trading purposes. Credit

derivatives are initially recognised at their fair values, being the

transaction price of the derivative. Subsequently the derivatives

are carried at fair value, with movements in fair value through

the income statement, based on the current market price or

remeasured price. The counterparty risk from derivative

transactions is taken into account when reporting the fair value

of derivative positions. The adjustment to the fair value is

known as the credit value adjustment (CVA).

Hedge accounting

When the Group first implemented IFRS 9, it made an election

to continue to apply the hedge accounting requirements of

IAS 39 as an accounting policy.

The Group applies either fair value or cash flow hedge or hedge

accounting of net investments in foreign operations accounting

when the transactions meet the specified hedge accounting

criteria.

To qualify for hedge accounting treatment, the Group ensures

that all of the following conditions are met:

• At inception of the hedge, the Group formally documents the

relationship between the hedging instrument(s) and hedged

item(s) including the risk management objectives and the

strategy in undertaking the hedge transaction. Also at the

inception of the hedge relationship, a formal assessment

is undertaken to ensure the hedging instrument is expected

to be highly effective in offsetting the designated risk in the

hedged item. A hedge is expected to be highly effective if the

changes in fair value or cash flows attributable to the hedged

risk during the period for which the hedge is designated are

expected to offset in a range of 80% to 125%

• For cash flow hedges, a forecasted transaction that is the

subject of the hedge must be highly probable and must

present an exposure to variations in cash flows that could

ultimately affect the income statement

• The effectiveness of the hedge can be reliably measured,

i.e. the fair value or cash flows of the hedged item that are

attributable to the hedged risk and the fair value of the

hedging instrument can be reliably measured

• The hedge effectiveness is assessed on an ongoing basis

and determined actually to have been highly effective

throughout the financial reporting periods for which the

hedge was designated.

For qualifying fair value hedges, the change in fair value of the

hedging instrument is recognised in the income statement.

Changes in fair value of the hedged item that is attributable to

the hedged risk are also recognised in the income statement.



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For qualifying cash flow hedges in respect of non-financial assets

and liabilities, the change in fair value of the hedging instrument

relating to the effective portion is initially recognised directly in

other comprehensive income in the cash flow hedge reserve and

is included in the initial cost of any asset/liability recognised or in

all other cases released to the income statement when the

hedged firm commitment or forecasted transaction affects net

profit. If the forecast transaction or firm commitment is no longer

expected to occur, the balance included in other comprehensive

income is reclassified to the income statement immediately and

recognised in trading income from balance sheet management

and other trading activities.

For qualifying cash flow hedges in respect of financial assets

and liabilities, the change in fair value of the hedging

instrument, which represents an effective hedge, is initially

recognised in other comprehensive income and is reclassified

to the income statement in the same period during which the

relevant financial asset or liability affects the income statement.

Any ineffective portion of the hedge is immediately recognised

in the income statement.

For qualifying hedges of a net investment in a foreign operation,

including a hedge of a monetary item that is accounted for as

part of the net investment, changes in the fair value of the

hedging instrument relating to the effective portion of the

hedge are recognised in other comprehensive income while any

gains or losses relating to the ineffective portion are recognised

in the income statement. On disposal of the foreign operation,

the cumulative value of any such gain or loss recorded in other

comprehensive income is reclassified to the income statement.

Hedge accounting is discontinued when it is determined that

the instrument ceases to be highly effective as a hedge; when

the derivative expires, or is sold, terminated or exercised; when

the hedged item matures or is sold or repaid; when a forecasted

transaction is no longer deemed highly probable or when the

designation as a hedge is revoked.

Sources of hedge ineffectiveness may arise from basis risk,

including but not limited to the discount rates used for calculating

the fair value of derivatives, hedges using instruments with a non-

fair value, and notional and timing differences between the

hedged items and hedging instruments.

Offsetting of financial assets and liabilities

Financial assets and liabilities are offset when there is both an

intention to settle on a net basis (or simultaneously) and a

currently enforceable legal right to offset exists.

Issued debt and equity financial instruments

Financial instruments issued by the Group are classified as

liabilities if they contain a contractual obligation to deliver cash

or another financial asset.

Financial instruments issued by the Group are classified as

equity where they confer on the holder a residual interest in the

Group, and the Group has no obligation to deliver either cash or

another financial asset to the holder. The components of

compound issued financial instruments are accounted for

separately with the liability component separated first and any

residual amount being allocated to the equity component.

Equity instruments issued by subsidiaries of Investec plc are

recorded as non-controlling interests on the balance sheet.

Equity instruments are initially measured net of directly

attributable issue costs.

Treasury shares represent Investec plc shares repurchased by

the Group which have not been cancelled. Treasury shares are

deducted from shareholders’ equity and represent the purchase

consideration, including directly attributable costs. Where

treasury shares are subsequently sold or reissued, net proceeds

received are included in shareholders’ equity.

Dividends on ordinary shares are recognised as a deduction

from equity at the earlier of payment date or the date that it is

approved by Investec plc shareholders.

Sale and repurchase agreements

(including securities borrowing and

lending)

Securities sold subject to a commitment to repurchase, at a

fixed price or a selling price plus a lender’s return, remain

on-balance sheet. Proceeds received are recorded as a liability

on the balance sheet under ‘repurchase agreements and cash

collateral on securities lent’. Securities that are purchased under

a commitment to resell the securities at a future date are not

recognised on the balance sheet. The consideration paid is

recognised as an asset under ‘reverse repurchase agreements

and cash collateral on securities borrowed’.

Where sovereign debt securities have been purchased at the

same time as derivatives with the same counterparty, such that

the combined position has the economic substance similar to

secured lending, an asset is recognised under ‘reverse repurchase

agreements and cash collateral on securities borrowed’.

The difference between the sale and repurchase prices is

treated as interest expense and is accrued over the life of the

agreement using the effective interest method.

Securities borrowing transactions that are not cash collateralised

are not included on the balance sheet. Securities lending and

borrowing transactions which are cash collateralised are

accounted for in the same manner as securities sold or purchased

subject to repurchase commitments.

Financial guarantees

Financial guarantee contracts issued by the Group are those

contracts that require a payment to be made to reimburse the

holder for a loss it incurs because the specified debtor fails to

make a payment when due, in accordance with the terms of a

debt instrument. Financial guarantees, which are not classified

as insurance contracts, are initially recognised at fair value,

adjusted for the transaction costs that are directly attributable

to the issuance of the guarantee.

Subsequent to initial recognition, the liability under each

guarantee is measured at the higher of the amount recognised

less cumulative amount of income recognised in accordance

with IFRS 15 and the best estimate of expected credit loss

calculated for the financial guarantee. Subsequent to initial

measurement, all changes in the balance sheet carrying value

are recognised in the income statement.

Property and equipment

Property and equipment are recorded at cost less accumulated

depreciation and impairments.

Cost is the cash equivalent paid or the fair value of the

consideration given to acquire an asset and includes other

expenditures that are directly attributable to the acquisition of

the asset.

Depreciation is provided on the depreciable amount of each

component on a straight-line basis over the expected useful life

of the asset.

The depreciable amount related to each asset is determined as

the difference between the cost and the residual value of the

asset. The residual value is the estimated amount, net of disposal



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costs that the Group would currently obtain from the disposal of

an asset in similar age and condition as expected at the end of its

useful life. The current and comparative annual depreciation rates

for each class of property and equipment are as follows:

• Computer and related equipment20% to 33%

• Motor vehicles20% to 25%

• Furniture and fittings10% to 20%

• Freehold buildings 2%

• Right-of-use assets*

• Leasehold property and improvements*

*Leasehold improvements depreciation rates are determined by reference to

the appropriate useful life of its separate components, limited to the period of

the lease. Leasehold property and right-of-use asset depreciation rates are

determined by reference to the period of the lease.

Routine maintenance and service costs for Group assets are

expensed as incurred. Subsequent expenditure is only

capitalised if it is probable that future economic benefits

associated with the item will flow to the Group.

Leases

At inception of a contract the Group assesses whether a contract

is, or contains, a lease. A contract is, or contains, a lease if the

contract conveys the right to control the use of an identified asset

for a period of time in exchange for consideration. To assess

whether a contract conveys the right to control the use of an

identified asset, the Group assesses whether:

• The Group has the right to obtain substantially all of the

economic benefits from use of the asset throughout the period

of use, and

• The Group has the right to direct the use of the asset.

As a lessee, the Group recognises a right-of-use (ROU) asset and

a lease liability at the lease commencement date.

The lease liability is initially measured at the present value of the

lease payments that are not paid at the commencement date,

discounted at the rate implicit in the lease, or, where that is not

available, at the Group’s incremental borrowing rate.

The lease liability will increase for the accrual of interest, and will

result in a constant rate of return throughout the life of the lease,

and reduce when payments are made.

The ROU asset is initially measured at cost, which comprises

the initial amount of the lease liability adjusted for any lease

payments made at or before the commencement date, plus any

indirect costs incurred and an estimate of costs to dismantle

and remove the underlying asset or to restore the underlying

asset or the site on which it is located, less any lease incentives

received.

The ROU asset is subsequently depreciated using the straight-

line method from the commencement date to the end of the

lease term. In addition, the ROU asset is periodically reduced by

impairment losses, if any, and adjusted for certain re-

measurements of the lease liability.

The lease liability is subsequently remeasured when there is a

change in future lease payments arising from a change in index

or rate, if there is a change in the Group’s estimate of the

amount expected to be payable under a residual value

guarantee, or if the Group changes its assessment of whether it

will exercise a purchase, extension or termination option.

Where the lease liability is remeasured, a corresponding

adjustment is made to the carrying amount of the ROU asset, or

is recorded in the income statement if the carrying amount of

the ROU asset has been reduced to zero.

The Group has elected not to recognise ROU assets and lease

liabilities for low value assets and short-term leases that have a

lease term of 12 months or less. The Group recognises the lease

payments associated with these leases as an expense on a

straight-line basis over the lease term.

When the Group is the lessor, the lease must be classified as

either a finance lease or an operating lease. A finance lease is a

lease which confers substantially all the risks and rewards of

the leased assets on the lessee. An operating lease is a lease

where substantially all of the risks and rewards of the leased

asset remain with the lessor.

When the lease is deemed a finance lease, the leased asset

is not held on the balance sheet; instead a finance lease

receivable is recognised representing the minimum lease

payments receivable under the terms of the lease, discounted

at the rate of interest implicit in the lease.

When the lease is deemed an operating lease, the lease income

is recognised on a straight-line basis over the period of the

lease unless another systematic basis is more appropriate.

For the balance sheet, the ROU assets are included within

property and equipment, finance lease receivables are included

within loans and advances to customers and other assets and

the lease liabilities are included within other liabilities.

Where the Group has a head lease and sublease arrangement

with external partners, the finance lease receivable is

recognised in other assets on the balance sheet.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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Trading properties

Trading properties are carried at the lower of cost and net

realisable value.

Software and intangible assets

Software and intangible assets are recorded at cost less

accumulated amortisation and impairments. Software and

intangible assets with a finite life are amortised over the useful

economic life on a straight-line basis. Amortisation of each

asset starts when it becomes available for use. The depreciable

amount related to each asset is determined as the difference

between the cost and the residual value of the asset.

The current and comparative annual amortisation rates for each

class of intangible assets are as follows:

• Client relationships12 to 20 years

• Acquired software3 to 7 years

• Internally generated software5 years

Impairment of non-financial assets

At each balance sheet date, the Group reviews the carrying

value of non-financial assets. The recoverable amount, being

the higher of fair value less cost of disposal and value-in-use, is

determined for any assets for which an indication of impairment

is identified. If the recoverable amount of an asset is less than

its carrying value, the carrying value of the asset is reduced to

its recoverable amount.

Impairment losses are recognised as an expense in the income

statement in the period in which they are identified. Reversals

of impairment losses are recognised in income in the period in

which the reversals are identified, to the extent that the

carrying value of the asset does not exceed the amount that

would have been calculated without impairment.

Trust and fiduciary activities

The Group acts as a trustee or in other fiduciary capacities that

result in the holding, placing or managing of assets for the

account of and at the risk of clients. As these are not assets of

the Group, they are not recognised on the balance sheet but

are included at market value as part of third party assets under

management.

Taxation and deferred taxation

Current taxation payable is provided for based on the amount

expected to be payable on taxable profit at rates that are

enacted or substantively enacted and applicable to the relevant

period.

Deferred taxation is provided on temporary differences

between the carrying amount of an asset or liability in the

balance sheet and its tax base, except where such temporary

differences arise from:

• The initial recognition of goodwill

• The initial recognition of an asset or liability in a transaction

which is not a business combination and at the time of the

transaction has no effect on the income statement or taxable

profit

• Temporary differences associated with the investments in

subsidiaries and interests in associated undertakings and

joint venture holdings, where the timing of the reversal of the

temporary differences can be controlled and it is probable

that the temporary differences will not reverse in the

foreseeable future.

Deferred taxation assets or liabilities are measured using the

taxation rates that have been enacted or substantively enacted

at the balance sheet date.

Deferred taxation assets are recognised to the extent that it is

probable that future taxable profit will be available against

which the deferred taxation assets can be utilised.

Items recognised directly in other comprehensive income are

net of related current and deferred taxation.

Borrowing costs

Borrowing costs that are directly attributable to property

developments which take a substantial period of time to

develop are capitalised to qualifying properties.

Provisions, contingent liabilities and

contingent assets

Provisions are recognised when the Group has a present legal

or constructive obligation as a result of a past event; it is

probable that an outflow of resources embodying economic

benefits will be required to settle the obligation and a reliable

estimate can be made of the amount of the obligation. The

expense relating to a provision is presented in the income

statement net of any reimbursement. Contingent assets and

contingent liabilities are not recognised on the balance sheet.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

Standards and interpretations issued but

not yet effective

The following significant standards and interpretations, which

have been issued but are not yet effective, are applicable to the

Group. These standards and interpretations have not been

applied in these annual financial statements. The Group intends

to comply with these standards from the effective dates.

IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 18 introduces new requirements on presentation within the

statement of profit or loss, including specified totals and

subtotals. It also requires disclosure of management-defined

performance measures and includes new requirements for

aggregation and disaggregation of financial information based

on the identified 'roles' of the primary financial statements (PFS)

and the notes. These new requirements are expected to impact

all reporting entities.

IFRS 18 and the consequential amendments to other standards

is effective for reporting periods beginning on or after

1 January 2027 and the Group is considering its impact.

Amendments to IFRS 9 Amendments to Classification and

Measurement of Financial Instruments and IFRS 7

disclosures

The amendments clarify that a financial liability is derecognised

on the 'settlement date' and introduce an accounting policy

choice to derecognise financial liabilities settled using an

electronic payment system before the settlement date.

The classification of financial assets with ESG linked features

has been clarified via additional guidance on the assessment of

contingent features.

Clarifications have been made on non-recourse loans and

contractually linked instruments.

Additional disclosures are introduced for financial instruments

with contingent features and equity instruments classified at fair

value through OCl. The amendments are effective for annual

periods starting on or after 1 January 2026 and the Group is

considering the impact.

All other standards and interpretations issued but not yet

effective are not expected to have a material impact on the

Group.

Key management assumptions

In preparation of the annual financial statements, the Group makes

estimations and applies judgement that could affect the reported

amount of assets and liabilities within the next financial year.

Key areas in which estimates are made include:

• In accordance with IFRS 13 Fair Value Measurement, the

Group categorises financial instruments carried on the

balance sheet at fair value using a three level hierarchy.

Financial instruments categorised as level 1 are valued using

quoted market prices and therefore there is minimal

judgement applied in determining fair value. However, the fair

value of financial instruments categorised as level 2 and, in

particular, level 3 are determined using valuation techniques

including discounted cash flow analysis, price-earnings

multiples, net asset value and complex valuation models. The

valuation techniques for level 3 financial instruments involve

management judgement and estimates, the extent of which,

depends on the complexity of the instrument, counterparty

and own credit risk, funding cost, low levels of market

liquidity, and the availability of market observable information.

In particular, significant uncertainty exists in the valuation of

unlisted investments and fair value loans in the private equity

and direct investments portfolios.The estimation of fair value

is subject to an uncertain economic outlook. Key valuation

inputs are based on the most relevant observable market

information and can include expected cash flows, yield

curves, discount rates, growth rates, earnings multiples and

the underlying assets and liabilities within a business,

adjusted where necessary for factors that specifically apply

to the individual investments, sector specific factors and

recognising market volatility and liquidity. Further details of

the Group’s level 3 financial instruments, valuation

techniques, key valuation inputs applied and the sensitivity of

the valuation including the effect of applying reasonably

possible alternative assumptions in determining their fair

value are set out in note 14.

Details of unlisted investments can be found in note 25 with

further analysis contained in the notes to risk and capital

management on page 186.

• In accordance with IFRS 10 Consolidated Financial

statements, the Group controls and consolidates an investee

where the Group has power over the entity’s relevant

activities, is exposed to variable returns from its involvement

with the investee and has the ability to affect the returns

through its power over the entity. Determining whether the

group controls another entity requires judgement by

identifying an entity’s relevant activities, being those activities

that significantly affect the investee’s returns, and whether

the Group controls those relevant activities by considering

the rights attached to both current and potential voting rights,

de facto control and other contractual rights including

whether such rights are substantive. Details of subsidiaries

can be found in note K of the Parent Company annual

financial statements.

• The determination of ECL against assets that are carried at

amortised cost and ECL relating to debt instruments at FVOCI

involves a high degree of uncertainty as it involves using

assumptions that are highly subjective and sensitive to risk

factors. The most significant judgements relate to defining

what is considered to be a significant increase in credit risk;

determining the probability of default (PD), exposure at

default (EAD) and loss given default (LGD) and future cash

flows; incorporating information about forecast economic

conditions and the weightings to be applied to economic

scenarios. More detail relating to the methodology,



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ACCOUNTING POLICIES CONTINUED

judgements and estimates and results of the Group’s

assessment of ECLs can be found on pages 181 to 183.

• The measurement of ECL has reliance on expert credit

judgement. Key judgmental areas are highlighted below and

are subject to robust governance processes. Key drivers of

measurement uncertainty include:

– The assessment of staging due to a significant increase in

credit risk

– Adequacy of post model adjustments;

– Assessment of ECL on Stage 3 exposures, including the

valuation of collateral, expected timing of cash flows, client

industry considerations and recovery strategies

– The determination of write-off points

– A range of forward-looking probability weighted macro-

economic scenarios

– Estimations of probabilities of default, loss given default

and exposures at default using models.

• In addition to these drivers, some initial judgements and

assumptions were required in the design and build of the

Group’s ECL methodology, which are not considered to have

a material impact. These include the use of income

recognition effective interest rates (EIRs), in accordance with

accounting standards, as the discount factor in the ECL

calculation as well as the use of contractual maturity to

assess behavioural lives. In addition, where we have

experienced limitations on the availability of probability of

default origination data for the historic book, a portfolio

average has been used in some instances.

Following a detailed review of the outcome of the ECL

models, management continue to hold an additional overlay

provision in the UK of £3.7 million (31 March 2023: £4.9

million). Detail of the approach followed and management's

assumptions are set out on page 181 of section 3.

• The Group’s income tax charge and balance sheet provision

are judgemental in nature. This arises from certain transactions

for which the ultimate tax treatment can only be determined by

final resolution with the relevant local tax authorities. The

Group has recognised in its current tax provision certain

amounts in respect of taxation that involve a degree of

estimation and uncertainty where the tax treatment cannot

finally be determined until a resolution has been reached by

the relevant tax authority and whether the proposed tax

treatment will be accepted by the authorities. The carrying

amount of this provision is sensitive to the resolution of issues,

which is often dependent on the timetable and progress of

discussion and negotiations with the relevant tax authorities,

arbitration process and legal proceedings in the relevant tax

jurisdictions in which the Group operates. Issues can take

many years to resolve and assumptions on the likely outcome

would therefore have to be made by the Group in order to

determine if an exposure should be measured based on the

most likely amount or expected value. In making any estimates,

management’s judgement has been based on various factors,

including:

• The current status of tax audits and enquiries;

• The current status of discussions and negotiations with the

relevant tax authorities;

• The results of any previous claims; and

• Any changes to the relevant tax environments.

• The Group operates in a legal and regulatory environment

that exposes it to litigation risks. As a result, the Group is

involved in disputes and legal proceedings which arise in the

ordinary course of business. The Group evaluates all facts,

the probability of the outcome of legal proceedings,

commercial outcomes and advice from internal and external

legal counsel when considering the accounting implications

as set out in note 49.

• The Group makes use of reasonable and supportable

information to make accounting judgements and estimates

related to climate change. This includes information about the

observable impact of climate change on the current credit

risk of clients and the valuation of assets. Many of the effects

arising from climate change will be longer term in nature, with

an inherent level of uncertainty and have limited effect on

accounting judgements and estimates for the current period.

The following items represent the most significant effects that

climate change can have on the shorter term:

– The measurement of ECL considers the ability of borrowers

to make contractual payments as and when they become

due. Investec performed an assessment of specific sectors

that could be most impacted by climate risk in all jurisdictions,

specifically focusing on the ability of the clients in these

sectors to meet their financing needs. The assessment

further included a review of Investec’s appetite to fund clients

in the respective sectors. While these have not resulted in

material impact to ECL, the determination of the impact of

these risks into PD, LGD and other inputs into the ECL

calculation is ongoing.

– The assessment of asset impairment, based on value in

use, and the ability to recognise deferred tax assets are

based on future expected cash flows. The expected cash

flows are based on management’s best estimate of the

operational results, including the near-term impact of climate

risk. The Group did not consider any additional adjustments

to the cash flows to account for this risk given the time frame

of the cash flows that were considered – The use of market

indicators as inputs to fair value is assumed to include current

information and knowledge regarding the effect of climate

risk.

Key areas in which judgement is applied include:

• On the basis of current financial projections and having made

appropriate enquiries, the directors have a reasonable

expectation that the Group has adequate resources to

continue in operational existence up to 24 June 2025, which

is a period greater than twelve months from the date of issue

of the financial statements that aligns with internal budgeting

processes. Accordingly, the going concern basis is adopted in

the preparation of the financial statements.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

ACCOUNTING POLICIES CONTINUED

1 . Segmental business analysis – income statement


		Specialist Banking
	Private Client		Corporate, Investment Banking and Other	Group Investments	Group Costs
For the year to 31 March 2024	Wealth & Investment	Private Banking				Total Group
£’000	Wealth & Investment	Private Banking				Total Group
Net interest income	8 340	132 302	670 285	—	—	810 927
Fee and commission income	9 170	874	163 169	—	—	173 213
Fee and commission expense	(992)	(41)	(15 418)	—	—	(16 451)
Investment income	2	1 138	1 461	11 721	—	14 322
Share of post-taxation profit of associates and joint venture holdings	31 013	—	24 780	—	—	55 793
Trading income/(loss) arising from
– customer flow	2 099	4 869	96 190	—	—	103 158
– balance sheet management and other trading activities	(662)	(99)	27 860	—	—	27 099
Other operating income	—	—	2 150	—	—	2 150
Operating income	48 970	139 043	970 477	11 721	—	1 170 211
Expected credit loss impairment charges	4	(13 557)	(72 442)	—	—	(85 995)
Operating income after expected credit loss impairment charges	48 974	125 486	898 035	11 721	—	1 084 216
Operating costs	(14 178)	(57 090)	(558 981)	—	(26 350)	(656 599)
Operating profit/(loss) before goodwill, acquired intangibles and strategic actions from continuing operations	34 796	68 396	339 054	11 721	(26 350)	427 617
Profit attributable to non-controlling interests	—	—	(1 204)	—	—	(1 204)
Adjusted operating profit/(loss) from continuing operations	34 796	68 396	337 850	11 721	(26 350)	426 413
Operating profit before acquired intangibles and strategic actions from discontinued operations						47 828
Operating profit before goodwill, acquired intangibles, strategic actions and after non-controlling interests						474 241
Selected returns and key statistics
Cost to income ratio	29.0%	41.1%	57.7%	n/a	n/a	56.2%
Total assets (£’mn)	1 028	5 327	23 547	159	n/a	30 061



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS

1 . Segmental business analysis – income statement (continued)


		Specialist Banking
	Private Client			Group Investments	Group Costs
For the year to 31 March 2023 ^	Wealth & Investment	Private Banking	Corporate, Investment Banking and Other			Total Group
£’000	Wealth & Investment	Private Banking	Corporate, Investment Banking and Other			Total Group
Net interest income	5 382	128 945	579 893	—	—	714 220
Fee and commission income	8 284	2 120	121 391	—	—	131 795
Fee and commission expense	(691)	(174)	(14 577)	—	—	(15 442)
Investment income	7	141	4 865	13 210	—	18 223
Share of post-taxation profit of associates and joint venture holdings	—	—	4 950	—	—	4 950
Trading income/(loss) arising from
– customer flow	1 252	4 449	81 665	—	—	87 366
– balance sheet management and other trading activities	10	13	13 111	—	—	13 134
Other operating income	—	—	6 879	—	—	6 879
Operating income	14 244	135 494	798 177	13 210	—	961 125
Expected credit loss impairment charges	2	(6 344)	(60 410)	—	—	(66 752)
Operating income after expected credit loss impairment charges	14 246	129 150	737 767	13 210	—	894 373
Operating costs	(14 286)	(58 996)	(504 576)	—	(21 108)	(598 966)
Operating profit/(loss) before goodwill and strategic actions from continuing operations	(40)	70 154	233 191	13 210	(21 108)	295 407
Profit attributable to non-controlling interests	—	—	—	—	—	—
Adjusted operating profit/(loss) from continuing operations	(40)	70 154	233 191	13 210	(21 108)	295 407
Operating profit before acquired intangibles and strategic actions from discontinued operations						91 767
Operating profit before goodwill, acquired intangibles, strategic actions and after non-controlling interests						387 174
Selected returns and key statistics
Cost to income ratio	100.3%	43.5%	63.2%	n/a	n/a	62.3%
Total assets (£’mn)	1 061	5 202	21 951	172	n/a	28 386

^Restated to reflect continuing operations and reversal of interest rate swaps gross-up as detailed in note 58.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

2 . Net interest income

This note analyses net interest income from the Group's continuing operations.


		2024			2023^
For the year to 31 March	Notes	Average balance sheet value	Interest income	Average yield	Average balance sheet value	Interest income	Average yield
£’000	Notes	Average balance sheet value	Interest income	Average yield	Average balance sheet value	Interest income	Average yield
Cash, near cash and bank debt and sovereign debt securities	1	8 872 354	427 558	4.82%	9 148 676	210 026	2.30%
Loans and advances	2	16 247 191	1 304 525	8.03%	15 268 383	915 987	6.00%
Private client		5 295 948	272 640	5.15%	5 085 272	214 368	4.22%
Corporate, institutional and other clients		10 951 243	1 031 885	9.42%	10 183 111	701 619	6.89%
Other debt securities and other loans and advances		891 414	66 290	7.44%	731 317	38 862	5.31%
Other#	3	190 123	116 100	n/a	225 900	50 370	n/a
Total interest-earning assets		26 201 082	1 914 473	7.31%	25 374 276	1 215 245	4.79%


		2024			2023^
For the year to 31 March	Notes	Average balance sheet value	Interest expense	Average yield	Average balance sheet value	Interest expense	Average yield
£’000	Notes	Average balance sheet value	Interest expense	Average yield	Average balance sheet value	Interest expense	Average yield
Deposits by banks and other debt-related securities	4	3 702 896	74 690	2.02%	3 788 578	50 675	1.34%
Customer accounts (deposits)		19 743 560	886 358	4.49%	19 010 904	383 198	2.02%
Subordinated liabilities		692 448	51 961	7.50%	737 888	33 615	4.56%
Other#	5	259 387	90 537	n/a	309 623	33 537	n/a
Total interest-bearing liabilities		24 398 291	1 103 546	4.52%	23 846 993	501 025	2.10%
Net interest income			810 927			714 220
Net interest margin			3.10%			2.81%

Notes:

1Comprises (as per the balance sheet) cash and balances at central banks; loans and advances to banks; reverse repurchase agreements and cash collateral on

securities borrowed; sovereign debt securities; and bank debt securities.

2Comprises (as per the balance sheet) loans and advances to customers.

3Comprises (as per the balance sheet) lease receivables (housed in other assets on the balance sheet) as well as interest income from derivative financial instruments

and off-balance sheet assets where there is no associated balance sheet value.

4Comprises (as per the balance sheet) deposits by banks; debt securities in issue; repurchase agreements and cash collateral on securities lent.

5Comprises (as per the balance sheet) liabilities arising from lease liabilities (housed in other liabilities on the balance sheet) as well as interest expense from derivative

financial instruments where there is no associated balance sheet value.

#Includes interest income and interest expense on derivative assets and liabilities used for hedging purposes. This results in interest income and interest expense being

recognised with no associated balance sheet value.

^Restated to reflect continuing operations and reversal of interest rate swaps gross-up as detailed in note 58.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

3 . Net fee and commission income

This note analyses net fee and commission income from the Group's continuing operations.


For the year to 31 March	2024	2023^
£’000	2024	2023^
Wealth & Investment businesses net fee and commission income	8 178	7 593
Fund management fees/fees for assets under management	6 862	6 688
Private client transactional fees	2 308	1 596
Fee and commission expense	(992)	(691)
Specialist Banking net fee and commission income	148 584	108 760
Specialist Banking fee and commission income	164 043	123 511
Specialist Banking fee and commission expense	(15 459)	(14 751)
Net fee and commission income	156 762	116 353
Fee and commission income	173 213	131 795
Fee and commission expense	(16 451)	(15 442)
Net fee and commission income	156 762	116 353
Annuity fees (net of fees payable)	18 238	22 396
Deal fees	138 524	93 957

*Wealth & Investment businesses relates to Investec Bank (Switzerland) AG.

^Restated to reflect continuing operations as detailed in note 58.

4. Investment income


For the year to 31 March	2024	2023
£’000	2024	2023
Realised	28 655	13 159
Unrealised*	(27 516)	(15 557)
Dividend income	13 183	19 756
Funding and other net related income	—	865
	14 322	18 223


For the year to 31 March	Listed equities	Unlisted equities	Warrants and profit shares	Total investment portfolio	Debt securities (sovereign, bank and other)	Investment and trading properties	Other asset categories	Total
£’000	Listed equities	Unlisted equities	Warrants and profit shares	Total investment portfolio	Debt securities (sovereign, bank and other)	Investment and trading properties	Other asset categories	Total
2024
Realised	(2 742)	38 647	287	36 192	831	—	(8 368)	28 655
Unrealised*	2 798	(30 381)	450	(27 133)	(253)	(12 500)	12 370	(27 516)
Dividend income	11 722	1 261	—	12 983	—	—	200	13 183
Funding and other net related income	—	—	—	—	—	—	—	—
	11 778	9 527	737	22 042	578	(12 500)	4 202	14 322
2023
Realised	(994)	53 495	1 062	53 563	(528)	(1 118)	(38 758)	13 159
Unrealised*	1 147	(51 323)	(1 281)	(51 457)	(5 649)	(2 325)	43 874	(15 557)
Dividend income	13 210	6 313	—	19 523	—	—	233	19 756
Funding and other net related income	—	—	—	—	—	865	—	865
	13 363	8 485	(219)	21 629	(6 177)	(2 578)	5 349	18 223

*In a year of realisation, any prior period mark-to-market gains/(losses) recognised are reversed in the unrealised line item and recognised in the realised line item .



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

5. Other operating income


For the year to 31 March	2024	2023
£’000	2024	2023
Unrealised (losses)/gains on other investments	(765)	(3 773)
Income from operating leases	1 554	4 468
Income from government grants*	1 361	6 184
	2 150	6 879

*Government grants income includes Research and Development Expenditure Credits and income from the Capability and Innovation Fund from the Banking

Competition Remedies Limited.

6 . Expected credit loss impairment charges


For the year to 31 March	2024	2023
£’000	2024	2023
Expected credit losses have arisen on the following items:
Loans and advances to customers	90 448	54 396
Other loans and advances	(64)	69
Other balance sheet assets	(160)	3 648
Undrawn commitments and guarantees	(4 229)	8 639
	85 995	66 752



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

7 . Operating costs

This note analyses operating costs from the Group's continuing operations.


For the year to 31 March	2024	2023^
£’000	2024	2023^

Staff compensation costs	436 100	422 566
Salaries and wages (including directors’ remuneration)**	352 067	340 344
Share-based payment expense	22 989	21 193
Social security costs	40 891	41 812
Pensions and provident fund contributions	20 153	19 217
Training and other costs	5 924	6 425
Staff costs	442 024	428 991
Premises expenses	29 373	26 603
Premises expenses (excluding depreciation and impairments)	14 500	12 558
Premises depreciation and impairments	14 873	14 045
Equipment expenses (excluding depreciation)	52 031	45 564
Business expenses*	120 050	84 772
Marketing expenses	9 995	9 210
Depreciation, amortisation and impairment on equipment, software and intangibles	3 126	3 826
	656 599	598 966

*Business expenses mainly comprise insurance costs, consulting and professional fees, travel expenses and subscriptions. Also, in the current year a provision relating

to motor vehicle financing.

**Details of the directors’ emoluments, pensions and their interests are disclosed in the Investec remuneration report 2024 .

^Restated to reflect continuing operations as detailed in note 58.

Segmental breakdown of operating costs


		Specialist Banking
	Private Client		Corporate, Investment Banking and Other	Group Costs
For the year to 31 March 2024	Wealth & Investment	Private Banking			Total Group
£’000	Wealth & Investment	Private Banking			Total Group
Staff costs	8 520	24 803	395 411	13 290	442 024
Premises expenses	512	1 418	26 630	813	29 373
Equipment expenses (excluding depreciation)	2 650	6 568	41 595	1 218	52 031
Business expenses	2 347	20 881	86 436	10 386	120 050
Marketing expenses	29	3 420	5 903	643	9 995
Depreciation, amortisation and impairment on equipment, software and intangibles	120	—	3 006	—	3 126
	14 178	57 090	558 981	26 350	656 599


		Specialist Banking
	Private Client		Corporate, Investment Banking and Other	Group Costs
For the year to 31 March 2023	Wealth & Investment	Private Banking			Total Group
£’000	Wealth & Investment	Private Banking			Total Group
Staff costs	9 379	26 973	383 309	9 330	428 991
Premises expenses	413	1 303	24 618	269	26 603
Equipment expenses (excluding depreciation)	2 218	9 090	33 829	427	45 564
Business expenses	1 941	17 173	54 759	10 899	84 772
Marketing expenses	16	4 457	4 554	183	9 210
Depreciation, amortisation and impairment on equipment, software and intangibles	319	—	3 507	—	3 826
	14 286	58 996	504 576	21 108	598 966



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

7. Operating costs (continued)

The following amounts were paid by the Group to the auditors in respect of the audit of the financial statements and for other

services provided to the Group:


For the year to 31 March	2024	2023
£’000	2024	2023
Ernst & Young fees^
Total audit fees	6 320	6 188
Audit of the Group’s accounts	468	438
Audit of the Group’s subsidiaries	5 852	5 750
Total non-audit fees	1 692	2 419
Audit related assurance services1	820	1 326
Other assurance services2	346	640
Services related to corporate finance transactions3	75	87
Other non-audit services	451	366
Total auditor’s remuneration	8 012	8 607

1.Audit related assurance fees consist of reviews of interim financial information and reporting accountant services.

2.Other assurance services relate to services required by law or regulation (including reporting on regulatory returns, agreed-upon-procedures relating to statutory and

regulatory filings and reporting to regulators on client assets).

3.Corporate finance transaction services relate to comfort letters on debt issuances.

^ In addition, audit fees of £1.8 million (2023: £1.6 million) and non audit fees of £300 000 (2023: £300 000) are borne by the Company and which relate to the Investec

DLC Group.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

8 . Share-based payments

The Group operates share option and long-term share incentive plans for employees, the majority of which are on an equity-settled

basis. The purpose of the staff share schemes is to promote an esprit de corps within the organisation, create an awareness of

Investec Group’s performance and provide an incentive to maximise individual business unit and Investec Group performance by

allowing all staff to share in the risks and rewards of the Investec Group.

Awards made under the UK share schemes are settled in Investec Plc shares (INVP).

These awards are contingent on the continued employment of employees up to the date of vesting.

The share incentive plans are granted in the following award types, each of which vest in line with the specified parameters.

Equity-settled awards granted under Investec share plans

Forfeitable share awards are shares held in the name of or for the benefit of an employee, for which the employee has dividend and

voting rights.

Conditional awards are the right to receive a share at a future date once the service conditions have been met. Employees do not

have a right to dividends or voting rights on these grants until vesting.

Nil-cost options are share options in respect of which no option price is payable and where the employee has no dividends or

voting rights.

Forfeitable and conditional awards and nil-cost options are awarded to employees for no consideration. These are settled by grants

from the Investec Group’s share scheme trusts, which acquire shares through purchase of shares on market.


For the year to 31 March	2024	2023^
£’000	2024	2023^
Share-based payment expense
Equity-settled	22 989	21 193

^Restated to reflect continuing operations as detailed in note 58.


For the year to 31 March	2024	2023
£’000	2024	2023
Weighted average fair value of awards granted in the year
UK schemes	19 600	25 576


	UK schemes
	2024		2023
Details of awards outstanding during the year	Number of share awards	Weighted average exercise price £	Number of share awards	Weighted average exercise price £
Outstanding at the beginning of the year	28 785 417	—	29 590 241	—
Deconsolidation of subsidiaries	(748 335)	—	—	—
Granted during the year	5 525 265	—	5 542 176	—
Exercised during the year^	(5 182 871)	—	(4 788 744)	0.01
Awards forfeited during the year	(658 715)	—	(1 558 256)	—
Outstanding at the end of the year	27 720 761	—	28 785 417	—
Exercisable at the end of the year	861 064	—	932 470	—

^The weighted average share price of options exercised during the year was £4.58 (2023: £4.57).

The weighted average share price during the year was £4.81 (2023: £4.59).



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

8. Share-based payments (continued)


Additional information relating to awards:	2024	2023
Options with strike prices
Exercise price range	n/a	n/a
Weighted average remaining contractual life	n/a	n/a
Long-term incentive grants with no strike price
Exercise price range	£nil	£nil
Weighted average remaining contractual life	1.69 years	1.99 years
Weighted average fair value of awards and long-term grants at measurement date	£3.55	£4.61
The fair values of awards granted were calculated using a Black-Scholes option pricing model and shares granted were calculated at market price. For awards granted during the year, the inputs into the model were as follows:
– Share price at date of grant	£4.25–£5.13	£4.70–£4.81
– Exercise price	£nil	£nil
– Expected volatility	n/a	n/a
– Award life	2.00–7.01 years	3.66–7.01 years
– Expected dividend yields	n/a	n/a
– Risk-free rate	n/a	n/a

Expected volatility was determined based on the implied volatility levels quoted by the derivatives trading desk. The expected

volatility is based on the respective share price movement over the last six months, but also includes an element of forward

expectation.

The expected attrition rates used were determined based on historical Group data with an adjustment to actual attrition on final

vesting.


	UK schemes
	2024		2023
Summary by share plan and award type	Number of share awards outstanding	Year of vesting	Number of share awards outstanding	Year of vesting
Investec 1 Limited Share Incentive Plan
– Conditional awards	70 571	3,4,5	137 473	3,4,5
– Forfeitable shares	11 446 438	3,4,5	15 598 193	3,4,5
– Nil-cost options	5 000	4,5	5 000	4,5
Investec plc Executive Incentive Plan 2013
– Executive conditional awards	6 436 810	1,2,3 & 3,4,5 & 3,4,5,6,7	7 531 227	1,2,3 & 3,4,5 & 3,4,5,6,7
– Nil-cost options	10 000	4,5	10 000	4,5
Investec plc Share Incentive Plan 2021
– Conditional awards	314 045	3,4,5	76 349	3,4,5
– Executive conditional awards	2 222 905	1,2,3 & 3,4,5 & 3,4,5,6,7	1 428 850	1,2,3 & 3,4,5 & 3,4,5,6,7
– Forfeitable shares	7 214 992	3,4,5	3 998 325	3,4,5
Outstanding at the end of the year	27 720 761		28 785 417



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

100

8. Share-based payments (continued)


	UK schemes
	2024		2023
Summary by share plan	Number of share awards outstanding	Maximum limit per individual	Number of share awards	Maximum limit per individual
Investec 1 Limited Share Incentive Plan	11 522 009	10 000 000	15 740 666	10 000 000
Investec plc Executive Incentive Plan 2013	6 446 810	2 500 000	7 541 227	2 500 000
Investec plc Share Incentive Plan 2021	9 751 942	15 000 000	5 503 524	15 000 000
Outstanding at the end of the year	27 720 761		28 785 417


Awards granted but not exercised by option vesting period	2024	2023
Year to 31 March 2023	—	932 470
Year to 31 March 2024	861 064	5 363 823
Year to 31 March 2025	7 643 931	7 642 215
Year to 31 March 2026	9 201 369	9 398 810
Year to 31 March 2027	5 226 958	3 846 730
Year to 31 March 2028	3 743 032	995 814
Year to 31 March 2029	625 093	444 531
Year to 31 March 2030	290 162	161 024
Year to 31 March 2031	129 152	—
Outstanding at the end of the year	27 720 761	28 785 417



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

101

9 . Long-term employment benefits

In March 2020, as part of the Investec Asset Management Limited (IAM) demerger, each participant of the Investec Group share

option and long-term share incentive plans received the right to receive one Ninety One plc share award for every two Investec plc

share awards they held. The Ninety One plc share awards were granted on the same terms and vesting period as the Investec plc

awards they related to.

Investec DLC has an obligation to deliver Ninety One plc shares to the holders of Investec plc share awards. Accordingly, this

obligation was classified and measured as an other long-term liability in terms of IAS 19 Employee Benefits (IAS 19). The initial

liability of £7 263 000 was calculated as the fair value of the liability at the date of demerger for the portion of the awards already

vested. The total value of the liability represented past service cost and as a result was accounted for in retained income. The

liability was subsequently measured at fair value through profit and loss.

In the prior year, on 30 May 2022, DLC’s 15% shareholding in Ninety One DLC was distributed to ordinary shareholders. Each

participant of the Investec share option and long-term share incentive plans for employees, received the right to receive 0.13751

Ninety One shares for each Investec share option they had.

In addition, management approved the acceleration of certain remaining Ninety One awards. Participants had 90 days to exercise

the acceleration. The acceleration excluded awards made to senior management.

IAS 19 long-term employment benefit liability fair value movement recognised in the income statement for the year ended

31 March 2024 was £0.6 million (31 March 2023: £1.9 million).


	2024		2023
Details of awards outstanding during the year	Number of Ninety One awards	Weighted average exercise price £	Number of Ninety One awards	Weighted average exercise price £
Outstanding at the beginning of the year	2 735 148	—	4 312 508	0.01
Sale of business	—	—	—	—
Grant linked to Ninety One Distribution	—	—	4 316 708	—
Granted during the year^	103 046	—	1 120	—
Exercised during the year	(1 201 482)	—	(5 706 136)	—
Lapsed during the year	(21 369)	—	(189 052)	0.17
Outstanding at the end of the year	1 615 343	—	2 735 148	—
Exercisable at the end of the year	421 724	—	1 054 811	—

^The Ninety One shares granted are due to the Investec Group reaching predetermined performance conditions. These awards are aligned with the uptick in Investec

shares in the ratio of 1 Ninety One share for every 2 Investec shares.

The exercise price range and weighted average remaining contractual life for market strike options and long-term awards

outstanding at 31 March 2024 were as follows:


Additional information relating to awards:	2024	2023
Options with strike price
Exercise price range	n/a	n/a
Weighted average remaining contractual life	n/a	n/a
Long-term awards with no strike price
Exercise price range	£nil	£nil
Weighted average remaining contractual life	1.19 years	1.51 years

For the liability calculated, the inputs into the model were as follows:


Additional information relating to awards:	2024	2023
The fair value of the liability was calculated by using the Black-Scholes option pricing model.
– Listed share price at 31 March	£1.71	£1.85
– Exercise price	£nil	£nil
– Expected volatility	30.96%–31.37%	37.7%
– Award life	0–4.42 years	0–5.41 years
– Expected dividend yields	0%–5.54%	0%–9.82%
– Risk-free rate	3.78%–5.07%	3.67%–4.45%



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

102

10 . Taxation

This note analyses taxation from the Group's continuing operations.


For the year to 31 March £’000	2024	2023^
Income statement taxation charge
Current taxation
UK
Current taxation on income for the year	84 102	68 298
Adjustments in respect of prior years	3 110	(7 359)
Corporation tax before double tax relief	87 212	60 939
Double tax relief	(566)	(335)
	86 646	60 604
Europe	7 383	5 478
Australia	333	438
Other*	1 337	638
	9 053	6 554
Total current taxation	95 699	67 158
Deferred taxation
UK	(9 689)	(7 632)
Europe	(199)	102
Australia	—	—
Other	(36)	(5)
Total deferred taxation	(9 924)	(7 535)
Total taxation charge for the year	85 775	59 623
Total taxation charge for the year comprises:
Taxation on operating profit before goodwill	86 502	59 623
Taxation on acquired intangibles, goodwill and disposal of subsidiaries	(727)	—
	85 775	59 623
Deferred taxation comprises:
Origination and reversal of temporary differences	(8 560)	(54)
Changes in taxation rates	(616)	(6 710)
Adjustment in respect of prior years	(748)	(771)
	(9 924)	(7 535)
The deferred taxation credit in the income statement arose from:
Deferred capital allowances	(3 125)	(11 303)
Income and expenditure accruals	25	(423)
Asset in respect of unexpired options	(6 349)	(2 258)
Unrealised fair value adjustment on financial instruments	(283)	220
Movement in deferred tax assets related to assessed losses	33	6 087
Liability/(asset) in respect of pension surplus	10	11
Deferred tax on acquired intangibles	(235)	—
Other temporary differences	—	131
	(9 924)	(7 535)
The deferred taxation charge in OCI/equity arose from:
Asset in respect of unexpired options	(6 433)	(612)
Unrealised fair value adjustment on financial instruments	14 119	5 229
	7 686	4 617

*Where Other largely includes India and North America.

^Restated to reflect continuing operations as detailed in note 58.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

103

10. Taxation (continued)


For the year to 31 March	2024	2023^
£’000	2024	2023^
The rates of corporation tax for the relevant years are:	%	%
UK	25	19
Europe (average)	10	10
Australia	30	30
Profit before taxation	403 638	293 720
Taxation on profit before taxation	85 775	59 623
Effective tax rate	21.3%	20.3%
The taxation charge on activities for the year is different from the standard rate as detailed below:
Taxation on profit on ordinary activities before taxation at UK rate of 25 % ( 2023 : 19%)	100 909	54 868
Taxation adjustments relating to foreign earnings	(17 282)	(3 409)
Taxation relating to prior years	2 362	(8 129)
Impairment of goodwill and non-operating items	(298)	1 199
Share options accounting expense/(income)	(212)	739
Non-taxable income	(4 885)	(1 956)
Net other permanent differences	268	(742)
Bank surcharge	6 910	17 068
Capital gains – non-taxable/covered by losses	417	1 361
Movement in unrecognised trading losses	(1 798)	5 335
Change in tax rate	(616)	(6 711)
Total taxation charge as per income statement	85 775	59 623
Other comprehensive income taxation effects
Gains on realisation of debt instruments at FVOCI recycled through the income statement	(982)	(314)
Pre-taxation	(1 131)	(431)
Taxation effect	149	117
Fair value movements on debt and equity instruments at FVOCI taken directly to other comprehensive income	(7 153)	(76 182)
Pre-taxation	(5 043)	(75 913)
Taxation effect	(2 110)	(269)
Cash flow hedges reserves	17 684	—
Pre-taxation	24 553	—
Taxation effect	(6 869)	—
Statement of changes in equity taxation effects
Additional Tier 1 capital	(20 634)	(16 880)
Pre-taxation	(20 634)	(16 880)
Taxation effect	—	—
Share-based payment adjustment	6 984	491
Pre-taxation	—	—
Taxation effect	6 984	491
IFRS 9 transitional adjustments	—	(7)
Pre-taxation	—	—
Taxation effect	—	(7)

^Restated to reflect continuing operations as detailed in note 58.

Global Minimum Tax

Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions the Group operates in. The legislation will be

effective for the Group’s financial year beginning 1 April 2024. The Group is in scope of the enacted or substantively enacted

legislation and has performed an assessment of the Group’s potential exposure to Pillar Two income taxes.

The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country

reporting and financial statements for the constituent entities in the Group. Based on the assessment, the Pillar Two effective tax

rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions

(Guernsey, Jersey and Isle of Man) where the transitional safe harbour relief does not apply and the Pillar Two effective tax rate is

below 15%. The Group does not expect a material exposure to Pillar Two income taxes in those jurisdictions. The Group has applied

a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax

when it is incurred.

We will continue to review the impact of the Pillar Two rules as further guidance is released by the OECD and additional

governments implement this tax regime.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

104

11 . Dividends


	2024		2023
For the year to 31 March £’000	Pence per share	Total	Pence per share	Total
Ordinary dividend
Final dividend for prior year	17.5	50 252	14.0	44 049
Interim dividend for current year	15.5	44 153	13.5	44 414
Total dividend attributable to ordinary shareholders	33.0	94 405	27.5	88 463

The directors have proposed a final dividend in respect of the financial year ended 31 March 2024 of 19.0 pence per ordinary share

( 31 March 2023: 17.5 pence).

This will be paid as follows:

• For Investec plc non-South African shareholders, through a dividend paid by Investec plc of 19.0 pence per ordinary share

• For Investec plc South African shareholders, through a dividend payment on the SA DAS share of 19.0 pence per ordinary share.

The final dividend to shareholders on the register at the close of business on 23 August 2024 is subject to the approval of the

members of Investec plc at the annual general meeting which is scheduled to take place on 8 August 2024 and, if approved,will

be paid on 6 September 2024.


	2024			2023
For the year to 31 March £’000	Pence per share	Cents per share	Total	Pence per share	Cents per share	Total
Perpetual preference dividend
Final dividend for prior year	21.59	490.94	623	21.58	490.94	200
Interim dividend for current year	29.09	552.50	832	11.44	329.08	340
Total dividend attributable to perpetual preference shareholders recognised in current financial year	50.68	1 043.44	1 455	33.02	820.02	540

The directors have declared a final dividend in respect of the financial year ended 31 March 2024 of 31.33562 pence (Investec plc

shares traded on the JSE Limited) and 31.33562 pence (Investec plc shares traded on the Channel Island Stock Exchange), and

559.65411 cents per Rand-denominated perpetual preference share. The final Sterling dividend will be payable on 28 June 2024

to shareholders on the register at the close of business on 14 June 2024. The final Rand dividend will be payable on 28 June 2024

to shareholders on the register at the close of business on 14 June 2024.


For the year to 31 March	2024	2023
£’000	2024	2023
Dividend attributable to Other Additional Tier 1 securities	20 642	16 880

The £250 000 000 Fixed Rate Reset Perpetual Additional Tier 1 Write Down Capital Securities (AT1 securities), issued

on 5 October 2017, pay a distribution rate of 6.75% per annum quarterly.

£141 892 000 of the AT1 securities were bought back on 1 March 2024.

On 28 February 2024, a new £350 000 000 issuance was made paying a distribution rate of 10.5% per annum semi-annually.

The dividend is shown gross of UK corporation tax.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

105

12 . Analysis of income and impairments by category of financial instrument

This note analyses income and impairments from the Group's continuing operations.


	At fair value through profit or loss
	IFRS 9 mandatory
For the year to 31 March	Trading**	Non-trading**	Designated at inception
£’000	Trading**	Non-trading**	Designated at inception
2024
Net interest income	8 477	81 632	—
Fee and commission income	13 685	1 054	—
Fee and commission expense	—	—	—
Investment income	(1 365)	16 365	(3 550)
Share of post-taxation profit of associates and joint venture holdings	—	—	—
Trading income/(loss) arising from
– customer flow	105 349	(736)	451
– balance sheet management and other trading activities	372	27 100	—
Other operating income	—	—	—
Total operating income/(expense) before expected credit loss	126 518	125 415	(3 099)
Expected credit loss impairments charges*	—	—	—
Operating income/(expense)	126 518	125 415	(3 099)


For the year to 31 March	Trading**	Non-trading**	Designated at inception
£’000	Trading**	Non-trading**	Designated at inception
2023^
Net interest income	19 858	70 562	—
Fee and commission income	15 457	1 054	—
Fee and commission expense	—	—	—
Investment income	(8 096)	18 575	(396)
Share of post-taxation profit of associates and joint venture holdings	—	—	—
Trading income/(loss) arising from
– customer flow	90 917	(1 573)	1 218
– balance sheet management and other trading activities	624	20 981	(6 116)
Other operating income	—	—	—
Total operating income/(expense) before expected credit loss	118 760	109 599	(5 294)
Expected credit loss impairments charges*	—	—	—
Operating income/(expense)	118 760	109 599	(5 294)

*Includes off-balance sheet items.

**Fair value through profit and loss income statement items have been split as trading and non-trading, as defined by regulatory rules for the trading book and banking

book requirements respectively. Trading consists of income and expenses from positions held for trading intent or to hedge elements of the trading book. Non-trading

consists of income and expenses from positions that are expected to be held to maturity.

^Restated to reflect continuing operations and reversal of interest rate swaps gross-up as detailed in note 58.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

106


At fair value through comprehensive income

Debt instruments with a dual business model	Equity instruments	Amortised cost	Non-financial instruments	Other fee income and expenses	Total
Debt instruments with a dual business model	Equity instruments	Amortised cost	Non-financial instruments	Other fee income and expenses	Total

175 370	—	545 910	(462)	—	810 927
—	—	69 720	—	88 754	173 213
—	—	(2 736)	—	(13 715)	(16 451)
1 131	11 721	700	(10 680)	—	14 322
—	—	—	55 793	—	55 793

—	—	(1 906)	—	—	103 158
—	—	(373)	—	—	27 099
—	—	1 553	—	597	2 150
176 501	11 721	612 868	44 651	75 636	1 170 211
—	—	(85 995)	—	—	(85 995)
176 501	11 721	526 873	44 651	75 636	1 084 216


Debt instruments with a dual business model	Equity instruments	Amortised cost	Non-financial instruments	Other fee income and expenses	Total
Debt instruments with a dual business model	Equity instruments	Amortised cost	Non-financial instruments	Other fee income and expenses	Total

83 370	—	539 675	755	—	714 220
—	—	68 381	—	46 903	131 795
—	—	(2 594)	—	(12 848)	(15 442)
1 001	13 210	484	(6 555)	—	18 223
—	—	—	4 950	—	4 950

—	—	(3 196)	—	—	87 366
—	—	(2 355)	—	—	13 134
—	—	4 468	—	2 411	6 879
84 371	13 210	604 863	(850)	36 466	961 125
—	—	(66 752)	—	—	(66 752)
84 371	13 210	538 111	(850)	36 466	894 373



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

107

13 . Analysis of financial assets and liabilities by category of financial instruments


	At fair value through profit or loss
	IFRS 9 mandatory
At 31 March 2024	Trading*	Non-trading*	Designated at initial recognition
£’000	Trading*	Non-trading*	Designated at initial recognition
Assets
Cash and balances at central banks	—	—	—
Loans and advances to banks	—	—	—
Reverse repurchase agreements and cash collateral on securities borrowed	—	164 319	—
Sovereign debt securities	—	—	—
Bank debt securities	—	—	—
Other debt securities	—	59 678	—
Derivative financial instruments	437 255	—	—
Securities arising from trading activities	145 200	1 433	10 699
Loans and advances to customers	—	641 197	—
Other loans and advances	—	—	—
Other securitised assets	—	—	66 702
Investment portfolio	—	246 521	—
Interests in associated undertakings and joint venture holdings	—	—	—
Current taxation assets	—	—	—
Deferred taxation assets	—	—	—
Other assets	4 732	5 153	—
Property and equipment	—	—	—
Goodwill	—	—	—
Software	—	—	—
Other acquired intangible assets	—	—
	587 187	1 118 301	77 401
Liabilities
Deposits by banks	—	—	—
Derivative financial instruments	472 662	—	—
Other trading liabilities	18 449	—	—
Repurchase agreements and cash collateral on securities lent	—	—	—
Customer accounts (deposits)	—	—	—
Debt securities in issue	—	—	9 823
Liabilities arising on securitisation of other assets	—	—	71 751
Current taxation liabilities	—	—	—
Other liabilities	—	—	—
	491 111	—	81 574
Subordinated liabilities	—	—	—
	491 111	—	81 574

*Fair value through profit and loss balance sheet positions have been split as trading and non-trading, as defined by regulatory rules for the trading book and banking

book requirements respectively. Trading consists of positions held for trading intent or to hedge elements of the trading book. Non-trading consists of positions that

are expected to be held to maturity.

For more information on hedges, please refer to note 51 on pages 150 to 152.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

108


At fair value through comprehensive income
Debt instrument with dual business model	Equity instruments	Total instruments at fair value	Amortised cost	Non-financial instruments or scoped out of IFRS 9	Total
Debt instrument with dual business model	Equity instruments	Total instruments at fair value	Amortised cost	Non-financial instruments or scoped out of IFRS 9	Total

—	—	—	5 661 623	—	5 661 623
—	—	—	676 464	—	676 464
—	—	164 319	975 796	—	1 140 115
993 289	—	993 289	934 845	—	1 928 134
247 263	—	247 263	49 992	—	297 255
8 552	—	68 230	640 055	—	708 285
—	—	437 255	—	—	437 255
—	—	157 332	—	—	157 332
1 471 371	—	2 112 568	14 457 745	—	16 570 313
—	—	—	117 514	—	117 514
—	—	66 702	—	—	66 702
—	158 889	405 410	—	—	405 410
—	—	—	—	857 247	857 247
—	—	—	—	31 200	31 200
—	—	—	—	119 730	119 730
—	—	9 885	417 758	312 478	740 121
—	—	—	—	72 947	72 947
—	—	—	—	68 669	68 669
—	—	—	—	4 571	4 571
—	—	—	—	—	—
2 720 475	158 889	4 662 253	23 931 792	1 466 842	30 060 887

—	—	—	2 174 305	—	2 174 305
—	—	472 662	—	—	472 662
—	—	18 449	—	—	18 449
—	—	—	85 091	—	85 091
—	—	—	20 790 611	—	20 790 611
—	—	9 823	1 263 283	—	1 273 106
—	—	71 751	—	—	71 751
—	—	—	—	8 672	8 672
—	—	—	594 305	431 508	1 025 813
—	—	572 685	24 907 595	440 180	25 920 460
—	—	—	668 810	—	668 810
—	—	572 685	25 576 405	440 180	26 589 270



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

109

13 . Analysis of financial assets and liabilities by category of financial instruments

(continued)


	At fair value through profit or loss
	IFRS 9 mandatory
At 31 March 2023	Trading*	Non-trading*	Designated at initial recognition
£’000	Trading*	Non-trading*	Designated at initial recognition
Assets
Cash and balances at central banks	—	—	—
Loans and advances to banks	—	—	—
Reverse repurchase agreements and cash collateral on securities borrowed	—	345 869	—
Sovereign debt securities	—	24 077	—
Bank debt securities	—	—	—
Other debt securities	—	93 992	—
Derivative financial instruments	634 123	—	—
Securities arising from trading activities	110 619	4 002	12 916
Loans and advances to customers	—	550 515	—
Other loans and advances	—	—	—
Other securitised assets	—	—	78 231
Investment portfolio	—	316 919	—
Interests in associated undertakings and joint venture holdings	—	—	—
Current taxation assets	—	—	—
Deferred taxation assets	—	—	—
Other assets	10 327	9 213	—
Property and equipment	—	—	—
Goodwill	—	—	—
Software	—	—	—
Other acquired intangible assets	—	—
	755 069	1 344 587	91 147
Liabilities
Deposits by banks	—	—	—
Derivative financial instruments	704 816	—	—
Other trading liabilities	28 184	—	—
Repurchase agreements and cash collateral on securities lent	—	—	—
Customer accounts (deposits)	—	—	—
Debt securities in issue	—	—	21 554
Liabilities arising on securitisation of other assets	—	—	81 609
Current taxation liabilities	—	—	—
Other liabilities	—	6 324	—
	733 000	6 324	103 163
Subordinated liabilities	—	—	—
	733 000	6 324	103 163

*Fair value through profit and loss balance sheet positions have been split as trading and non-trading, as defined by regulatory rules for the trading book and banking

book requirements respectively. Trading consists of positions held for trading intent or to hedge elements of the trading book. Non-trading consists of positions that

are expected to be held to maturity.

For more information on hedges, please refer to note 51 on pages 150 to 152.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

110


At fair value through comprehensive income
Debt instrument with dual business model	Equity instruments	Total instruments at fair value	Amortised cost	Non-financial instruments or scoped out of IFRS 9	Total
Debt instrument with dual business model	Equity instruments	Total instruments at fair value	Amortised cost	Non-financial instruments or scoped out of IFRS 9	Total

—	—	—	5 400 401	—	5 400 401
—	—	—	893 297	—	893 297
—	—	345 869	992 830	—	1 338 699
1 141 745	—	1 165 822	55 922	—	1 221 744
199 737	—	199 737	4 954	—	204 691
—	—	93 992	603 283	—	697 275
—	—	634 123	—	—	634 123
—	—	127 537	—	—	127 537
843 428	—	1 393 943	14 173 866	—	15 567 809
—	—	—	142 626	—	142 626
—	—	78 231	—	—	78 231
—	172 285	489 204	—	—	489 204
—	—	—	—	52 320	52 320
—	—	—	—	34 324	34 324
—	—	—	—	112 347	112 347
—	—	19 540	612 778	333 131	965 449
—	—	—	—	121 014	121 014
—	—	—	—	255 267	255 267
—	—	—	—	9 415	9 415
—	—	—	—	40 550	40 550
2 184 910	172 285	4 547 998	22 879 957	958 368	28 386 323

—	—	—	2 172 171	—	2 172 171
—	—	704 816	—	—	704 816
—	—	28 184	—	—	28 184
—	—	—	139 529	—	139 529
—	—	—	19 121 921	—	19 121 921
—	—	21 554	1 427 991	—	1 449 545
—	—	81 609	—	—	81 609
—	—	—	—	5 370	5 370
—	—	6 324	645 612	580 793	1 232 729
—	—	842 487	23 507 224	586 163	24 935 874
—	—	—	731 483	—	731 483
—	—	842 487	24 238 707	586 163	25 667 357



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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111

14 . Fair value hierarchy

The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value

measurements are categorised into different levels in the fair value hierarchy based on the inputs to the valuation technique used.

The different levels are identified as follows:

Level 1 – quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly

(i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).


		Fair value category
At 31 March 2024	Total instruments at fair value	Level 1	Level 2	Level 3
£’000	Total instruments at fair value	Level 1	Level 2	Level 3
Assets
Reverse repurchase agreements and cash collateral on securities borrowed	164 319	—	164 319	—
Sovereign debt securities	993 289	993 289	—	—
Bank debt securities	247 263	247 263	—	—
Other debt securities	68 230	8 552	65	59 613
Derivative financial instruments	437 255	—	384 245	53 010
Securities arising from trading activities	157 332	157 332	—	—
Loans and advances to customers*	2 112 568	—	70 418	2 042 150
Other securitised assets	66 702	—	—	66 702
Investment portfolio	405 410	159 681	754	244 975
Other assets	9 885	9 885	—	—
	4 662 253	1 576 002	619 801	2 466 450
Liabilities
Derivative financial instruments	472 662	—	408 321	64 341
Other trading liabilities	18 449	18 449	—	—
Debt securities in issue	9 823	—	9 823	—
Liabilities arising on securitisation of other assets	71 751	—	—	71 751
	572 685	18 449	418 144	136 092
Net assets at fair value	4 089 568	1 557 553	201 657	2 330 358

*Loans and advances to customers at fair value include instruments where the business model is either to sell the loan or where the business model is to hold to collect

the contractual cash flows but the loan has failed the SPPI test.

Transfers between level 1 and level 2

During the current and prior year there were no transfers between level 1 and level 2.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

112

14. Fair value hierarchy (continued)


		Fair value category
At 31 March 2023	Total instruments at fair value	Level 1	Level 2	Level 3
£’000	Total instruments at fair value	Level 1	Level 2	Level 3
Assets
Reverse repurchase agreements and cash collateral on securities borrowed	345 869	—	345 869	—
Sovereign debt securities	1 165 822	1 165 822	—	—
Bank debt securities	199 737	199 737	—	—
Other debt securities	93 992	—	60	93 932
Derivative financial instruments	634 123	—	580 939	53 184
Securities arising from trading activities	127 537	123 475	60	4 002
Loans and advances to customers*	1 393 943	—	90 297	1 303 646
Other securitised assets	78 231	—	—	78 231
Investment portfolio	489 204	173 952	884	314 368
Other assets	19 540	19 540	—	—
	4 547 998	1 682 526	1 018 109	1 847 363
Liabilities
Derivative financial instruments	704 816	—	645 358	59 458
Other trading liabilities	28 184	28 184	—	—
Debt securities in issue	21 554	—	21 554	—
Liabilities arising on securitisation of other assets	81 609	—	—	81 609
Other liabilities	6 324	—	—	6 324
	842 487	28 184	666 912	147 391
Net assets at fair value	3 705 511	1 654 342	351 197	1 699 972

*Loans and advances to customers at fair value include instruments where the business model is either to sell the loan or where the business model is to hold to collect

the contractual cash flows but the loan has failed the SPPI test.

Transfers between level 1 and level 2

During the current and prior year there were no transfers between level 1 and level 2.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

113

14. Fair value hierarchy (continued)

Level 3 instruments

The following table is a reconciliation of the opening balances to the closing balances for the fair value measurements in level 3 of

the fair value hierarchy:


For the year to	Investment portfolio	Loans and advances to customers	Other securitised assets	Other balance sheet assets 1
£’000	Investment portfolio	Loans and advances to customers	Other securitised assets	Other balance sheet assets 1	Total
Assets
Balance as at 1 April 2022	329 936	1 211 848	93 087	153 761	1 788 632
Total gains or (losses)	6 228	100 832	1 000	5 252	113 312
In the income statement	6 228	101 088	1 000	5 252	113 568
In the statement of comprehensive income	—	(256)	—	—	(256)
Purchases	23 416	1 692 584	—	26 056	1 742 056
Sales	(43 653)	(762 668)	—	(12 565)	(818 886)
Settlements	(13 648)	(981 996)	(15 856)	(31 148)	(1 042 648)
Transfers into level 3	6 304	—	—	4 746	11 050
Foreign exchange adjustments	5 785	43 046	—	5 016	53 847
Balance as at 31 March 2023	314 368	1 303 646	78 231	151 118	1 847 363
Total gains or (losses)	1 149	175 394	(1 495)	5 307	180 355
In the income statement	1 149	177 180	(1 495)	5 307	182 141
In the statement of comprehensive income	—	(1 786)	—	—	(1 786)
Purchases	31 704	2 551 558	—	39 709	2 622 971
Sales	(80 268)	(1 058 680)	—	(14 481)	(1 153 429)
Settlements	(18 352)	(898 422)	(10 034)	(74 870)	(1 001 678)
Foreign exchange adjustments	(3 626)	(31 346)	—	5 840	(29 132)
Balance as at 31 March 2024	244 975	2 042 150	66 702	112 623	2 466 450

1.Comprises of other debt securities, derivative financial instruments and securities arising from trading.

The Group transfers between levels within the fair value hierarchy when the observability of inputs change, or if the valuation

methods change. Transfers are deemed to occur at the end of each semi-annual reporting period.

For the year to 31 March 2024, there were no transfers into or from level 3. In the prior year, investment portfolio of £6.3 million and

derivative financial instruments assets of £4.7 million were transferred from level 2 to level 3, and derivative financial instruments

liabilities of £8 000 were transferred from level 3 to level 2. The valuation methodologies were reviewed and unobservable inputs

were used to determine the fair value.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

114

14. Fair value hierarchy (continued)


For the year to	Liabilities arising on securitisation of other assets	Other balance sheet liabilities 2	Total
£’000	Liabilities arising on securitisation of other assets	Other balance sheet liabilities 2	Total
Liabilities
Balance as at 1 April 2022	95 885	45 769	141 654
Total losses	1 384	11 770	13 154
In the income statement	1 384	11 770	13 154
Purchases	—	6 324	6 324
Settlements	(15 660)	—	(15 660)
Transfers out of level 3	—	(8)	(8)
Foreign exchange adjustments	—	1 927	1 927
Balance as at 31 March 2023	81 609	65 782	147 391
Total losses	1 190	6 183	7 373
In the income statement	1 190	6 183	7 373
Deconsolidation of subsidiaries	—	(3 933)	(3 933)
Settlements	(11 048)	(2 391)	(13 439)
Foreign exchange adjustments	—	(1 300)	(1 300)
Balance as at 31 March 2024	71 751	64 341	136 092

2.Comprises level 3 derivative financial instruments and other liabilities.

The following table quantifies the gains or (losses) included in the income statement and other comprehensive income recognised

on level 3 financial instruments:


For the year to 31 March	Total	Realised	Unrealised
£’000	Total	Realised	Unrealised
2024
Total gains or (losses) included in the income statement for the year
Net interest income	174 393	156 766	17 627
Investment income*	2 520	33 266	(30 746)
Trading income arising from customer flow	(2 145)	—	(2 145)
	174 768	190 032	(15 264)
Total gains or (losses) included in other comprehensive income for the year
Gains on realisation on debt instruments at FVOCI recycled through the income statement	534	534	—
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income	(1 786)	—	(1 786)
	(1 252)	534	(1 786)
2023
Total gains or (losses) included in the income statement for the year
Net interest income	98 169	86 175	11 994
Investment income*	2 085	2 502	(417)
Trading loss arising from customer flow	160	1	159
	100 414	88 678	11 736
Total gains or (losses) included in other comprehensive income for the year
Gains on realisation on debt instruments at FVOCI recycled through the income statement	433	433	—
Fair value movements on debt instruments at FVOCI taken directly to other comprehensive income	(256)	—	(256)
	177	433	(256)

*Included within the investment income statement balance are fair value losses of £5.1 million (31 March 2023: £nil) presented within operational items in the income

statement.



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115

14. Fair value hierarchy (continued)

Level 2 financial assets and financial liabilities

The following table sets out the Group’s principal valuation techniques as at 31 March 2024 used in determining the fair value

of its financial assets and financial liabilities that are classified within level 2 of the fair value hierarchy:


	VALUATION BASIS/TECHNIQUES		MAIN INPUTS
Assets

Reverse repurchase agreements and cash collateral on securities borrowed		Discounted cash flow model		Discount rates


Other debt securities		Discounted cash flow model		Discount rates, swap curves and negotiable certificate of deposit curves, external prices and broker quotes


Derivative financial instruments		Discounted cash flow model, Hermite interpolation and industry standard derivative pricing models including Black- Scholes and Local Volatility		Discount rate, risk-free rate, volatilities, forex forward points and spot rates, interest rate swap curves and credit curves


Securities arising from trading activities		Discounted cash flow model, Hermite interpolation and industry standard derivative pricing models including Local Volatility		Discount rate, risk-free rate, volatilities, forex forward points and spot rates, interest rate swap curves and credit curves


Investment portfolio		Discounted cash flow model and net asset value model		Discount rate and net assets


		Comparable quoted inputs		Discount rate and fund unit price


Loans and advances to customers		Discounted cash flow model		Yield curves

Liabilities

Derivative financial instruments		Discounted cash flow model, Hermite interpolation and industry standard derivative pricing models including Black- Scholes and Local Volatility		Discount rate, risk-free rate, volatilities, forex forward points and spot rates, interest rate swap curves and credit curves


Other trading liabilities		Discounted cash flow model, Hermite interpolation and industry standard derivative pricing models including Local Volatility		Discount rate, risk-free rate, volatilities, forex forward points and spot rates, interest rate swap curves and credit curves


Debt securities in issue		Discounted cash flow model, Hermite interpolation and industry standard derivative pricing models including Local Volatility		Discount rate, risk-free rate, volatilities, forex forward points and spot rates, interest rate swap curves and credit curves



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116

14. Fair value hierarchy (continued)

Sensitivity of fair values to reasonably possible alternative assumptions by level 3 instrument type

The fair value of financial instruments in level 3 are measured using valuation techniques that incorporate assumptions that are not

evidenced by prices from observable market data. The table below shows the sensitivity of these fair values to reasonably possible

alternative assumptions, determined at a transactional level:


At 31 March 2024	Balance sheet value £’000	Significant unobservable input	Range of unobservable input used	Favourable changes £’000	Unfavourable changes £’000
Assets
Other debt securities	59 613	Potential impact on income statement		2 192	(3 713)
		Credit spreads	0.75%–0.86%	40	(68)
		Cash flow adjustments	CPR 7.62%– 11.08%	214	(160)
		Other	^	1 938	(3 485)

Derivative financial instruments	53 010	Potential impact on income statement		5 329	(5 420)
		Volatilities	7.5%–19.1%	1	(3)
		Cash flow adjustments	CPR 7.62%– 11.08%	2	(2)
		Underlying asset value	^^	4 574	(4 619)
		Other	^	752	(796)

Investment portfolio	244 975	Potential impact on income statement		24 877	(48 953)
		Price earnings multiple	3.8x–9x	6 485	(13 200)
		Cash flow adjustments	10%	225	(449)
		Underlying asset value	^^	9 798	(18 625)
		Other	^	8 369	(16 679)

Loans and advances to customers	2 042 150	Potential impact on income statement		16 027	(35 018)
Loans and advances to customers		Credit spreads	0.16%–37.8%	10 840	(24 697)
		Price earnings multiple	3.8x	2 762	(6 893)
		Underlying asset value	^^	1 435	(1 631)
		Other	^	990	(1 797)

		Potential impact on other comprehensive income
		Credit spreads	0.14%–5.0%	12 783	(24 177)

Other securitised assets	66 702	Potential impact on income statement
		Cash flow adjustments	CPR 7.62%	770	(1 291)
Total level 3 assets	2 466 450			61 978	(118 572)
Liabilities
Derivative financial instruments	64 341	Potential impact on income statement		(5 552)	3 507
		Volatilities	9%–23.3%	(1)	2
		Underlying asset value	^^	(5 550)	3 505
		Other	^	(1)	—

Liabilities arising on securitisation of other assets*	71 751	Potential impact on income statement
Liabilities arising on securitisation of other assets*		Cash flow adjustments	CPR 7.62%	(805)	440

Total level 3 liabilities	136 092			(6 357)	3 947
Net level 3 assets	2 330 358

*The sensitivity of the fair value of liabilities arising on securitisation of other assets has been considered together with other securitised assets.

^Other – The valuation sensitivity has been assessed by adjusting various inputs such as expected cash flows and earnings multiples rather than a single input. It is

deemed appropriate to reflect the outcome on a portfolio basis for the purposes of this analysis as the sensitivity of the assets cannot be determined through the

adjustment of a single input.

^^Underlying asset values are calculated by reference to a tangible asset, for example, property, aircraft or shares.



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117

14. Fair value hierarchy (continued)


At 31 March 2023	Balance sheet value £’000	Significant unobservable input	Range of unobservable input used	Favourable changes £’000	Unfavourable changes £’000
Assets
Other debt securities	93 932	Potential impact on income statement		2 702	(5 253)
		Credit spreads	1.05%-1.87%	108	(254)
		Cash flow adjustments	CPR 14.81%	10	(10)
		Other	^	2 584	(4 989)

Derivative financial instruments	53 184	Potential impact on income statement		5 260	(5 136)
		Volatilities	7.5%-8.9%	13	(25)
		Cash flow adjustments	CPR 14.81%	6	(5)
		Underlying asset value	^^	3 999	(4 100)
		Other	^	1 242	(1 006)

Securities arising from trading activities	4 002	Potential impact on income statement
Securities arising from trading activities		Cash flow adjustments	CPR 14.17%	206	(235)

Investment portfolio	314 368	Potential impact on income statement		33 129	(66 354)
		Price earnings multiple	5.5x-11.2x	11 718	(21 695)
		Underlying asset value	^^	9 378	(20 883)
		Other	^	12 033	(23 776)

Loans and advances to customers	1 303 646	Potential impact on income statement		21 222	(40 572)
Loans and advances to customers		Credit spreads	0.28%-5.2%	10 994	(22 971)
		Price earnings multiple	3.5x-4x	4 276	(7 083)
		Underlying asset value	^^	1 564	(1 742)
		Other	^	4 388	(8 776)
		Potential impact on other comprehensive income		15 756	(31 758)
		Credit spreads	0.29%-5.5%	15 753	(31 751)
		Other	^	3	(7)

Other securitised assets	78 231	Potential impact on income statement
Other securitised assets		Cash flow adjustments	CPR 14.81%	701	(669)
Total level 3 assets	1 847 363			78 976	(149 977)
Liabilities
Derivative financial instruments	59 458	Potential impact on income statement		(4 098)	4 099
		Volatilities	9%-18.9%	(1)	2
		Underlying asset value	^^	(4 097)	4 097

Liabilities arising on securitisation of other assets*	81 609	Potential impact on income statement
Liabilities arising on securitisation of other assets*	81 609	Cash flow adjustments	CPR 14.81%	(351)	363

Other Liabilities	6 324	Potential impact on income statement
Other Liabilities	6 324	Other	^	(632)	632
Total level 3 liabilities	147 391			(5 081)	5 094
Net level 3 assets	1 699 972

*The sensitivity of the fair value of liabilities arising on securitisation of other assets has been considered together with other securitised assets.

^Other – The valuation sensitivity has been assessed by adjusting various inputs such as expected cash flows and earnings multiples rather than a single input. It is

deemed appropriate to reflect the outcome on a portfolio basis for the purposes of this analysis as the sensitivity of the assets cannot be determined through the

adjustment of a single input.

^^Underlying asset values are calculated by reference to a tangible asset, for example, property, aircraft or shares.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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118

14. Fair value hierarchy (continued)

In determining the value of level 3 financial instruments, the following are the principal inputs that can require judgement:

Credit spreads

Credit spreads reflect the additional yield that a market participant would demand for taking exposure to the credit risk of an

instrument. The credit spread for an instrument forms part of the yield used in a discounted cash flow calculation. In general,

a significant increase in a credit spread in isolation will result in a movement in fair value that is unfavourable for the holder

of a financial instrument. It is an unobservable input into a discounted cash flow valuation.

Discount rates

Discount rates are used to adjust for the time value of money when using a discounted cash flow valuation method. Where

relevant, the discount rate also accounts for illiquidity, market conditions and uncertainty of future cash flows.

Volatilities

Volatility is a key input in the valuation of derivative products containing optionality. Volatility is a measure of the variability or

uncertainty in returns for a given derivative underlying. It represents an estimate of how much a particular underlying instrument,

parameter or index will change in value over time.

Cash flows

Cash flows relate to the future cash flows that can be expected from the instrument and requires judgement. Cash flows are input

into a discounted cash flow valuation.

Price earnings multiple

The price-to-earnings ratio is an equity valuation multiple used in the adjustment of underlying market prices. It is a key driver in the

valuation of unlisted investments.

Underlying asset value

In instances where cash flows have links to referenced assets, the underlying asset value is used to determine the fair value.

The underlying asset valuation is derived using observable market prices sourced from broker quotes, specialist valuers or other

reliable pricing sources.



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15 . Fair value of financial instruments at amortised cost


					Level within the fair value hierarchy
At 31 March 2024	Carrying amount	Fair value approximates carrying amount	Balances where fair values do not approximate carrying amounts	Fair value of balances that do not approximate carrying amounts	Level 1	Level 2	Level 3
£’000	Carrying amount	Fair value approximates carrying amount			Level 1	Level 2	Level 3
Assets
Cash and balances at central banks	5 661 623	5 661 623	—	—	—	—	—
Loans and advances to banks	676 464	676 464	—	—	—	—	—
Reverse repurchase agreements and cash collateral on securities borrowed	975 796	904 973	70 823	70 775	—	70 775	—
Sovereign debt securities	934 845	4 253	930 592	930 937	930 937	—	—
Bank debt securities	49 992	—	49 992	50 432	50 432	—	—
Other debt securities	640 055	26 958	613 097	614 800	—	614 800	—
Loans and advances to customers	14 457 745	542 986	13 914 759	13 715 487	—	982 824	12 732 663
Other loans and advances	117 514	71 467	46 047	46 167	—	46 167	—
Other assets	417 758	417 758	—	—	—	—	—
	23 931 792	8 306 482	15 625 310	15 428 598
Liabilities
Deposits by banks	2 174 305	271 520	1 902 785	1 917 265	—	1 917 265	—
Repurchase agreements and cash collateral on securities lent	85 091	85 091	—	—	—	—	—
Customer accounts (deposits)	20 790 611	9 957 937	10 832 674	10 810 561	—	10 810 561	—
Debt securities in issue	1 263 283	1 194	1 262 089	1 261 504	975 292	286 212	—
Other liabilities	594 305	592 679	1 626	536	—	—	536
Subordinated liabilities	668 810	—	668 810	661 143	661 143	—	—
	25 576 405	10 908 421	14 667 984	14 651 009

For the year ended 31 March 2024 , there were insignificant disposals of financial instruments measured at amortised cost.

For financial assets and financial liabilities that are liquid or have a short-term maturity (less than three months) it is assumed that

the carrying amounts approximate their fair value. These assets and liabilities include demand deposits, savings accounts without

a specific maturity, which are included in customer accounts (deposits), and variable rate instruments.

Financial instruments for which fair value does not approximate carrying value

Differences in amortised cost and fair value occur in fixed rate instruments. The fair value of fixed rate financial assets and financial

liabilities carried at amortised cost are estimated by comparing spreads earned on the transactions with spreads earned on similar

new transactions entered into by the Group. The estimated fair value of fixed interest-bearing deposits is based on discounted

cash flows, using prevailing money market interest rates for debts with similar credit risk and maturity. For quoted subordinated

debt issued, the fair values are calculated based on quoted market prices. For those notes issued where quoted market prices are

not available, a discounted cash flow model is used based on a current interest rate yield curve appropriate for the remaining term

to maturity.



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120

15. Fair value of financial instruments at amortised cost (continued)


					Level within the fair value hierarchy
At 31 March 2023	Carrying amount	Fair value approximates carrying amount	Balances where fair values do not approximate carrying amounts	Fair value of balances that do not approximate carrying amounts	Level 1	Level 2	Level 3
£’000	Carrying amount	Fair value approximates carrying amount			Level 1	Level 2	Level 3
Assets
Cash and balances at central banks	5 400 401	5 400 401	—	—	—	—	—
Loans and advances to banks	893 297	893 297	—	—	—	—	—
Reverse repurchase agreements and cash collateral on securities borrowed	992 830	807 046	185 784	185 503	—	185 503	—
Sovereign debt securities	55 922	4 370	51 552	51 494	51 494	—	—
Bank debt securities	4 954	—	4 954	4 952	4 952	—	—
Other debt securities	603 283	42 611	560 672	554 892	—	554 892	—
Loans and advances to customers	14 173 866	611 611	13 562 255	13 426 192	—	1 016 299	12 409 893
Other loans and advances	142 626	69 727	72 899	72 976	—	72 976	—
Other assets	612 778	612 778	—	—	—	—	—
	22 879 957	8 441 841	14 438 116	14 296 009
Liabilities
Deposits by banks	2 172 171	373 944	1 798 227	1 804 116	—	1 804 116	—
Repurchase agreements and cash collateral on securities lent	139 529	85 070	54 459	52 486	—	52 486	—
Customer accounts (deposits)	19 121 921	10 426 685	8 695 236	8 654 686	—	8 654 686	—
Debt securities in issue	1 427 991	1 183	1 426 808	1 383 613	911 763	471 850	—
Other liabilities	645 612	642 983	2 629	1 572	—	—	1 572
Subordinated liabilities	731 483	—	731 483	713 119	713 119	—	—
	24 238 707	11 529 865	12 708 842	12 609 592

For the year ended 31 March 2023, there were insignificant disposals of financial instruments measured at amortised cost.



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121

15. Fair value of financial instruments at amortised cost (continued)

Fixed rate financial instruments

The fair value of fixed rate financial assets and financial liabilities carried at amortised cost are estimated by comparing spreads

earned on the transactions with spreads earned on similar new transactions entered into by the Group. The estimated fair value

of fixed interest-bearing deposits is based on discounted cash flows, using prevailing money market interest rates for debts

with similar credit risk and maturity.

For quoted subordinated debt issued, the fair values are calculated based on quoted market prices. For those notes issued where

quoted market prices are not available, a discounted cash flow model is used based on a current interest rate yield curve

appropriate for the remaining term to maturity.

Certain financial instruments that would normally be carried at fair value continue to be recognised at transaction price. This occurs

when the fair value would normally be determined using valuation techniques which cannot be relied on due to insufficient external

inputs. This results in gains or losses which have not been recognised on-balance sheet.

The following table sets out the Group’s principal level 2 and 3 valuation techniques used in determining the fair value of its

financial assets and financial liabilities:


Loans and advances to banks		Calculation of the present value of future cash flows, discounted as appropriate.
Other debt securities		Priced with reference to similar trades in an observable market.
Reverse repurchase agreements and cash collateral on securities borrowed		Calculation of the present value of future cash flows, discounted as appropriate.
Loans and advances to customers		Calculation of the present value of future cash flows, discounted as appropriate.
Other loans and advances		Calculation of the present value of future cash flows, discounted as appropriate.
Other assets		Calculation of the present value of future cash flows, discounted as appropriate.
Deposits by banks		Calculation of fair value using appropriate funding rates.
Repurchase agreements and cash collateral on securities lent		Calculation of the present value of future cash flows, discounted as appropriate.
Customer accounts (deposits)		Where the deposits are short-term in nature, carrying amounts are assumed to approximate fair value. Where deposits are of longer-term maturities, they are valued using a cash flow model discounted as appropriate.
Debt securities in issue		Where the debt securities are fully collateralised, fair value is equal to the carrying value. Other debt securities are valued using a cash flow model discounted as appropriate to the securities for funding and interest rates.
Other liabilities		Where the other liabilities are short term in nature, carrying amounts are assumed to approximate fair value.



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122

16 . Designated at fair value


		Fair value adjustment		Change in fair value attributable to credit risk *
At 31 March	Carrying value	Current	Cumulative	Current	Cumulative	Maximum exposure to credit risk
£’000	Carrying value	Current	Cumulative	Current	Cumulative	Maximum exposure to credit risk
Assets
2024
Securities arising from trading activities	10 699	529	1 753	(98)	(161)	10 699
Other securitised assets	66 702	(2 747)	(12 648)	(2 747)	(12 648)	66 702
	77 401	(2 218)	(10 895)	(2 845)	(12 809)	77 401
2023
Securities arising from trading activities	12 916	930	(638)	(120)	(57)	12 916
Other securitised assets	78 231	(2 352)	(7 459)	(2 352)	(7 459)	78 927
	91 147	(1 422)	(8 097)	(2 472)	(7 516)	91 843


			Fair value adjustment		Change in fair value attributable to credit risk *
At 31 March	Carrying value	Remaining contractual amount to be repaid at maturity	Current	Cumulative	Current	Cumulative
£’000	Carrying value	Remaining contractual amount to be repaid at maturity	Current	Cumulative	Current	Cumulative
Liabilities
2024
Debt securities in issue	9 823	9 969	79	2 217	(106)	(160)
Liabilities arising on securitisation of other assets	71 751	77 152	567	(4 350)	567	(4 350)
	81 574	87 121	646	(2 133)	461	(4 510)
2023
Debt securities in issue	21 554	20 097	(274)	5 146	(85)	(67)
Liabilities arising on securitisation of other assets	81 609	86 985	250	(5 441)	250	(5 441)
	103 163	107 082	(24)	(295)	165	(5 508)

*Changes in fair value due to credit risk are determined as the change in the fair value of the financial instrument that is not attributable to changes in other market

inputs.



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123

17 . Cash and balances at central banks


At 31 March	2024	2023
£’000	2024	2023
Gross cash and balances at central banks	5 661 623	5 400 401
Expected credit loss	—	—
Net cash and balances at central banks	5 661 623	5 400 401
The country risk of cash and bank balances at central banks lies in the following geographies:
United Kingdom	5 650 258	5 380 357
Europe (excluding UK)	11 365	20 044
	5 661 623	5 400 401

18 . Loans and advances to banks


At 31 March	2024	2023
£’000	2024	2023
Gross loans and advances to banks	676 487	893 368
Expected credit loss	(23)	(71)
Net loans and advances to banks	676 464	893 297
The country risk of loans and advances to banks lies in the following geographies:
South Africa	2 534	7 265
United Kingdom	309 774	511 777
Europe (excluding UK)	266 418	287 673
Australia	9 617	14 313
North America	77 740	62 609
Asia	10 108	8 446
Other	273	1 214
	676 464	893 297

19 . Reverse repurchase agreements and cash collateral on securities borrowed and

repurchase agreements and cash collateral on securities lent


At 31 March	2024	2023
£’000	2024	2023
Assets
Gross reverse repurchase agreements and cash collateral on securities borrowed	1 140 129	1 338 711
Expected credit loss	(14)	(12)
Net reverse repurchase agreements and cash collateral on securities borrowed	1 140 115	1 338 699
Reverse repurchase agreements	1 131 175	1 328 235
Cash collateral on securities borrowed	8 940	10 464
	1 140 115	1 338 699
As part of the reverse repurchase and securities borrowing agreements the Group has received securities that it is allowed to sell or repledge. £59 million ( 2023: £90 million) has been resold or repledged to third parties in connection with financing activities or to comply with commitments under short sale transactions.
Liabilities
Repurchase agreements	67 520	118 373
Cash collateral on securities lent	17 571	21 156
	85 091	139 529

The assets transferred and not derecognised in the above repurchase agreements are fair valued at £86 million ( 2023 : £61 million).

They are pledged as security for the term of the underlying repurchase agreement.



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124

20 . Sovereign debt securities


At 31 March	2024	2023
£’000	2024	2023
Gross sovereign debt securities	1 928 134	1 221 744
Expected credit loss	—	—
Net sovereign debt securities	1 928 134	1 221 744
The country risk of sovereign debt securities lies in the following geographies:
United Kingdom	1 108 907	348 827
Europe (excluding UK)*	136 269	190 232
North America	682 958	682 685
	1 928 134	1 221 744

*Where Europe (excluding UK) largely includes securities held in Germany and Switzerland.

21 . Bank debt securities


At 31 March	2024	2023
£’000	2024	2023
Gross bank debt securities	297 257	204 691
Expected credit loss	(2)	—
Net bank debt securities	297 255	204 691
Bonds	297 255	200 590
Floating rate notes	—	4 101
	297 255	204 691
The country risk of bank debt securities lies in the following geographies:
United Kingdom	188 179	122 690
Europe (excluding UK)	43 935	71 873
Australia	33 476	10 128
North America	31 665	—
	297 255	204 691

22 . Other debt securities


At 31 March	2024	2023
£’000	2024	2023
Gross other debt securities	708 689	697 837
Expected credit loss	(404)	(562)
Net other debt securities	708 285	697 275
Bonds	88 189	120 510
Asset-backed securities	620 096	576 765
	708 285	697 275
The country risk of other debt securities lies in the following geographies:
United Kingdom	73 161	108 175
Europe (excluding UK)	95 957	140 937
North America	515 335	400 496
Asia	23 832	47 667
	708 285	697 275



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125

23 . Derivative financial instruments

The Group enters into various contracts for derivatives, both as principal for trading purposes and as a customer for hedging

foreign exchange and interest rate exposures. These include financial futures, options, swaps and forward rate agreements.

The risks associated with derivative instruments are monitored in the same manner as for the underlying instruments. Risks are

also measured across the product range in order to take into account possible correlations.

In the tables that follow, notional principal amounts indicate the volume of business outstanding at the balance sheet date and

do not represent amounts at risk. The fair value of a derivative financial instrument represents the positive or negative cash flows

which would have occurred had the rights and obligations arising from that instrument been closed out by the Group in an orderly

market transaction at the balance sheet date.


	2024			2023
At 31 March	Notional principal amounts	Positive fair value	Negative fair value	Notional principal amounts	Positive fair value	Negative fair value
£’000	Notional principal amounts	Positive fair value	Negative fair value	Notional principal amounts	Positive fair value	Negative fair value
Foreign exchange derivatives
Forward foreign exchange contracts	17 274 128	121 509	76 185	15 680 009	186 867	142 523
Currency swaps	536 757	5 497	4 685	678 329	9 484	8 724
OTC options bought and sold	1 931 247	9 710	10 794	1 877 070	24 153	22 865
	19 742 132	136 716	91 664	18 235 408	220 504	174 112
Interest rate derivatives
Caps and floors	11 881 599	99 163	95 676	10 576 158	155 330	150 118
Swaps	40 087 486	43 321	126 493	46 254 022	28 842	160 283
OTC options bought and sold	31 723	—	505	—	—	—
OTC derivatives	52 000 808	142 484	222 674	56 830 180	184 172	310 401
Exchange traded futures	—	—	—	—	—	—
	52 000 808	142 484	222 674	56 830 180	184 172	310 401
Equity and stock index derivatives
OTC options bought and sold	711 169	39 170	69 483	1 604 247	63 258	120 243
Equity swaps and forwards	—	—	—	6 343	173	—
OTC derivatives	711 169	39 170	69 483	1 610 590	63 431	120 243
Exchange traded futures	109 117	—	—	225 212	—	—
Exchange traded options	4 319 032	53 073	79	11 453 984	55 231	45
	5 139 318	92 243	69 562	13 289 786	118 662	120 288
Commodity derivatives
OTC options bought and sold	347 969	42 504	63 436	251 899	39 853	59 145
Commodity swaps and forwards	497 975	17 071	23 424	721 125	45 219	38 152
	845 944	59 575	86 860	973 024	85 072	97 297
Exchange traded futures	171 727	—	—	—	—	—
	1 017 671	59 575	86 860	973 024	85 072	97 297
Credit derivatives	67 756	1 796	1 902	138 862	20 670	2 718
Other derivatives		4 441			5 043
Derivatives per balance sheet		437 255	472 662		634 123	704 816



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

126

24 . Securities arising from trading activities


At 31 March	2024	2023
£’000	2024	2023
Asset-backed securities	—	4 002
Bonds	12 050	24 106
Government securities	171	—
Listed equities	145 111	99 429
	157 332	127 537

25 . Investment portfolio


At 31 March	2024	2023
£’000	2024	2023
Listed equities	159 678	173 949
Unlisted equities*	245 732	315 255
	405 410	489 204

*Unlisted equities include loan instruments that are convertible into equity.

26 . Loans and advances to customers and other loans and advances


At 31 March	2024	2023
£’000	2024	2023
Gross loans and advances to customers at amortised cost	14 631 845	14 314 591
Gross loans and advances to customers at FVOCI ^	1 471 371	843 428
Suspended interest	5 066	4 822
Gross loans and advances to customers subject to expected credit losses	16 108 282	15 162 841
Expected credit losses on loans and advances to customers at amortised cost and FVOCI ^	(174 100)	(140 725)
Suspended interest	(5 066)	(4 822)
Net loans and advances to customers at amortised cost and FVOCI ^	15 929 116	15 017 294
Loans and advances to customers at fair value through profit and loss	641 197	550 515
Net loans and advances to customers	16 570 313	15 567 809

Gross other loans and advances	117 526	142 702
Expected credit losses on other loans and advances	(12)	(76)
Net other loans and advances	117 514	142 626

^Expected credit losses above do not include £13.3 million (31 March 2023 : £5.3 million) ECL held against financial assets held at FVOCI.

In accordance with IFRS 9, interest should only be recognised on the net position (i.e. gross loans and advances less ECL) on

positions in default. Suspended interest relates to interest not recognised, relating to the ECL on the loans and advances in default.

For further analysis on loans and advances for the Group, refer to pages 175 to 179 in the notes to risk and capital

management.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

127

26 . Loans and advances to customers and other loans and advances (continued)


At 31 March	2024
£’000	2024
Expected credit losses on loans and advances to customers at amortised cost and FVOCI^
Balance as at 1 April 2022	130 805
Charge to the income statement	53 592
Reversals and recoveries recognised in the income statement	(1 094)
Write-offs	(45 684)
Exchange adjustments	3 106
Balance as at 31 March 2023	140 725
Charge to the income statement	82 358
Reversals and recoveries recognised in the income statement	(83)
Write-offs	(48 018)
Exchange adjustments	(882)
Balance as at 31 March 2024	174 100
Expected credit loss on other loans and advances
Balance as at 1 April 2022	19
Charge to the income statement	69
Exchange adjustments	(12)
Balance as at 31 March 2023	76
Release to the income statement	(64)
Balance as at 31 March 2024	12

^Expected credit losses above do not include £13.3 million (31 March 2023 : £5.3 million) ECL held against financial assets held at FVOCI.

27 . Other securitised assets and liabilities arising on securitisation


At 31 March	2024	2023
£’000	2024	2023
Other securitised assets are made up of the following categories of assets:
Loans and advances to customers	66 233	74 226
Other debt securities	469	4 005
Total other securitised assets	66 702	78 231
The associated liabilities are recorded on-balance sheet in the following line items:
Liabilities arising on securitisation of other assets	71 751	81 609



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

128

28 . Interests in associated undertakings and joint venture holdings


At 31 March	2024	2023
£’000	2024	2023
Interests in associated undertakings and joint venture holdings consist of:
Net asset value	202 735	46 480
Goodwill and intangibles within the carrying value	654 512	5 840
Investment in associated undertakings and joint venture holdings	857 247	52 320
Associated undertakings and joint venture holdings comprise listed and unlisted investments
Analysis of the movement in our share of net assets:
At the beginning of the year	46 480	61 140
Exchange adjustments	(98)	228
Acquisitions*	119 230	—
Derecognition from stepped acquisition/disposals	(2 123)	(565)
Impairment	—	(282)
Share of post-taxation profits of associates and joint venture holdings^	39 217	5 371
Share of other comprehensive income of associates and joint venture holdings	257	—
Dividends received	(228)	(19 412)
At the end of the year	202 735	46 480
Analysis of the movement in goodwill and intangibles:
At the beginning of the year	5 840	5 755
Exchange adjustments	(126)	224
Acquisitions*	660 191	—
Derecognition from stepped acquisition	(5 714)	—
Amortisation of acquired intangibles of associates	(5 679)	—
Impairment	—	(139)
At the end of the year	654 512	5 840

^Included within the share of post-taxation profit from associates and joint venture holdings is an expense of £16.6 million in Rathbones presented within operational

items in the income statement. In the prior year, included within the share of post-taxation profit from associates and joint venture holdings in the income statement is

an impairment of £421 000.

*Refer to note 34 for more details.


	Rathbones Group plc
	2024
Details of material associated undertakings
Summarised financial information (£’000):
For the year to 31 March
Operating income*	436 272
Profit after taxation*	35 000
At 31 March
Total assets	4 853 534
Total liabilities	3 472 425

Effective interest in issued share capital	41.25%
Net asset value	119 230
Goodwill and intangibles^^	660 191
Fair value of 41.25% interest in Rathbones Group	779 421
Carrying value of interest – equity method ^	788 437

*Income statement and other comprehensive income items are only shown for the period for which they are equity accounted.

^ The investment in Rathbones was initially recognised on 21 September 2023 at a fair value of £779.4 million with subsequent equity accounted earnings and

amortisation of the intangible asset increasing the value to £788.4 million.

^^The Group elected to apply the 12-month measurement exemption to finalise the purchase price allocation, with a provisional allocation of £523.9 million to goodwill

and £136.3 million to intangible assets arising from client relationships. The allocation is incomplete at year-end as additional analysis is required to finalise the nature

and value of intangible assets.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

129

29 . Deferred taxation


At 31 March	2024	2023
£’000	2024	2023
Deferred taxation assets	119 730	112 347
Deferred taxation liabilities	—	—
Net deferred taxation assets	119 730	112 347
The net deferred taxation assets arise from:
Deferred capital allowances	62 042	60 249
Income and expenditure accruals	1 096	3 404
Asset in respect of unexpired options	42 436	30 859
Unrealised fair value adjustments on financial instruments	11 748	25 584
Losses carried forward	2 046	2 079
Asset in respect of pension deficit	362	372
Deferred taxation on acquired intangibles	—	(10 200)
Net deferred taxation assets	119 730	112 347
Reconciliation of net deferred taxation assets
At the beginning of the year	112 347	110 377
Release to income statement – current year taxation	9 924	9 577
Movement directly in other comprehensive income	(7 686)	(4 738)
Arising on acquisitions/disposals	5 201	(2 998)
Exchange adjustments	(56)	129
At the end of the year	119 730	112 347

Deferred tax assets are recognised to the extent it is likely that profits will arise in future periods. The assessment of the likelihood

of future profits is based on past performance and current projections. Deferred taxation assets are not recognised in respect of

capital losses and excess management expenses as crystallisation of capital gains and the eligibility of potential losses is uncertain.

There are trading losses carried forward of £89.9 million (2023 : £99.5 million), capital losses carried forward of £190 million ( 2023:

£199.5 million) and excess management expenses of £2.5 million ( 2023: £2.5 million) on which deferred tax assets have not been

recognised due to uncertainty regarding future profits against which these losses can be utilised. Of the £89.9 million trading

losses, £8.5 million will expire in the next four years.

30 . Other assets


At 31 March	2024	2023
£’000	2024	2023
Gross other assets	740 121	965 449
Expected credit loss	—	—
Net other assets	740 121	965 449
Financial assets
Settlement debtors	336 901	500 959
Trading initial margin	4 732	10 327
Prepayments and accruals	5 017	25 656
Other	80 993	95 376
	427 643	632 318
Non-financial assets
Trading properties	62 500	75 000
Prepayments and accruals	23 051	29 109
Finance lease receivables	174 754	207 203
Indirect taxation assets receivable	80	1 043
Other	52 093	20 776
	312 478	333 131
	740 121	965 449



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

130

31 . Property and equipment


At 31 March	Freehold properties	Right-of-use assets^	Leasehold improvements	Furniture and vehicles	Equipment	Operating leases*	Total
£’000	Freehold properties	Right-of-use assets^	Leasehold improvements	Furniture and vehicles	Equipment	Operating leases*	Total
2024
Cost
At the beginning of the year	36	141 830	58 368	7 156	26 791	1 431	235 612
Exchange adjustments	—	(268)	(41)	45	(22)	—	(286)
Acquisition of subsidiaries	—	—	—	506	—	—	506
Additions	—	8 063	892	221	1 972	53	11 201
Disposals	—	(292)	(2)	(110)	(86)	(188)	(678)
Deconsolidation of subsidiaries	—	(52 403)	(12 118)	—	(14 262)	—	(78 783)
Write-off	—	—	—	—	(5 928)	—	(5 928)
At the end of the year	36	96 930	47 099	7 818	8 465	1 296	161 644
Accumulated depreciation
At the beginning of the year	(36)	(55 861)	(32 164)	(4 197)	(21 055)	(1 285)	(114 598)
Exchange adjustments	—	134	25	42	19	—	220
Acquisition of subsidiaries	—	—	—	(256)	—	—	(256)
Disposals	—	242	2	110	84	174	612
Deconsolidation of subsidiaries	—	20 568	9 684	—	11 662	—	41 914
Depreciation and impairment charge for the year**	—	(12 504)	(5 211)	(703)	(1 872)	(28)	(20 318)
Write-off	—	—	—	—	3 729	—	3 729
At the end of the year	(36)	(47 421)	(27 664)	(5 004)	(7 433)	(1 139)	(88 697)
Net carrying value	—	49 509	19 435	2 814	1 032	157	72 947
2023
Cost
At the beginning of the year	36	139 730	77 402	7 062	23 507	3 466	251 203
Exchange adjustments	—	557	2 789	22	35	—	3 403
Acquisition of subsidiaries	—	—	—	—	183	—	183
Additions	—	7 165	2 222	72	3 318	—	12 777
Disposals	—	(5 622)	(24 045)	—	(252)	(2 035)	(31 954)
At the end of the year	36	141 830	58 368	7 156	26 791	1 431	235 612
Accumulated depreciation
At the beginning of the year	(36)	(45 209)	(26 287)	(3 639)	(17 756)	(3 221)	(96 148)
Exchange adjustments	—	(228)	(50)	(18)	(29)	—	(325)
Acquisition of subsidiaries	—	—	—	—	(167)	—	(167)
Disposals	—	4 076	119	—	246	1 992	6 433
Depreciation and impairment charge for the year**	—	(14 500)	(5 946)	(540)	(3 349)	(56)	(24 391)
At the end of the year	(36)	(55 861)	(32 164)	(4 197)	(21 055)	(1 285)	(114 598)
Net carrying value	—	85 969	26 204	2 959	5 736	146	121 014

*These are assets held by the Group, in circumstances where the Group is lessor..

**Included within the depreciation and impairment charge for the year above is £4 million (2023: £9 million) of depreciation expense relating to discontinued operations,

which is presented as part of the profit after taxation from discontinued operations in the income statement.

^ Right-of-use assets primarily comprise property leases under IFRS 16



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

131

32 . Goodwill


At 31 March	2024	2023
£’000	2024	2023
Cost
At the beginning of the year	286 430	280 194
Acquisition of subsidiaries	56 268	6 236
Adjustment to goodwill on acquisition within the measurement period	(200)	—
Deconsolidation of subsidiaries	(242 355)	—
Exchange adjustments	(311)	—
At the end of the year	99 832	286 430
Accumulated impairments
At the beginning of the year	(31 163)	(30 358)
Impairments	—	(805)
At the end of the year	(31 163)	(31 163)
Net carrying value	68 669	255 267
Analysis of goodwill by line of business:
Wealth & Investment	—	242 555
Specialist Banking	68 669	12 712
Total Group	68 669	255 267

Goodwill is tested annually for impairment, or more frequently if evidence exists that goodwill might be impaired, by comparing the

carrying value to its recoverable amount.

The recoverable amount of goodwill is determined based on expected cash flows within the cash-generating units of the Group

to which the goodwill is allocated. Key assumptions within the calculation include discount rates, growth rates in revenue, and

related expenditure and loan impairment rates.

Discount rates are based on pre-tax rates that reflect current market conditions, adjusted for the specific risks associated with the

cash-generating unit. Growth rates are based on industry growth forecasts. Cash flow forecasts are based on the most recent

financial budgets for the next financial year and are extrapolated for a period of three to five years, adjusted for expected future

events.

The most significant cash-generating unit giving rise to goodwill is Capitalmind with goodwill of £56.3 million. A detailed impairment

assessment, including sensitivity test of the cash generating unit (CGU) has been carried out which shows a headroom of £6.52

million. As part of the assessment, a break-even point scenario has been considered. This highlights the CGU would have zero

headroom were revenues to be reduced by 10% over the forecast period.

Key assessment input:

1. Forecast revenue based on 31 March 2024 actual

2. Growth rate 2%

3. Discount rate 11.6%

Movement in goodwill

During the year ended 31 March 2024, goodwill decreased by £242.4 million as a result of the deconsolidation of Investec Wealth &

Investment following the all-share combination with Rathbones Group. For more details refer to note 34.

The increase of £56.3 million is due to the acquisition of Capitalmind in a stepped acquisition during the year.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

132

33 . Software and other acquired intangible assets


	Software			Other acquired intangible assets
At 31 March	Acquired software	Internally generated software	Total	Client relationships*	Total	Total
£’000	Acquired software	Internally generated software	Total	Client relationships*	Total	Total
2024
Cost
At the beginning of the year	33 671	3 298	36 969	199 070	199 070	236 039
Exchange adjustments	(42)	—	(42)	(5)	(5)	(47)
Acquisition of subsidiaries	—	—	—	945	945	945
Additions	710	—	710	—	—	710
Disposals	(381)	—	(381)	—	—	(381)
Deconsolidation of subsidiaries	(8 591)	(3 298)	(11 889)	(194 771)	(194 771)	(206 660)
At the end of the year	25 367	—	25 367	5 239	5 239	30 606
Accumulated amortisation and impairments
At the beginning of the year	(26 300)	(1 254)	(27 554)	(158 520)	(158 520)	(186 074)
Exchange adjustments	39	—	39	—	—	39
Disposals	240	—	240	—	—	240
Deconsolidation of subsidiaries	6 542	1 643	8 185	160 646	160 646	168 831
Amortisation**	(1 317)	(389)	(1 706)	(7 365)	(7 365)	(9 071)
At the end of the year	(20 796)	—	(20 796)	(5 239)	(5 239)	(26 035)
Net carrying value	4 571	—	4 571	—	—	4 571
2023
Cost
At the beginning of the year	28 800	3 104	31 904	186 729	186 729	218 633
Exchange adjustments	230	—	230	—	—	230
Acquisition of subsidiaries	—	194	194	10 882	10 882	11 076
Additions	4 659	—	4 659	1 459	1 459	6 118
Disposals	(18)	—	(18)	—	—	(18)
At the end of the year	33 671	3 298	36 969	199 070	199 070	236 039
Accumulated amortisation and impairments
At the beginning of the year	(24 321)	(517)	(24 838)	(145 922)	(145 922)	(170 760)
Exchange adjustments	(195)	—	(195)	—	—	(195)
Acquisition of subsidiaries	—	(105)	(105)	27	27	(78)
Disposals	18	—	18	—	—	18
Amortisation**	(1 802)	(632)	(2 434)	(12 625)	(12 625)	(15 059)
At the end of the year	(26 300)	(1 254)	(27 554)	(158 520)	(158 520)	(186 074)
Net carrying value	7 371	2 044	9 415	40 550	40 550	49 965

*Client relationships are acquired intangibles.

**Included within the amortisation charge above is £7 million (2023: £13.6 million) of amortisation expense relating to discontinued operations, which is presented as

part of the profit after taxation from discontinued operations in the income statement.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

133

34. Acquisitions and disposals

During the reporting period the Group completed a stepped acquisition increasing its shareholding in the Capitalmind associate

from 30% to 60% for a total consideration attributable to the increase in shareholding of £29.4 million and therefore as at

31 March 2024 has consolidated these entities as subsidiaries. The non-controlling interest has been measured as the

proportionate share of the identifiable net assets. Goodwill of £56.3 million, including a deferred taxation liability of £0.2 million and

an intangible asset of £0.9 million have been recognised as a consequence of this increased shareholding.

The goodwill recognised is the difference between the purchase price for the additional 30% acquired, the fair value of the

previously held 30%, the non-controlling interest measured at its proportionate share of 40% of net asset, and the fair value of the

identifiable assets and liabilities on transaction date. Goodwill represents the value of acquired intangible assets as of the

acquisition date that did not meet the criteria for separate recognition, such as the assembled workforce of partners and potential

contracts subject to negotiation.

Goodwill on acquisition is calculated as follows:


£’000
Consideration*	29 352
Fair value of previously held 30% holding^	27 505
	56 857
Fair value of identifiable net assets	452
Intangible assets	945
Less, deferred taxation liability on intangible assets	(236)
Less, non-controlling interests as proportionate share of acquired net assets	(572)
	589
Goodwill	56 268

*Consideration attributable to the purchase of 30% was made up of £20.9 million cash and £8.5 million deferred consideration. Deferred consideration is not contingent

on any performance measures.

^Included within Investment income in the Income statement is a gain of £4.2 million from the remeasurement of the previously held 30% holding.


£’000
Fair value of identifiable net assets
Loans and advances to banks	2 332
Property and equipment	250
Other assets	3 533
Other liabilities	(5 663)
	452

Post-acquisition operating income of £16.6 million and profit after taxation of £2.6 million have been included in the consolidated

income statement for the reporting period.

During the prior year, the Group acquired Murray Asset Management for a net cash consideration of £9.7 million.

In the current year, as a result of the all-share combination of Investec Wealth & Investment Limited and Rathbones Group Plc, as

detailed below, Investec Wealth and Investment Limited ceased to be a subsidiary. There were no significant disposals of

subsidiaries during the prior year.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

134

34. Acquisitions and disposals (continued)

Discontinued operations

Investec Wealth & Investment Limited

On 21 September 2023, the Investec Group successfully completed the all-share combination of Investec Wealth & Investment

Limited with Rathbones Group Plc (Rathbones). On completion Rathbones issued new Rathbones shares in exchange for 100% of

Investec Wealth & Investment Limited’s share capital. The Group now owns 41.25% of the economic interest in the enlarged

Rathbones Group, with the Group’s voting rights limited to 29.9%. The Group's holding in Rathbones Group Plc is equity accounted

for as an interest in associated undertakings and joint venture holdings in accordance with IAS 28.

Income statement of discontinued operations


For the year to 31 March	2024	2023
£’000	2024	2023
Interest income	17 755	23 627
Interest expense	(431)	(859)
Net interest income	17 324	22 768
Fee and commission income	161 610	324 908
Fee and commission expense	—	—
Investment income	—	—
Trading income arising from
– customer flow	—	—
– balance sheet management and other trading activities	—	—
Other operating income	—	—
Operating income	178 934	347 676
Expected credit loss impairment charges	—	—
Operating income after expected credit loss impairment charges	178 934	347 676
Operating costs	(131 106)	(255 909)
Operating profit before acquired intangibles and strategic actions	47 828	91 767
Amortisation of acquired intangibles	(6 424)	(12 625)
Operating profit	41 404	79 142
Gain on all-share combination net of implementation costs	359 339	(4 938)
Profit before taxation	400 743	74 204
Taxation on operating profit before acquired intangibles and strategic actions	(11 973)	(17 201)
Taxation on acquired intangibles and strategic actions	781	2 031
Profit after taxation	389 551	59 034
Profit attributable to non-controlling interests of discontinued operations	—	—
Earnings attributable to shareholders	389 551	59 034

Gain on loss of control of Investec Wealth & Investment Limited

The gain is calculated as follows:


£’000
Fair value of 41.25% interest in Rathbones Group Plc	779 421
Net asset value of Investec Wealth & Investment previously consolidated (including goodwill)	(405 755)
Gain on the combination of Rathbones Group (before tax)	373 666
Implementation costs	(14 327)
Gain on combination of Rathbones Group (before tax)	359 339
Taxation on gain	(834)
Gain on combination of Rathbones Group net of taxation and implementation costs	358 505

Major classes of assets and liabilities


£’000
Loans and advances to banks	172 595
Goodwill	242 355
Other assets	360 378
Other liabilities	(369 573)
	405 755



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

135

35 . Other trading liabilities


At 31 March	2024	2023
£’000	2024	2023
Short positions
– Equities	18 449	28 184
	18 449	28 184

36. Customer accounts (deposits)


At 31 March	2024	2023
£’000	2024	2023
Demand	5 583 899	5 560 748
Transactional	484 625	742 116
Fixed	9 447 201	6 923 542
Notice	5 274 886	5 895 515
	20 790 611	19 121 921

37 . Debt securities in issue


At 31 March	2024	2023
£’000	2024	2023
Repayable in:
Less than three months	16 660	28 447
Three months to one year	96 842	138 265
One to five years	1 148 929	962 545
Greater than five years	10 675	320 288
	1 273 106	1 449 545
Debt securities in issue shown above comprise:
Senior unsecured notes	976 336	951 125
Structured notes	295 576	497 226
Redeemable preference shares	1 194	1 194
	1 273 106	1 449 545

38 . Other liabilities


At 31 March	2024	2023
£’000	2024	2023
Financial liabilities
Settlement liabilities	310 134	411 824
Other creditors and accruals^	165 112	128 273
Other non-interest-bearing liabilities	107 801	96 180
Expected credit losses on undrawn commitments and guarantees	11 258	15 659
	594 305	651 936
Non financial liabilities
Other creditors and accruals	175 216	228 720
Lease liabilities	243 951	322 767
Other non-interest-bearing liabilities	10 608	18 894
Indirect taxation liabilities payable	1 733	10 412
	431 508	580 793
	1 025 813	1 232 729

^Included in Other creditors and accruals in the current year is a provision relating to motor vehicle financing. Refer to note 49 for more details.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

136

38. Other liabilities (continued)

The maturity analysis of the lease liabilities is shown below:


	2024		2023
At 31 March	Undiscounted lease payments	Present value	Undiscounted lease payments	Present value
£’000	Undiscounted lease payments	Present value	Undiscounted lease payments	Present value
Lease liabilities included in other liabilities
Lease liabilities payable in:
Less than one year	55 810	53 152	60 631	57 770
One to two years	164 646	151 874	58 833	54 959
Two to three years	14 981	14 104	172 391	153 591
Three to four years	14 369	13 847	19 539	18 884
Four to five years	5 319	5 114	19 026	17 852
Later than five years	6 099	5 860	20 919	19 711
	261 224	243 951	351 339	322 767

Reconciliation from opening balance to closing balance


At 31 March	2024
£’000	2024
Balance as at 1 April 2022	344 802
Interest on lease liabilities	13 235
New leases	3 009
Repayment of lease liabilities	(57 324)
Remeasurement of lease liabilities	4 114
Exchange adjustments	14 931
Balance as at 31 March 2023	322 767
Interest on lease liabilities	11 576
New leases	7 973
Deconsolidation of subsidiaries	(39 752)
Repayment of lease liabilities	(54 020)
Exchange adjustments	(4 593)
Balance as at 31 March 2024	243 951



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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137

39 . Subordinated liabilities


At 31 March	2024	2023
£’000	2024	2023
Issued by Investec Bank plc
Subordinated fixed rate reset callable medium-term notes – amortised cost	—	71 060
Issued by Investec plc
Subordinated fixed rate reset callable medium-term notes – amortised cost	668 810	660 423
	668 810	731 483
Remaining maturities:
In one year or less, or on demand	—	—
In more than one year, but not more than two years	—	—
In more than two years, but not more than five years	—	—
In more than five years	668 810	731 483
	668 810	731 483
Reconciliation from opening balance to closing balance
At the beginning of the year	731 483	758 739
New issue	—	345 590
Redemption	(70 000)	(347 925)
Accrual of interest	42 067	32 501
Repayment of interest	(44 100)	(40 455)
Hedge accounting/amortisation of discount	9 360	(16 967)
At the end of the year	668 810	731 483

The only potential event of default in relation to the subordinated debt is the non-payment of principal or interest. The only remedy

available to the holders of the subordinated debt in the event of default would be to petition for the winding up of the issuing entity.

In a winding up no amount will be paid in respect of the subordinated debt until all other creditors have been paid in full.

Medium-term notes

Subordinated fixed rate reset callable medium-term notes (denominated in Pound Sterling) – accounted for at

amortised cost

On 24 July 2018, Investec Bank plc issued £420 000 000 of 4.25% subordinated notes due 2028 at a discount (2028 notes).

Interest is paid annually. The notes are listed on the London Stock Exchange. The notes are redeemable at par on 24 July 2028,

with a one-time redemption option on the early redemption date 24 July 2023 subject to conditions.

On 6 December 2022, Investec Bank plc completed a tender offer to purchase £350 000 000 aggregate nominal amount of the

notes at a cash purchase price of 99.446 pence plus an accrued interest payment. The total value of the debt redeemed was £353

605 000 (excluding interest £347 926 000).

On 24 July 2023, Investec Bank plc exercised the one-time option to early redeem the remaining £70 000 000 aggregate nominal

amount of the notes at par plus an accrued interest payment. Including the interest, the total value of the debt redeemed was

£72 975 000.

Subordinated callable fixed rate resettable medium-term notes (denominated in Pound Sterling) – accounted for at

amortised cost

On 4 October 2021, Investec plc issued £350 000 000 of 2.625% subordinated notes due 2032 at a discount (2032 notes).

Interest, after the initial short-period distribution paid on 4 January 2022, is paid annually commencing on 4 January 2023 and

ending on the maturity date. The notes are listed on the London Stock Exchange. The notes will be redeemed at par on

4 January 2032. The issuer may redeem the notes at par on any date in the period from 4 October 2026 to (and including)

4 January 2027 subject to conditions. If the option to redeem is not exercised, the notes will be redeemed at par on the maturity

date of 4 January 2032.

Subordinated callable fixed rate resettable medium-term notes (denominated in Pounds Sterling) – accounted for at

amortised cost

On 6 December 2022, Investec plc issued £350 000 000 of 9.125% subordinated notes due 2033 at a discount (2033 notes).

Interest, after the initial short-period distribution paid on 6 March 2023, is paid annually commencing on 6 March 2024 and ending

on the maturity date. The notes are listed on the London Stock Exchange. The issuer may redeem the notes at par on any date in

the period from 6 December 2027 to (and including) 6 March 2028 subject to conditions. If the option to redeem is not exercised,

the notes will be redeemed at par on the maturity date of 6 March 2033.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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138

40 . Ordinary share capital


At 31 March	2024	2023
£’000	2024	2023
Issued, allotted and fully paid
Number of ordinary shares	Number	Number
At the beginning of the year	696 082 618	696 082 618
Issued during the year	—	—
At the end of the year	696 082 618	696 082 618
Nominal value of ordinary shares	£’000	£’000
At the beginning of the year	138	138
Issued during the year	—	—
At the end of the year	138	138
Number of special converting shares	Number	Number
At the beginning of the year	318 904 709	318 904 709
Buyback during the year	(23 778 903)	—
At the end of the year	295 125 806	318 904 709
Nominal value of special converting shares	£’000	£’000
At the beginning of the year	64	64
Issued during the year	—	—
At the end of the year	64	64
Number of UK DAN shares	Number	Number
At the beginning and end of the year	1	1
Nominal value of UK DAN share	£’000	£’000
At the beginning and end of the year	*	*
Number of UK DAS shares	Number	Number
At the beginning and end of the year	1	1
Nominal value of UK DAS share	£’000	£’000
At the beginning and end of the year	*	*
Number of special voting shares	Number	Number
At the beginning and end of the year	1	1
Nominal value of special voting shares	£’000	£’000
At the beginning and end of the year	*	*

*Less than £1 000.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

139

40 . Ordinary share capital (continued)

Staff share scheme

The Group operates a share option and a share purchase scheme for employees. The number of ordinary shares conditionally

allocated to employees are disclosed in note 8 .

Movements in the number of share options (each option is in respect of one share) issued to employees are as follows:


At 31 March	2024	2023
Number of shares	2024	2023
Opening balance	28 785 417	29 590 241
Deconsolidation of subsidiaries	(748 335)	—
Granted during the year	5 525 265	5 542 176
Exercised	(5 182 871)	(4 788 744)
Lapsed	(658 715)	(1 558 256)
Closing balance	27 720 761	28 785 417

The purpose of the staff share scheme is to promote an esprit de corps within the organisation, create an awareness of Investec

Group’s performance and provide an incentive to maximise individual and Group performance by allowing all staff to share in the

risks and rewards of the Group.

The Group makes awards available to staff members via the underlying share trusts. The particular instrument used varies from

time to time, depending on taxation legislation and factors affecting the Group structure. Nevertheless, whatever the instrument

chosen, its underlying value depends solely on the performance of the Group’s share price.

At present, the practice of the Group is to grant all permanent staff members a share allocation, based on their annual package,

after completing six months of employment. In line with the objective of providing a long-term incentive for staff, these share

awards vest over periods varying from three to five years.

After the initial allocation referred to above, additional allocations are made to staff members at the discretion of Group

management depending on the individual performance and contribution made by the respective staff members.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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140

41 . Perpetual preference shares


At 31 March	2024	2023
£’000	2024	2023
Perpetual preference share capital	29	29
Perpetual preference share premium	24 765	24 765
	24 794	24 794
Issued by Investec plc
2 754 587 (2023 : 2 754 587) non-redeemable, non-cumulative, non-participating preference shares of £0.01 each, issued at a premium of £8.58 per share.
– Perpetual preference share capital	29	29
– Perpetual preference share premium	23 607	23 607

Perpetual preference shareholders will receive an annual dividend if declared based on the coupon rate (being equivalent to the base rate plus 1%) multiplied by the deemed value on a daily basis and payable in two semi-annual instalments.

An ordinary dividend will not be declared by Investec plc unless the perpetual preference dividend has been declared.

If declared, perpetual preference dividends are payable semi-annually at least seven business days prior to the date on which Investec plc pays its ordinary dividends, if any, but shall be payable no later than 120 business days after 31 March and 30 September respectively.

Issued by Investec plc – Rand-denominated
131 447 (2023 : 131 447) non-redeemable, non-cumulative, non-participating perpetual preference shares of ZAR0.001 each, issued at an average premium of ZAR99.999 per share.
– Perpetual preference share capital	*	*
– Perpetual preference share premium	1 158	1 158

Rand-denominated perpetual preference shareholders will receive a dividend if declared, based on the coupon rate (being equivalent to South African prime rate multiplied by 95%), multiplied by the deemed value on a daily basis and payable in two semi-annual instalments.

An ordinary dividend will not be declared by Investec plc unless the Rand-denominated perpetual preference dividend has been declared.

If declared, perpetual preference dividends are payable semi-annually at least seven business days prior to the date on which Investec plc pays its ordinary dividends, if any, but shall be payable no later than 120 business days after 31 March and 30 September respectively.

*Less than £1 000.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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141

42 . Ordinary share premium


At 31 March	2024	2023
£’000	2024	2023
Share premium account	555 812	555 812

43 . Treasury shares


At 31 March	2024	2023
£’000	2024	2023
Treasury shares held by subsidiaries of Investec plc	192 783	181 797
	Number	Number
Investec plc ordinary shares held by subsidiaries	53 401 625	49 720 148
Reconciliation of treasury shares	Number	Number
At the beginning of the year	49 720 148	48 997 877
Purchase of own shares by subsidiary companies	10 278 362	7 823 716
Shares disposed of by subsidiaries	(6 596 885)	(7 101 445)
At the end of the year	53 401 625	49 720 148
Market value of treasury shares	£'000	£'000
Investec plc	283 883	223 542
	283 883	223 542

Subsidiary companies which hold treasury shares are the staff share trusts which facilitate share-based awards within the Group.

44 . Other Additional Tier 1 securities in issue


At 31 March	2024	2023
£’000	2024	2023
Fixed Rate Reset Perpetual Additional Tier 1 Write Down Capital Securities	458 108	250 000

On 5 October 2017, Investec plc issued £250 million Fixed Rate Reset Perpetual Additional Tier 1 Write Down Capital Securities at

par. On 1 March 2024, the Company bought back £142 million of these securities, leaving £108 million of the original securities

outstanding as of 31 March 2024. The securities are perpetual and pay a distribution rate on 5 March, June, September and

December, commencing from 5 December 2017. At each distribution payment day, the Company can decide whether to pay the

distribution rate, which is non-cumulative, in whole or in part. The distribution rate is 6.75% per annum until 5 December 2024;

thereafter, the distribution rate resets every five years to a rate of 5.749% per annum plus the benchmark gilts rate. The securities

will be automatically written down and the investors will lose their entire investment in the securities should the CET1 capital ratio of

the Investec plc Group, as defined in the PRA’s rules, fall below 7%. The securities are redeemable at the option of the Company on

5 December 2024 or on each distribution payment date thereafter. No such redemption may be made without the consent of the

PRA.

On 28 February 2024, Investec plc issued £350 million of Fixed Rate Reset Perpetual Additional Tier 1 Write Down Capital

Securities at par. These securities are perpetual and pay interest on a semi-annual basis on 28 February and 28 August each year,

commencing on 28 August 2024. At each interest payment date, Investec plc can decide whether to pay the coupon, which is non-

cumulative, in whole or in part. The interest rate is 10.50% per annum until 28 February 2030; thereafter it resets every subsequent

five years to a rate of 6.566% per annum plus the benchmark gilt rate. The securities will be automatically written down and the

investors will lose their entire investment in the securities should the CET1 capital ratio of the Investec plc Group, as defined in the

PRA’s rules, fall below 7%. The securities are redeemable at the option of the Company on any day falling in the period from (and

including) 28 August 2029 to (and including) 28 February 2030 or on any day falling in the period of six months prior to (and

including) any five-year reset date thereafter. No such redemption may be made without the consent of the PRA.

45 . Non-controlling interests


At 31 March	2024	2023
£’000	2024	2023
Non-controlling interests in partially held subsidiaries	2 851	951

The increase in non-controlling interests in the current year primarily relates to the stepped acquisition of Capitalmind measured at

its proportionate share of 40% net asset value.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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142

46 . Finance lease disclosures


	2024		2023
At 31 March	Total future minimum payments	Present value	Total future minimum payments	Present value
£’000	Total future minimum payments	Present value	Total future minimum payments	Present value
Finance lease receivables included in loans and advances to customers
Lease receivables due in:
Less than one year	231 750	183 405	234 669	194 458
One to two years	174 095	142 619	166 503	142 178
Two to three years	122 889	104 657	104 705	91 470
Three to four years	74 590	65 667	63 927	57 578
Four to five years	32 985	29 837	27 849	25 781
Later than five years	11 443	10 059	7 102	6 367
	647 752	536 244	604 755	517 832
Unearned finance income	(111 508)		(86 923)
Net investment in the lease	536 244		517 832

At 31 March 2024 , unguaranteed residual values accruing to the benefit of the Group were £5.9 million ( 2023 : £4.1 million).

Finance leases in the Group mainly relate to leases on property, equipment and motor vehicles.


	2024		2023
At 31 March	Total future minimum payments	Present value	Total future minimum payments	Present value
£’000	Total future minimum payments	Present value	Total future minimum payments	Present value
Finance lease receivables included in other assets
Lease receivables due in:
Less than one year	39 565	36 914	40 746	37 282
One to two years	148 434	135 466	40 607	36 486
Two to three years	1 298	1 291	151 674	130 897
Three to four years	1 082	1 083	1 306	1 269
Four to five years	—	—	1 306	1 269
Later than five years	—	—	—	—
	190 379	174 754	235 639	207 203
Unearned finance income	(15 625)		(28 436)
Net investment in the lease	174 754		207 203

Included in interest income on the income statement is £30.8 million (2023: £37.4 million) from finance lease receivables.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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143

47 . Notes to the cash flow statement


At 31 March	2024	2023
£’000	2024	2023
Profit before taxation adjusted for non-cash items and other required adjustments is derived as follows:
Profit before taxation	804 382	367 924
Adjustment for non-cash items included in net income before taxation:
Impairment of goodwill	—	805
Amortisation of acquired intangibles	7 364	12 625
Net gain on step acquisition of subsidiaries	(4 063)	—
Net gain on deconsolidation and disposal of subsidiaries	(373 666)	(30)
Depreciation of operating lease assets	28	56
Depreciation and impairment of property, equipment, software and other intangibles	24 196	26 768
Expected credit loss impairment charges	85 995	66 752
Share of post-taxation profit of associates and joint venture holdings	(55 793)	(4 950)
Non-operating income from associates	22 255	—
Dividends received from associates and joint venture holdings	228	19 413
Share-based payments and employee benefit liability recognised	22 989	22 304
Profit before taxation adjusted for non-cash items	533 915	511 667
Increase in operating assets
Loans and advances to banks	277	530
Reverse repurchase agreements and cash collateral on securities borrowed	198 582	108 774
Sovereign debt securities	(706 390)	(55 967)
Bank debt securities	(92 601)	(143 007)
Other debt securities	(10 860)	(273 114)
Derivative financial instruments	193 766	86 645
Securities arising from trading activities	(29 795)	35 628
Investment portfolio	73 699	37 007
Loans and advances to customers	(1 092 955)	(1 195 731)
Other loans and advances	25 176	(19 978)
Securitised assets	11 529	14 856
Other assets	(56 197)	174 360
Goodwill	200	—
	(1 485 569)	(1 229 997)
Increase in operating liabilities
Deposits by banks	2 111	145 570
Derivative financial instruments	(232 154)	(158 479)
Other trading liabilities	(9 735)	(14 760)
Repurchase agreements and cash collateral on securities lent	(54 438)	(15 299)
Customer accounts	1 668 690	828 030
Debt securities in issue	(176 439)	(198 632)
Securitised liabilities	(9 858)	(14 276)
Other liabilities	176 284	(147 145)
	1 364 461	425 009



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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144

48 . Commitments


At 31 March	2024	2023
£’000	2024	2023
Undrawn facilities	2 327 114	2 345 034
Other commitments	34 075	44 628
	2 361 189	2 389 662

Commitments include expected credit losses (ECL) of £11 million ( 2023 : £16 million) reported in other liabilities.

The Group has entered into forward foreign exchange contracts and loan commitments in the normal course of its banking

business for which the fair value is recorded on-balance sheet.


	Carrying amount of pledged assets		Related liability
At 31 March	2024	2023	2024	2023
£’000	2024	2023	2024	2023
Pledged assets
Loans and advances to banks	19 008	44 670	12 367	39 810
Reverse repurchase agreements and cash collateral on securities borrowed	—	115 421	—	103 278
Sovereign debt securities	28 362	224 019	16 852	164 287
Bank debt securities	39 187	28 432	23 284	21 721
Securities arising from trading activities	29 310	35 139	27 398	34 031
Loans and advances to customers	1 255 309	708 860	745 873	494 892
Other loans and advances	2 504	8 121	1 629	7 160
	1 373 680	1 164 662	827 403	865 179

The assets pledged by the Group are strictly for the purpose of providing collateral for the counterparty. To the extent that the

counterparty is permitted to sell and/or repledge the assets, they are classified on the balance sheet as reverse repurchase

agreements and cash collateral on securities borrowed.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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145

49 . Contingent liabilities, legal matters and provisions


At 31 March	2024	2023
£’000	2024	2023
Guarantees and assets pledged as collateral security:
Guarantees and irrevocable letters of credit	575 272	502 251
	575 272	502 251

The amounts shown above are intended only to provide an indication of the volume of business outstanding at the balance sheet

date.

Guarantees are issued by Investec plc and Investec Bank plc and its subsidiaries on behalf of third parties and other Group

companies.

Support is provided by Investec plc to its subsidiaries where appropriate.

Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS), the UK’s statutory fund of last resort, provides compensation to customers

of UK authorised financial institutions in the event that an institution which is a participating member of the FSCS is unable, or is

likely to be unable, to pay claims against it.

The FSCS raises annual levies from participating members based on their level of participation (in the case of deposits, the

proportion that their protected deposits represent to total protected deposits) as at 31 December of the year preceding the

scheme year. Investec Bank plc is a participating member of the FSCS.

At the date of these financial statements, it is not possible to estimate whether there will ultimately be additional levies on the

industry, the level of Group’s market participation or other factors that may affect the amounts or timing of amounts that may

ultimately become payable, nor the effect that such levies may have upon operating results in any particular financial period.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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146

49. Contingent liabilities, legal matters and provisions (continued)

Legal and regulatory matters

The Group operates in a legal and regulatory environment that exposes it to legal, regulatory and litigation risks. As a result, the

Group is involved in disputes, legal proceedings and is subject to enquiries and examinations, requests for information, audits,

investigations and other proceedings by regulators and competition authorities which arise in the ordinary course of business. The

Group evaluates all facts, the probability of the outcome of the proceedings and advice from internal and external legal counsel

when considering accounting and regulatory implications. At the present time the Group does not expect the ultimate resolution of

any of these ongoing regulatory reviews and other matters to have a material adverse effect on its financial position.

Historical German dividend tax arbitrage transactions

Investec Bank plc has previously been notified by the Office of the Public Prosecutor in Cologne, Germany, that it and certain of its

current and former employees may be involved in possible charges relating to historical involvement in German dividend tax

arbitrage transactions (known as cum-ex transactions). Investigations are ongoing and no formal proceedings have been issued

against Investec Bank plc by the Office of the Public Prosecutor. In addition, Investec Bank plc received certain enquiries in respect

of client tax reclaims for the periods 2010-2011 relating to the historical German dividend arbitrage transactions from the German

Federal Tax Office (FTO) in Bonn. The FTO has provided more information in relation to their claims and Investec Bank plc has

sought further information and clarification.

Investec Bank plc is cooperating with the German authorities and continues to conduct its own internal investigation into the

matters in question. A provision is held to reflect the estimate of financial outflows that could arise as a result of this matter. There

are factual issues to be resolved which may have legal consequences, including financial penalties.

In relation to potential civil claims; whilst Investec Bank plc is not a claimant nor a defendant to any civil claims in respect of cum-ex

transactions, Investec Bank plc has received third party notices in relation to two civil proceedings in Germany and may elect to join

the proceedings as a third party participant. Investec Bank plc has itself served third party notices on various participants to these

historic transactions in order to preserve the statute of limitations on any potential future claims that Investec Bank plc may seek to

bring against those parties, should Investec Bank plc incur any liability in the future. Investec Bank plc has also entered into

standstill agreements with some third parties in order to suspend the limitation period in respect of the potential civil claims. While

Investec Bank plc is not a claimant nor a defendant to any civil claims at this stage, it cannot rule out the possibility of civil claims by

or against Investec Bank plc in future in relation to the relevant transactions.

The Group has not provided further disclosure with respect to these historical dividend arbitrage transactions because it has

concluded that such disclosure may be expected to seriously prejudice its outcome.

Motor finance commission review

Following a review into the motor vehicle financing market completed by the (Financial Conduct Authority) FCA in March 2019 and

subsequent policy statement issued in July 2020, the use of discretionary commission arrangements was prohibited with effect

from 28 January 2021 on the basis that such arrangements had the potential to cause consumer detriment. The Group fully

complied with this requirement.

On 11 January 2024, the FCA announced a further industry wide review of historical motor finance commission arrangements, in

order to assess whether such arrangements had in practice caused consumer detriment. The FCA currently plans to communicate

a decision on next steps towards the end of the third quarter of 2024 on the basis of the evidence collated as part of this review.

The FCA has indicated that such steps could include establishing an industry-wide consumer redress scheme.

The Group has to date received a small number of complaints in respect of motor finance commissions and is actively engaging

with the FOS (Financial Ombudsman Service) in its assessment of these complaints. The Group continues to believe that its

historical practices were compliant with the law and regulations in place at the time, and welcomes the FCA intervention through its

industry wide review. Nevertheless, the Group recognises that costs and awards could arise in the event that the FCA concludes

there has been industry wide misconduct and customer loss that requires remediation. Those costs and awards could arise as the

result of a redress scheme, or from adverse FOS/litigation decisions.

Accordingly, in response to the FCA announcement, the Group has recognised a provision of £30 million. This includes estimates

for operational and legal costs, including litigation costs, together with estimates for potential awards, based on various scenarios

using a range of assumptions. The time period applied in the calculations is between June 2015, the commencement of the

business, and 28 January 2021, the date that discretionary commission arrangements were prohibited.

While the FCA review is progressing there is significant uncertainty across the industry as to the extent of any misconduct and

customer loss that may be identified, and/or the nature, extent and timing of any remediation action that may subsequently be

required. The Group therefore notes that the ultimate financial impact of the FCA investigation could be either higher or lower than

the amount provided for, but is satisfied that the provision it has currently made is reasonable.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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147

50 . Related party transactions


At 31 March	2024	2023
£’000	2024	2023
Compensation of key management personnel and directors
Details of directors’ remuneration and interest in shares, including the disclosures required by IAS 24
Related party transactions for the compensation of key management personnel and directors have been included in the section marked as audited in the Investec remuneration report 2024 .
Transactions, arrangements and agreements involving directors and others:
Transactions, arrangements and agreements involving directors and with directors and connected persons and companies controlled by them, and with officers of the Company, were as follows:
Directors, key management and connected persons and companies controlled by them
Loans
At the beginning of the year	16 024	14 443
Increase in loans*	3 156	6 217
Decrease in loans*	(4 343)	(4 636)
Exchange adjustments	(1 341)	—
At the end of the year	13 496	16 024
Guarantees
At the beginning of the year	100	78
Additional guarantees granted	—	32
Decrease in guarantees*	(94)	—
Exchange adjustments	(6)	(10)
At the end of the year	—	100
Deposits
At the beginning of the year	(10 917)	(12 902)
Increase in deposits	(2 128)	(2 207)
Decrease in deposits*	4 076	4 192
Exchange adjustments	894	—
At the end of the year	(8 075)	(10 917)

*Movements primarily relate to normal course of business and changes in directorship during the current year.

The above transactions were made in the ordinary course of business and on substantially the same terms, including interest rates

and security, as for comparable arm’s length transactions with persons of a similar standing or, where applicable, with other

employees. The transactions did not involve more than the normal risk of repayment. None of these loans have been impaired.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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148

50 . Related party transactions (continued)


	Investec Limited and subsidiaries
At 31 March	2024	2023
£’000	2024	2023
Balances with other related parties
Assets
Loans and advances to banks	538	4 263
Derivative financial instruments	1	473
Other assets	3 538	6 086
Liabilities
Deposits by banks	24 053	3 375
Derivative financial instruments	64	3 534
Customer accounts (deposits)	6 857	6 366
Debt securities in issue	51 515	33 395
Repurchase agreements and cash collateral on securities lent	—	20 208
Other liabilities	449	309

During the year to 31 March 2024, interest of £0.4 million ( 2023 : £0.6 million) was paid to entities in the Investec Limited Group.

Interest of £188 000 ( 2023 : £821 000) was received from Investec Limited Group.

In the normal course of business, services are rendered between Investec plc and Investec Limited entities. In the year to

31 March 2024, this resulted in a net payment to Investec Limited Group of £26 million ( 2023: £21.8 million).

The Group has an investment in Grovepoint (UK) Limited in which a previous Investec director has significant influence.

The Group’s investment has been revalued in the current year to £65.5 million (2023: £41.5 million) with no further committed

funding. The terms and conditions of the transaction were no more favourable than those available, or which might be expected to

be available, on similar transactions to non-related entities on an arm’s length basis.

At 31 March 2024, the Group held £63 000 ( 2023: £74 000) of customer accounts (deposits) from the Ninety One Group on-

balance sheet and a £18 000 debtor (2023: £36 000) for IFRS 2 recharges in relation to the share scheme. In addition, a lease

guarantee of £8 million (2023: £8 million) has been provided by Investec plc on behalf of Ninety One, with income of £443 000

received during the year (2023: £487 000).

During the year to 31 March 2024, the Group paid £767 000 (2023: £761 000) for services rendered in the ordinary course

of business and received £9.5 million ( 2023: £24 000) from associates and joint venture holdings.

Due to the nature of the Group’s business, there could be transactions with entities where some of the Group’s directors may

be mutual directors. These transactions are in the ordinary course of business and are on an arm’s length basis.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

149

51 . Hedges

The Group uses derivatives for the management of financial risks relating to its asset and liability portfolios, mainly associated

with non-trading interest rate risks and exposures to foreign currency risk. Most non-trading interest rate risk is transferred from

the originating business to the Central Treasury in the Specialist Bank. Once aggregated and netted, Central Treasury, as the sole

interface to the wholesale market for cash and derivative transactions, actively manages the liquidity mismatch and non-trading

interest rate risk from our asset and liability portfolios. In this regard, Treasury is required to exercise tight control of funding,

liquidity, concentration and non-trading interest rate risk within defined parameters.

The accounting treatment of accounting hedges is dependent on the requirement to identify a direct relationship between

a hedged item and hedging instrument. This relationship is established in limited circumstances based on the manner in which

the Group manages its risk exposure. Below is a description of each category of accounting hedges achieved by the Group.

In addition to fair value hedges and cash flow hedges, the Group maintains a structural hedging programme to reduce the

sensitivity of earnings to short-term interest rate movements. For more detail refer to page 195.

Fair value hedges

Fair value hedges are entered into mainly to hedge the exposure of changes in fair value of fixed rate financial instruments

attributable to interest rates.


At 31 March	Description of financial instrument designated as hedging instrument (All included within derivative financial instruments on the balance sheet)	Notional value of hedging instrument	Fair value of hedging instrument	Cumulative fair value gains or (losses) on hedging instrument	Current year fair value gains or (losses) on hedging instrument	Cumulative fair value gains or (losses) on hedged item*	Current year fair value gains or (losses) on hedged item
£’000		Notional value of hedging instrument	Fair value of hedging instrument			Cumulative fair value gains or (losses) on hedged item*	Current year fair value gains or (losses) on hedged item
2024
Assets	Interest rate swap	2 371 336	126 798	132 974	(54 334)	(127 854)	30 439
Liabilities	Interest rate swap	6 387 935	(61 876)	(61 876)	35 364	63 141	(32 760)
		8 759 271	64 922	71 098	(18 970)	(64 713)	(2 321)
2023
Assets	Interest rate swap	2 486 101	181 173	187 307	108 415	(158 293)	(96 153)
Liabilities	Interest rate swap	5 591 029	(97 127)	(97 240)	(57 321)	95 899	56 206
		8 077 130	84 046	90 067	51 094	(62 394)	(39 947)

*Change in fair value used as the basis for recognising hedge effectiveness for the period.

The hedging instruments share the same risk exposures as the hedged items. Hedge effectiveness is determined with reference

to retrospective and prospective testing, but to the extent hedging instruments are exposed to different risks than the hedged

items, this could result in hedge ineffectiveness or hedge accounting failures.

Sources of ineffectiveness include the following:

• Mismatches between the contractual terms of the hedged item and hedging instrument, including basis differences

• If a hedging relationship becomes over-hedged, for example, if the hedged item is partially redeemed but the original hedging

instrument remains in place.

Included within balance sheet management and other trading activities in the income statement is a £1.8 million gain (2023:

£ 10.9 million gain) arising from hedge ineffectiveness.

There are no accumulated fair value hedge adjustments for hedged items that have ceased to be adjusted for hedging gains

and losses.


	Carrying amount of hedged item
At 31 March	2024	2023
£’000	2024	2023
Assets
Sovereign debt securities	77 888	61 468
Bank debt securities	21 130	—
Other debt securities	13 584	15 363
Loans and advances to customers	2 038 635	2 152 411
Other assets *	56 668	91 662
Liabilities
Debt securities in issue	757 282	679 656
Customer accounts (deposits)	4 922 286	4 501 412
Subordinated liabilities	700 000	312 872

*Other assets includes aviation leasing related hedges.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

150

51. Hedges (continued)


At 31 March	Up to one month	One month to three months	Three months to six months	Six months to one year	One to five years	Greater than five years	Total
£’000	Up to one month	One month to three months	Three months to six months	Six months to one year	One to five years	Greater than five years	Total
Maturity analysis of hedged items
2024
Assets – notionals
Sovereign debt securities	—	—	—	8 000	64 000	10 000	82 000
Bank debt securities	—	—	—	—	22 000	—	22 000
Other debt securities	—	—	—	—	10 420	3 164	13 584
Loans and advances to customers	8 901	47 443	74 758	135 433	1 333 782	438 317	2 038 634
Other assets*	2 818	5 661	8 566	17 411	22 212	—	56 668
Liabilities – notionals
Debt securities in issue	—	—	—	30	783 366	—	783 396
Customer accounts (deposits)	—	132 111	1 006 825	2 989 176	787 048	7 125	4 922 285
Subordinated liabilities	—	—	—	—	—	700 000	700 000
2023
Assets – notionals
Sovereign debt securities	—	—	—	—	65 000	—	65 000
Other debt securities	—	—	—	—	4 490	11 234	15 724
Loans and advances to customers	165	9 469	25 555	52 874	839 971	1 382 532	2 310 566
Other assets*	2 765	5 545	8 388	17 052	57 912	—	91 662
Liabilities – notionals
Debt securities in issue	—	—	—	—	526 883	200 000	726 883
Customer accounts (deposits)	275 634	343 652	690 451	2 784 016	420 393	—	4 514 146
Subordinated liabilities	—	—	—	—	—	350 000	350 000

*Other assets includes aviation leasing related hedges.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

151

51. Hedges (continued)

Cash flow hedges

The change in the benchmark interest rate exposes the Group to cash flow variability risk from both existing and highly probable

future transactions. During the year the Group entered into interest rate swap transactions to mitigate the cash flow variability risk.

The aggregate expected cash flows were hedged based on cash flow forecasts with reference to terms and conditions present

in the affected contractual arrangements. Changes in fair value were initially recognised in other comprehensive income and

reclassified to the income statement when the cash flows affected the income statement.

A reconciliation of the cash flow hedge reserve can be found in the statement of changes in equity.

Hedging instruments and ineffectiveness


	2024
	Carrying Amount			Change in fair value used to calculate hedge ineffectiveness	Gain/(loss) recognised in OCI*	Ineffectiveness (loss) recognised in the income statement
At 31 March	Notional	Asset	Liability
£’000	Notional	Asset	Liability
Interest rate risk
Interest rate swaps	350 000	3 210	—	2 034	2 170	(114)
	350 000	3 210	—	2 034	2 170	(114)


	2023**
	Carrying Amount			Change in fair value used to calculate hedge ineffectiveness	Gain/(loss) recognised in OCI*	Ineffectiveness (loss) recognised in the income statement
At 31 March	Notional	Asset	Liability
£’000	Notional	Asset	Liability
Interest rate risk
Interest rate swaps	—	—	—	30 539	27 635	—
	—	—	—	30 539	27 635	—

* Included within the gain/(loss) recognised in OCI are amounts amortised to the income statement where the hedged cash flows are still expected to occur.

Hedging items in cash flow hedges


	Change in fair value used for calculating hedge ineffectiveness
At 31 March	2024	2023**
£’000	2024	2023**
Loans and advances to customers	(3 781)	—
Customer accounts (deposits)	1 633	—
	(2 148)	—

** No cash flow hedges were designated as at 31 March 2023 which were in a hedge relationship during the reporting period.

Impact of cash flow hedges on profit and loss and other comprehensive income


	Cash flow reserve
For the year to	2024	2023
£’000s	2024	2023
At the beginning of the year	27 635	—
Gain recognised in other comprehensive income on effective portion of changes in fair value of hedging instruments	2 148	30 539
Loss reclassified to income statement when hedged item affected net profit	(5 250)	(2 904)
Taxation charge relating to cash flow hedges	(6 869)	—
At the end of the year	17 664	27 635



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

152

52 . Liquidity analysis of financial liabilities based on undiscounted cash flows


At 31 March	Demand	Up to one month	One month to three months	Three months to six months	Six months to one year	One year to five years	Greater than five years	Total
£’000	Demand	Up to one month	One month to three months	Three months to six months	Six months to one year	One year to five years	Greater than five years	Total
2024
Liabilities
Deposits by banks	226 716	19 659	16 494	36 318	50 188	1 981 853	—	2 331 228
Derivative financial instruments	67 622	46 520	56 680	74 249	101 758	144 603	18 631	510 063
Derivative financial instruments – held for trading	64 164	—	—	—	—	—	—	64 164
Derivative financial instruments – held for hedging risk	3 458	46 520	56 680	74 249	101 758	144 603	18 631	445 899
Other trading liabilities	18 449	—	—	—	—	—	—	18 449
Repurchase agreements and cash collateral on securities lent	17 575	67 516	—	—	—	—	—	85 091
Customer accounts (deposits)	6 192 434	2 153 954	3 529 848	3 347 685	4 314 921	1 600 860	—	21 139 702
Debt securities in issue	—	6 188	24 873	49 224	66 217	1 285 849	1 194	1 433 545
Liabilities arising on securitisation of other assets	—	—	7 154	3 462	6 540	40 251	34 570	91 977
Other liabilities	96 395	314 277	49 982	6 031	95 375	29 082	3 163	594 305
Subordinated liabilities	—	—	—	—	41 125	164 500	855 313	1 060 938
Total on-balance sheet liabilities	6 619 191	2 608 114	3 685 031	3 516 969	4 676 124	5 246 998	912 871	27 265 298
Contingent liabilities	—	39 441	88 693	3 772	28 152	364 928	50 286	575 272
Commitments	139 830	108 511	32 337	196 253	294 082	1 282 947	384 953	2 438 913
Total liabilities	6 759 021	2 756 066	3 806 061	3 716 994	4 998 358	6 894 873	1 348 110	30 279 483

The balances in the above table will not agree directly to the balances in the consolidated balance sheet, as the table incorporates

all cash flows on an undiscounted basis relating to both principal and those associated with all future coupon payments (except for

trading liabilities and trading derivatives). Furthermore, loan commitments are generally not recognised on the balance sheet. The

cash flow profile of debt securities in issue above considers modelled early redemptions.

Trading liabilities and trading derivatives have been included in the ‘Demand’ time bucket and not by contractual maturity because

trading liabilities are typically held for short periods of time.

For an unaudited analysis based on discounted cash flows, refer to page 194 .



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

153

52. Liquidity analysis of financial liabilities based on undiscounted cash flows

(continued)


At 31 March	Demand	Up to one month	One month to three months	Three months to six months	Six months to one year	One year to five years	Greater than five years	Total
£’000	Demand	Up to one month	One month to three months	Three months to six months	Six months to one year	One year to five years	Greater than five years	Total
2023
Liabilities
Deposits by banks	348 445	14 387	6 414	26 652	44 507	1 918 353	—	2 358 758
Derivative financial instruments	175 712	31 595	78 615	74 315	126 099	229 550	19 203	735 089
Derivative financial instruments – held for trading	165 152	—	—	—	—	—	—	165 152
Derivative financial instruments – held for hedging risk	10 560	31 595	78 615	74 315	126 099	229 550	19 203	569 937
Other trading liabilities	28 184	—	—	—	—	—	—	28 184
Repurchase agreements and cash collateral on securities lent	41 194	43 875	—	54 461	—	—	—	139 530
Customer accounts (deposits)	6 463 001	837 966	4 417 730	3 044 016	3 301 016	1 246 483	34	19 310 246
Debt securities in issue	—	3 348	35 179	88 916	83 172	909 991	557 979	1 678 585
Liabilities arising on securitisation of other assets	—	—	5 920	159	9 607	49 555	34 532	99 773
Other liabilities	40 059	488 904	14 198	34 926	37 347	29 531	6 971	651 936
Subordinated liabilities	—	—	7 963	2 975	9 188	246 400	855 312	1 121 838
Total on-balance sheet liabilities	7 096 595	1 420 075	4 566 019	3 326 420	3 610 936	4 629 863	1 474 031	26 123 939
Contingent liabilities	—	91	90 777	2 794	10 024	320 301	78 264	502 251
Commitments	167 414	72 597	55 524	167 819	218 945	1 382 284	400 955	2 465 538
Total liabilities	7 264 009	1 492 763	4 712 320	3 497 033	3 839 905	6 332 448	1 953 250	29 091 728



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

154

53 . Principal subsidiaries, associated companies and joint venture holdings –

Investec plc


			Interest
	Principal activity	Country of incorporation	2024	2023
At 31 March	Principal activity	Country of incorporation	2024	2023
Direct subsidiaries of Investec plc
Investec 1 Limited	Investment holding	England and Wales	100%	100%
Indirect subsidiaries of Investec plc
Investec Asset Finance PLC	Leasing	England and Wales	100%	100%
Investec Bank plc	Investment holding	England and Wales	100%	100%
Investec Bank (Channel Islands) Limited	Banking institution	Guernsey	100%	100%
Investec Bank (Switzerland) AG	Banking institution and wealth manager	Switzerland	100%	100%
Investec Group Investments (UK) Limited	Investment holding	England and Wales	100%	100%
Investec Holdings Australia Pty Limited	Holding company	Australia	100%	100%
Investec Investments (UK) Limited	Investment holding	England and Wales	100%	100%
Investec Europe Limited	MiFiD firm	Ireland	100%	100%
Investec Securities (US) LLC	Financial services	USA	100%	100%
Investec Wealth & Investment Limited	Investment management services	England and Wales	-	100%
Investec-Capitalmind Investment Limited	Non trading	England and Wales	100%	-

All of the above subsidiary undertakings are included in the consolidated accounts.

The subsidiaries listed above are only in relation to subsidiary undertakings whose results or financial position, in the opinion of the

directors, have a significant impact on the financial statements.

For more details on interests in associated undertakings and joint venture holdings refer to note 28 .

A complete list of subsidiary, associated undertakings and joint venture holdings as required by the Companies Act 2006 is

included in note j to the Investec plc company accounts on pages 211 to 215.

Consolidated structured entities

Investec plc has no equity interest in the following structured entities, which are consolidated. Typically, a structured entity is an

entity in which voting or similar rights are not the dominant factor in deciding control. The judgements to assess whether the Group

has control over these structures include assessing the purpose and design of the entity and considering whether the Group or

another involved party with power over the relevant activities is acting as a principal in its own right or as an agent on behalf of

others.


Name of principal structured entity	Type of structured entity
Cavern Funding 2020 plc	Securitised auto receivables
Landmark Mortgage Securities No. 2 plc	Securitised residential mortgages
Temese Funding 2 plc	Securitised receivables
Gresham Leasing One Limited	Aircraft related

For additional detail on the other securitised assets and liabilities arising on securitisation, refer to note 27.

Details of the risks to which the Group is exposed through all of its securitisations are included in the notes to risk and capital

management on page 187.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

155

53. Principal subsidiaries, associated companies and joint venture holdings –

Investec plc (continued)

The key assumptions for the main types of structured entities which the Group consolidates are summarised below:

Securitised residential mortgages

The Group has securitised residential mortgages in order to provide investors with exposure to residential mortgage risk and to

raise funding. These structured entities are consolidated due to the Group’s holdings of equity notes combined with its control over

servicing activities. The Group is not required to fund any losses above those incurred on the notes it has retained; such losses are

reflected in any impairment of securitised mortgages as those assets have not been derecognised.

Structured debt and loan portfolios

The Group has structured debt and loan portfolios for the purpose of issuing asset-backed securities. These structured entities are

consolidated due to the Group’s retention of equity notes and because it continues to act as the collateral manager. The Group is

not required to fund any losses above those incurred on the notes it has retained.

Securitised receivables

The Group has securitised portfolios of medium-term lease and hire purchase receivables. These structured entities are

consolidated as the Group has retained the equity notes and control over servicing activities. The Group is not required to fund

any losses above those incurred on the notes it has retained.

Other structured entities – commercial operations

The Group also consolidates a number of structured entities where control arises from rights attached to lending facilities and

similar commercial involvement. These arise primarily in the areas of aircraft funds, where the Group has rights which allow it

to maximise the value of the assets held and investments in mining projects due to its exposure to equity like returns and ability

to influence the strategic and financial decision-making.

The Group is not required to fund any losses above those which could be incurred on debt positions held or swaps which exist

with these structured entities. The risks to which the Group is exposed from these structured entities are related to the underlying

assets held in the structures.

Significant restrictions

As is typical for a large group of companies, there are restrictions on the ability of the Group to obtain distributions of capital,

access the assets or repay the liabilities of members of the Group due to the statutory, regulatory and contractual requirements

of its subsidiaries.

These are considered below:

Regulatory requirements

Subsidiary companies are subject to prudential regulation and regulatory capital requirements in the countries in which they are

regulated. These require entities to maintain minimum capital, leverage and exposure ratios restricting the ability of these entities

to make distributions of cash or other assets to the parent company. Regulated subsidiaries of the Group are required to maintain

liquidity pools to meet PRA and local regulatory requirements. The main subsidiaries affected are: Investec Bank plc, Investec Bank

(Channel Islands) Limited and Investec Bank (Switzerland) AG, which must maintain compliance with the regulatory minimum.

Capital management within the Group is discussed in the notes to risk and capital management on pages 200 to 202 .

Statutory requirements

The Group’s subsidiaries are subject to statutory requirements not to make distributions of capital and unrealised profits,

and generally maintain solvency. These requirements restrict the ability of subsidiaries to remit dividends, except in the case

of a legal capital reduction or liquidation.

Contractual requirements

Asset encumbrance – the Group uses its financial assets to raise finance in the form of securitisations and through the liquidity

schemes of central banks. Once encumbered, the assets are not available for transfer around the Group. The assets typically

affected are disclosed in notes 19 and 56.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

156

53. Principal subsidiaries, associated companies and joint venture holdings –

Investec plc (continued)

Structured associates

The Group has investments in a number of structured funds specialising in aircraft financing where the Group acts as adviser

or fund manager in addition to holding units within the fund. As a consequence of these roles and funding, the Group has

significant influence over the fund and therefore the funds are treated as associates.

The Group applies the venture capital exemption to these holdings and, as such, the investments in the funds are accounted for

at fair value and held within the investment portfolio on the balance sheet.


Type of structured entity	Nature and purpose	Interest held by the Group/income earned
Aircraft investment funds	To generate fees from managing assets on behalf of third party investors	Investments in units issued by the fund
	These vehicles are financed through the issue of units to investors	Management fees

The table below sets out an analysis of the carrying amounts of interests held by the Group in structured associate entities.


At 31 March 2024	Line on the balance sheet	Carrying value £'000	Maximum exposure to loss	Income earned from structured entity	£'000
£’000	Line on the balance sheet	Carrying value £'000	Maximum exposure to loss	Income earned from structured entity	£'000
Aircraft investment funds	Investment portfolio	22 108	Limited to the carrying value	Investment income	226


At 31 March 2023	Line on the balance sheet	Carrying value £'000	Maximum exposure to loss	Income earned from structured entity	£'000
£’000	Line on the balance sheet	Carrying value £'000	Maximum exposure to loss	Income earned from structured entity	£'000
Aircraft investment funds	Investment portfolio	21 164	Limited to the carrying value	Investment income	2 832



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

157

54 . Unconsolidated structured entities

The Group enters into transactions with unconsolidated structured entities in the normal course of business to facilitate customer

transactions and for specific investment opportunities. Unconsolidated structured entities are those which the Group does not

control in line with basis of consolidation as set out in the accounting policies on pages 80 to 91.

The table below describes the types of unconsolidated structured entities the Group has transactions with.


Type of structured entity	Nature and purpose	Interest held by the Group/income earned

Investment funds	To generate fees from managing assets on behalf of third party investors	Investments in units issued by the fund


	These vehicles are financed through the issue of units to investors	Management fees


Debt funds	To generate a return for investors by providing exposure to residential mortgage risk	Investments in units issued by the fund


	These vehicles are financed through the issue of notes to investors	Interest income/Investment income/ Management fees


Aircraft leasing structures	To generate fees from managing assets on behalf of third party investors	Investments in units issued by the fund


	These vehicles are financed through the issue of units to investors	Interest income/Investment income

The table below shows the Group's maximum exposure to the unconsolidated structured entities.


At 31 March 2024	Investment fund	Debt fund	Aircraft leasing structure	Total
£’000	Investment fund	Debt fund	Aircraft leasing structure	Total
Loans and advances (fair value through profit and loss)	—	—	11 477	11 477
Loans and advances (amortised cost)	—	—	—	—
Investment portfolio (fair value through profit and loss)	30 722	—	1 114	31 836
Investment portfolio (amortised cost)	—	10	—	10
Other debt securities (fair value through profit and loss)	—	32 252	—	32 252
Total assets	30 722	32 262	12 591	75 575
Other liabilities (fair value through profit and loss)	12	—	—	12
Total liabilities	12	—	—	12
Off-balance sheet commitments	13 288	198	2 610	16 096
Maximum exposure at 31 March 2024	43 998	32 460	15 201	91 659


At 31 March 2023	Investment fund	Debt fund	Aircraft leasing structure	Total
£’000	Investment fund	Debt fund	Aircraft leasing structure	Total
Loans and advances (fair value through profit and loss)	—	—	418	418
Loans and advances (amortised cost)	—	—	5 636	5 636
Investment portfolio (fair value through profit and loss)	22 833	—	—	22 833
Investment portfolio (amortised cost)	—	—	—	—
Other debt securities (fair value through profit and loss)	—	43 680	—	43 680
Total assets	22 833	43 680	6 054	72 567
Other liabilities (fair value through profit and loss)	36	—	—	36
Total liabilities	36	—	—	36
Off-balance sheet commitments	13 172	202	2 668	16 042
Maximum exposure at 31 March 2023	35 969	43 882	8 722	88 573



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

158

54. Unconsolidated structured entities (continued)

Financial support provided to the unconsolidated structured entities

There are no contractual agreements which require the Group to provide any additional financial or non-financial support to these

structured entities.

During the year, the Group has not provided any such support and does not have any current intentions to do so in the future.

Sponsoring

The Group considers itself a sponsor of a structured entity when it facilitates the establishment of the structured entity.

Interests in structured entities which the Group has not set up

Purchased securitisation positions

The Group buys and sells interests in structured entities that it has not originated as part of its trading activities, for example,

residential mortgage securities, commercial mortgage securities, loans to corporates and resecuritisations. In such cases the Group

typically has no other involvement with the structured entity other than the securities it holds as part of its trading activities, and

its maximum exposure to loss is restricted to the carrying value of the asset.

Details of the value of these interests is included in the notes to risk and capital management on page 187.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

159

55 . Offsetting


	Amounts subject to enforceable netting arrangements
	Effects of offsetting on-balance sheet			Related amounts not offset*
At 31 March	Gross amounts	Amounts offset	Net amounts reported on the balance sheet	Financial instruments (including non- cash collateral)	Cash collateral	Net amount
£’000	Gross amounts	Amounts offset	Net amounts reported on the balance sheet	Financial instruments (including non- cash collateral)	Cash collateral	Net amount
2024
Assets
Cash and balances at central banks	5 661 623	—	5 661 623	—	—	5 661 623
Loans and advances to banks	676 464	—	676 464	—	(19 695)	656 769
Reverse repurchase agreements and cash collateral on securities borrowed	1 140 115	—	1 140 115	(8 940)	(1 381)	1 129 794
Sovereign debt securities	1 928 134	—	1 928 134	—	—	1 928 134
Bank debt securities	297 255	—	297 255	—	—	297 255
Other debt securities	708 285	—	708 285	—	—	708 285
Derivative financial instruments	437 255	—	437 255	(124 113)	(158 857)	154 285
Securities arising from trading activities	157 332	—	157 332	(27 398)	—	129 934
Loans and advances to customers	16 570 313	—	16 570 313	—	—	16 570 313
Other loans and advances	117 514	—	117 514	—	(399)	117 115
Other securitised assets	66 702	—	66 702	—	—	66 702
Investment portfolio	405 410	—	405 410	—	—	405 410
Other assets	740 121	—	740 121	—	—	740 121
	28 906 523	—	28 906 523	(160 451)	(180 332)	28 565 740
Liabilities
Deposits by banks	2 174 305	—	2 174 305	—	(157 489)	2 016 816
Derivative financial instruments	472 662	—	472 662	(124 113)	(15 417)	333 132
Other trading liabilities	18 449	—	18 449	(8 940)	—	9 509
Repurchase agreements and cash collateral on securities lent	85 091	—	85 091	(17 575)	(4 677)	62 839
Customer accounts (deposits)	20 790 611	—	20 790 611	—	(2 749)	20 787 862
Debt securities in issue	1 273 106	—	1 273 106	(9 823)	—	1 263 283
Liabilities arising on securitisation of other assets	71 751	—	71 751	—	—	71 751
Other liabilities	1 025 813	—	1 025 813	—	—	1 025 813
Subordinated liabilities	668 810	—	668 810	—	—	668 810
	26 580 598	—	26 580 598	(160 451)	(180 332)	26 239 815

*The Group enters into derivatives and repurchase and reverse repurchase agreements with various counterparties which are governed by industry standard master

netting agreements. The Group holds and provides cash and securities collateral in respect of derivatives transactions covered by these agreements. The right to set

off balances under these master netting agreements or to set off cash and securities collateral only arises in the event of non-payment or default and, as a result,

these arrangements do not qualify for offsetting under IAS 32.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

160

55 . Offsetting (continued)


	Amounts subject to enforceable netting arrangements
	Effects of offsetting on-balance sheet			Related amounts not offset*
At 31 March	Gross amounts	Amounts offset	Net amounts reported on the balance sheet	Financial instruments (including non- cash collateral)	Cash collateral	Net amount
£’000	Gross amounts	Amounts offset	Net amounts reported on the balance sheet	Financial instruments (including non- cash collateral)	Cash collateral	Net amount
2023
Assets
Cash and balances at central banks	5 400 401	—	5 400 401	—	—	5 400 401
Loans and advances to banks	893 297	—	893 297	—	(42 365)	850 932
Reverse repurchase agreements and cash collateral on securities borrowed	1 338 699	—	1 338 699	(18 976)	(51 104)	1 268 619
Sovereign debt securities	1 221 744	—	1 221 744	—	—	1 221 744
Bank debt securities	204 691	—	204 691	—	—	204 691
Other debt securities	697 275	—	697 275	—	—	697 275
Derivative financial instruments	634 123	—	634 123	(202 876)	(265 816)	165 431
Securities arising from trading activities	127 537	—	127 537	(33 902)	—	93 635
Loans and advances to customers	15 567 809	—	15 567 809	—	—	15 567 809
Other loans and advances	142 626	—	142 626	—	(4 959)	137 667
Other securitised assets	78 231	—	78 231	—	—	78 231
Investment portfolio	489 204	—	489 204	—	—	489 204
Other assets	965 449	—	965 449	—	—	965 449
	27 761 086	—	27 761 086	(255 754)	(364 244)	27 141 088
Liabilities
Deposits by banks	2 172 171	—	2 172 171	—	(315 023)	1 857 148
Derivative financial instruments	704 816	—	704 816	(202 877)	(41 080)	460 859
Other trading liabilities	28 184	—	28 184	(10 337)	—	17 847
Repurchase agreements and cash collateral on securities lent	139 529	—	139 529	(20 986)	(6 244)	112 299
Customer accounts (deposits)	19 121 921	—	19 121 921	—	(1 897)	19 120 024
Debt securities in issue	1 449 545	—	1 449 545	(21 554)	—	1 427 991
Liabilities arising on securitisation of other assets	81 609	—	81 609	—	—	81 609
Other liabilities	1 232 729	—	1 232 729	—	—	1 232 729
Subordinated liabilities	731 483	—	731 483	—	—	731 483
	25 661 987	—	25 661 987	(255 754)	(364 244)	25 041 989

*The Group enters into derivatives and repurchase and reverse repurchase agreements with various counterparties which are governed by industry standard master

netting agreements. The Group holds and provides cash and securities collateral in respect of derivatives transactions covered by these agreements. The right to set

off balances under these master netting agreements or to set off cash and securities collateral only arises in the event of non-payment or default and, as a result,

these arrangements do not qualify for offsetting under IAS 32.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

161

56 . Derecognition

Transfer of financial assets that do not result in derecognition

The Group is party to securitisation transactions whereby assets continue to be recognised on-balance sheet (either fully

or partially) although they have been subject to legal transfer to another entity. Securitisations may, depending on the individual

arrangement, result in continued recognition of the securitised assets and the recognition of the debt securities issued in the

transaction.


	2024		2023
No derecognition achieved	Carrying amount of assets that continue to be recognised	Carrying amount of associated liabilities	Carrying amount of assets that continue to be recognised	Carrying amount of associated liabilities
£’000	Carrying amount of assets that continue to be recognised	Carrying amount of associated liabilities	Carrying amount of assets that continue to be recognised	Carrying amount of associated liabilities
Loans and advances to customers	1 511 765	—	1 613 838	—
Loans and advances to banks	69 389	—	80 799	—
	1 581 154	—	1 694 637	—

The transferred assets above in both the current and prior year are held within structured entities which are wholly-owned and

consolidated by the Group. There are no external parties participating in these vehicles and therefore the Group continues to have

full exposure to the risks and rewards associated with the assets and the associated liabilities are eliminated on consolidation.

There are no restrictions or limitations on the Group's recourse to the assets held within the structured entities.

For transfer of assets in relation to repurchase agreements refer to note 19.

57 . Events after the reporting date

In the ordinary course of business, events may occur that influence the credit quality of loans and advances. At the date of this

report, we have concluded that no changes are required to our ECL provisions or there is insufficient new information available

since 31 March 2024 of any conditions which existed at the balance sheet date to reliably estimate any adjustments to these ECL

provisions.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

162

58. Restatements

The effective date of the combination of Investec Wealth & Investment Limited and Rathbones Group Plc was 21 September 2023.

The Investec Wealth & Investment business has been disclosed as a discontinued operation and the income statement for the prior

period has been appropriately re-presented. Refer to note 34 for discontinued operations.

In addition, realised cash flows on interest rate swaps were incorrectly grossed up and separately recognised as interest income

and interest expense. The two lines were appropriately reduced for the gross cash flows of £196.3 million, and the net movement

was accounted for in either ‘interest income’ or ‘interest expense’ (depending on whether it was an asset or liability being hedged).

These reclassifications in the income statement for the prior reported periods and the consequential restated comparatives have

been shown below.


	Year to	Reversal of	Re-presentation as a	Year to
	31 March 2023	interest rate swaps	discontinued	31 March 2023
£’000	as previously reported	gross-up	operation	restated
Interest income	1 435 214	(196 342)	(23 627)	1 215 245
Interest expense	(698 226)	196 342	859	(501 025)
Net interest income	736 988	—	(22 768)	714 220
Fee and commission income	456 703	—	(324 908)	131 795
Fee and commission expense	(15 442)	—	—	(15 442)
Investment income	18 223	—	—	18 223
Share of post-taxation profit of associates and joint venture holdings	4 950	—	—	4 950
Trading income/(loss) arising from
– customer flow	87 366	—	—	87 366
– balance sheet management and other trading activities	13 134	—	—	13 134
Other operating income	6 879	—	—	6 879
Operating income	1 308 801	—	(347 676)	961 125
Expected credit loss impairment charges	(66 752)	—	—	(66 752)
Operating income after expected credit loss impairment charges	1 242 049	—	(347 676)	894 373
Operating costs	(854 875)	—	255 909	(598 966)
Operating profit before goodwill, acquired intangibles and strategic actions	387 174	—	(91 767)	295 407
Impairment of goodwill	(805)	—	—	(805)
Amortisation of acquired intangibles	(12 625)	—	12 625	—
Closure and rundown of the Hong Kong direct investments business	(480)	—	—	(480)
Operating profit	373 264	—	(79 142)	294 122
Financial impact of strategic actions^	(5 340)	—	4 938	(402)
Profit before taxation	367 924	—	(74 204)	293 720
Taxation on operating profit before goodwill, acquired intangibles and strategic actions	(76 824)	—	17 201	(59 623)
Taxation on goodwill, acquired intangibles and strategic actions	2 031	—	(2 031)	—
Profit after taxation from continuing operations	293 131	—	(59 034)	234 097
Profit after taxation from discontinued operations	—	—	59 034	59 034
Profit after taxation	293 131	—	—	293 131
Profit attributable to other non-controlling interests	—	—	—	—
Earnings attributable to shareholders	293 131	—	—	293 131

^Transaction costs associated with the Investec Wealth & Investment Limited and Rathbones Group Plc transaction have been re-presented as a discontinued

operation. These costs were recognised at Investec plc.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

163

59 . Credit and

counterparty risk

management

Credit and counterparty risk arises

primarily from three types of transactions:

• Lending transactions, through loans

and advances to clients and

counterparties, creating the risk that an

obligor will be unable or unwilling to

repay capital and/or interest on loans

and advances granted to them. This

category includes bank placements

where we have placed funds with

other financial institutions

• Financial instrument transactions,

producing issuer risk where payments

due from the issuer of a financial

instrument may not be received

• Trading transactions, giving rise to

settlement and replacement risk

(collectively counterparty risk):

– Settlement risk is the risk that the

settlement of a transaction does not

take place as expected, with one

party making required settlements as

they fall due but not receiving the

performance to which they are

entitled

– Replacement risk is the risk following

default by the original counterparty

resulting in the contract holder

having to enter into a replacement

contract with a second counterparty

in order to fulfil the transaction.

The relevant credit committees will also

consider wrong-way risk at the time of

granting credit limits to each

counterparty. In the banking book

environment, wrong-way risk occurs

where the value of collateral to secure a

transaction decreases as the probability

of default of the borrower or

counterparty increases. For counterparty

credit risk resulting from transactions in

traded products (such as OTC

derivatives), wrong-way risk is defined as

exposure to a counterparty that is

adversely correlated with the credit

quality of that counterparty. It arises

when default risk and credit exposure

increase together.

Credit and counterparty risk may also

arise in other ways and it is the role of

the risk management functions and the

various independent credit committees to

identify risks falling outside these

definitions.

Credit and counterparty

risk governance structure

To manage, measure, monitor and mitigate

credit and counterparty risk, independent

credit committees exist in the UK . T hese

committees also have oversight of regions

where we assume credit risk and operate

under Board-approved delegated limits,

policies and procedures. There is a high

level of executive involvement and

oversight in the credit decision-making

forums depending on the size and

complexity of the deal. It is our policy that

all credit committees include voting

members who are independent of the

originating business unit. All decisions to

enter into a transaction are based on

unanimous consent.

In addition to the credit committees, the

following processes assist in managing,

measuring and monitoring credit and

counterparty risk:

• Day-to-day arrears management and

regular arrears reporting ensure that

individual positions and any potential

adverse trends are dealt with in a

timely manner

• Watchlist Forum s review the

management of distressed loans,

potential problem loans and exposures

in arrears that require additional

attention and supervision. These

committees review ECL impairments

and staging at an asset level as well as

potential fair value adjustments to

loans and advances to customers.

They provide recommendations for the

appropriate staging and level of ECL

impairment where required

• The Forbearance Forum reviews and

monitors counterparties who have

been granted forbearance measures

• The Impairment Decision Committee

reviews recommendations from

underlying Watchlist Forums and

considers and approves the

appropriate level of ECL impairments

and staging

• The Models Forum provides an internal

screening and validation process for

credit models. We have established

independent model validation teams

who review the models and provide

feedback on the accuracy and operation

of the models and note items for further

development through the forum

• An annual review of risk appetite

frameworks and limits that are

approved by IBP ERC, Investec Group

ERC, IBP and DLC BRCC and IBP and

DLC Board.


	Credit and counterparty risk appetite

The Board has set risk appetite limits

which regulate the maximum exposures

we would be comfortable to tolerate in

order to diversify and mitigate risk.

Should there be any breaches to limits, or

where exposures are nearing limits, these

exceptions are specifically highlighted for

attention, with remedial actions reported

at IBP BRCC, DLC BRCC and the

respective Boards.

The assessment of our clients and

counterparties includes consideration of

their character, integrity, core

competencies, track record and financial

strength. A strong emphasis is placed on

the historic and ongoing stability of

income and cash flow streams generated

by the clients. Our primary assessment

method is therefore the ability of the

client or counterparty to meet their

payment obligations.

Target clients include high net worth

individuals, active wealth creators, high-

income professionals, self-employed

entrepreneurs, owner managers in small

to mid-cap corporates, sophisticated

investors, established corporates, small

and medium-sized enterprises, financial

institutions and sovereigns.

We are client-centric in our approach and

originate loans mainly with the intent of

holding these assets to maturity, thereby

developing a ‘hands-on’ and long-

standing relationship.

Interbank lending is largely reserved for

those banks and institutions in the

Group’s core geographies of activity,

which are systemic and highly rated.


	Concentration risk

Concentration risk, with respect to

credit and counterparty risk, is when large

exposures exist to a single client

or counterparty, group of connected

counterparties, or to a particular

geography, asset class or industry. An

example of this would be where a number

of counterparties are affected by similar

economic, legal, regulatory or other factors

that could mean their ability to meet

contractual obligations are correlated.

Credit and counterparty risk is always

assessed with reference to the

aggregate exposure to a single

counterparty or group of related parties

to manage concentration risk. In order to

manage concentration, we will consider a

sell-down of exposures to market

participants if required.

Concentration risk can also exist where

portfolio loan maturities are clustered to



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT

164

single periods in time. Loan maturities are

monitored on a portfolio and a

transaction level by Group risk

management, Group lending operations

as well as the originating business units.


	Country risk

Country risk, with respect to credit and

counterparty risk, refers to the risk of

lending to a counterparty operating in a

particular country or the risk inherent in a

sovereign exposure, i.e. the risk of

exposure to loss caused by events in that

country. Country risk covers all forms of

lending or investment activity whether to/

with individuals, corporates, banks or

governments. This can include

geopolitical risks, transfer and

convertibility risks, and the impact on the

borrower’s credit profile due to local

economic and political conditions.

To mitigate country risk, there is a

preference for primary exposure in the

Group’s main operating geography. The

Group will accept exposures where we

have a branch or local banking

subsidiary, and tolerate exposures to

other countries where we are facilitating

a transaction for a client who requires

facilities in a foreign geography and

where we have developed a local

understanding and capability.

The Group’s credit risk appetite with

regard to country risk is characterised by

the following principles:

• Preference is to have exposure only to

politically stable jurisdictions that we

understand and have preferably

operated in before

• There is little specific appetite for

exposures outside of the Group’s pre-

existing core geographies or target

markets

• The legal environment should be

tested, have legal precedent in line

with OECD standards and have good

corporate governance

• In certain cases, country risk can be

mitigated by taking out political risk

insurance with suitable counterparties

where deemed necessary and where

considered economic.

While we do not have a separate country

risk committee, the relevant credit

committees as well as investment

committees , IBP ERC and where

necessary, Investec Group ERC will

consider, analyse and assess the

appropriate foreign jurisdiction limits.

In the UK, following the official exit from

the European Union, it remains necessary

to avoid exposures to certain European

countries due to the resulting legal and

regulatory implications. This relates

specifically to countries in which

borrowers are legally incorporated and

any deal will be thoroughly assessed on a

case by case basis to ensure compliance

with current regulations.


	Sustainability risk (including climate and ESG)

We assess sustainability risks as part of

the credit committee or investment

committee’s evaluation of lending or

investment decisions. This includes

additional due diligence for transactions

that fall into the high-risk ESG category

(as defined by the International Finance

Corporation), which involves a

comprehensive review by the Investec

Group sustainability team.

This review identifies any potential risks

relating to:

• Environmental impacts (including

climate, nature degradation and animal

welfare) to support SDG 13

• Social injustice (including human rights,

diversity, inclusion and modern slavery,

community displacement and health

and safety risks) to support SDG 10

• Governance matters (including

corruption, fraud and controversies)

• Macro-economic impacts (including

poverty, growth, and unemployment)

to support SDG 13 and SDG10.

If the Group sustainability team flags the

transaction as a high concern issue, it will

be escalated to IBP or Investec Group

ERC before any credit or investment

decision is made. Moreover, the DLC SEC

is informed of any transactions identified

as high concern issues.


	Refer to page 184 for further detail.


	Stress testing

The Investec Group’s stress testing

framework is designed to identify and

assess vulnerabilities under stress. The

process comprises a bottom-up analysis

of the Group’s material business activities,

incorporating views from risk management

teams, business and the executive. Stress

scenarios are designed based on findings

from the bottom-up process, taking into

consideration the broader macro-

economic and political risk backdrop.

These Investec-specific stress scenarios

form an integral part of our capital

planning process and IFRS 9 reporting.

The stress testing process also informs

the risk appetite review process, and the

management of risk appetite limits and is

a key risk management tool of the Group.

This process allows the Group to identify

underlying risks and manage them

accordingly.

The Group also performs ad hoc stress

tests and reverse stress testing. Ad hoc

stress tests are conducted in response to

any type of material and/or emerging risks,

with reviews undertaken of impacted

portfolios to assess any migration in quality

and highlight any vulnerabilities, identify

portfolio concentrations and make

appropriate recommendations such as a

reduction in risk appetite limits. Reverse

stress tests are conducted to stress the

Group’s business plan to failure and

consider a broad variety of extreme and

remote events.



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165

Management and measurement

of credit and counterparty risk

Fundamental principles employed in the

management of credit and counterparty

risk include:

• A clear definition of our target market

• A quantitative and qualitative

assessment of the creditworthiness of

our clients and counterparties

• Analysis of risks, including

concentration risk (concentration risk

considerations include asset class,

industry, counterparty and

geographical concentration)

• Decisions being made with reference

to risk appetite limits

• Prudential limits

• Regular monitoring and review of

existing and potential exposures once

facilities have been approved

• A high level of executive involvement

in decision-making with non-executive

review and oversight where applicable

• Portfolio reviews and stress testing.

Within the credit approval process,

internal and external ratings are included

in the assessment of client quality.

A large proportion of the Group’s portfolio

is not rated by external rating agencies.

We place reliance upon internal

consideration of clients, counterparties

and borrowers and use ratings prepared

externally where available to support our

decision-making process.

Regular reporting of credit and

counterparty risk exposures within our

operating units are made to

management, the executives and the

Board through the DLC BRCC and IBP

BRCC. The Board reviews and approves

the appetite for credit and counterparty

risk, which is documented in risk appetite

statements and policy documents. This is

implemented and reviewed by the credit

risk management teams in each

jurisdiction.

Reviews are also undertaken of all

material businesses, where the portfolios

are analysed to assess any migration in

portfolio quality, highlight any

vulnerabilities, identify portfolio

concentrations and make appropriate

recommendations, such as a reduction in

risk appetite limits or specific exposures.


	Credit and counterparty risk – nature of activities

Credit and counterparty risk is assumed

through a range of client-driven lending

activities to private and corporate clients

as well as other counterparties, such as

financial institutions and sovereigns.

These activities are diversified across a

number of business activities:

• Core loans and advances: the majority

of credit and counterparty risk is

through core loans and advances,

which account for almost all ECL

allowances across our portfolio, which

are detailed on pages 168 to 174

• Treasury function: there are also

certain exposures, outside of core

loans and advances, where we assume

credit and counterparty risk. These

arise from treasury investments in

high-quality liquid assets, including

highly rated government,

supranational, sub-sovereign and

agency (SSA) and covered bonds, and

treasury placements where the

treasury function, as part of the daily

management of the Group’s liquidity,

places funds with central banks and

other commercial banks and financial

institutions. These transactions are

typically short-term (less than one

month) money market placements or

secured repurchase agreements.

These market counterparties are

mainly investment grade rated entities

that occupy dominant and systemic

positions in their domestic banking

markets and internationally. These

counterparties are located mainly in

the UK, Western Europe, Asia, North

America, Southern Africa and Australia.

In addition, credit and counterparty risk

arises through the following exposures:

• Customer trading activities to

facilitate hedging of client risk

positions: our customer trading

portfolios consist of derivative

contracts in interest rates, foreign

exchange, commodities, credit

derivatives and equities that are

entered into, to facilitate a client’s

hedging requirements. The

counterparties to such transactions are

typically corporates, in particular where

they have an exposure to interest rates

or foreign exchange due to operating

in sectors that include imports and

exports of goods and services. These

positions are marked-to-market,

typically with daily margin calls to

mitigate credit exposure in the event of

counterparty default

• Structured credit: these are bonds

secured against a pool of assets,

mainly UK residential mortgages or

European or US corporate leverage

loans. The bonds are typically highly

rated (single ‘A’ and above), which

benefit from a high level of credit

subordination and can withstand a

significant level of portfolio default

• Debt securities: from time to time we

take on exposures by means of

corporate debt securities rather than

loan exposures. These transactions

arise on the back of client relationships

or knowledge of the corporate market

and are based on our analysis of the

credit fundamentals

• Corporate advisory and investment

banking activities: counterparty risk in

this area is modest. The business also

trades shares on an approved basis

and makes markets in shares where

we are appointed corporate broker

under pre-agreed market risk limits.

Settlement trades are largely on a

delivery versus payment basis, through

major stock exchanges. Credit risk only

occurs in the event of counterparty

failure and would be linked to any fair

value losses on the underlying security

• Settlement risk: can arise due to

undertaking transactions in an agency

capacity on behalf of clients. However,

the risk is not considered to be

material as most transactions are

undertaken on recognised exchanges,

with large institutional clients,

monitored daily, with trades usually

settled within two to three days.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

166

Credit risk mitigation

Credit risk mitigation techniques can be

defined as all methods by which the

Group seeks to decrease the credit risk

associated with an exposure. The

Investec Group considers credit risk

mitigation techniques as part of the credit

assessment of a potential client or

business proposal and not as a separate

consideration of mitigation of risk. Credit

risk mitigants can include any collateral

item over which the Group has a charge,

netting and margining agreements,

covenants, or terms and conditions

imposed on a borrower with the aim of

reducing the credit risk inherent to that

transaction.

As the Group has limited appetite for

unsecured debt, the credit risk mitigation

technique most commonly used is the

taking of collateral, with a strong

preference for tangible assets. Collateral

is assessed with reference to the

sustainability of value and the likelihood

of realisation.

Acceptable collateral generally exhibits

characteristics that allow for it to be

easily identified and appropriately valued

and assists the Group to recover

outstanding exposures.

Where a transaction is supported by a

mortgage or charge over property, the

primary credit risk is still taken on the

borrower. In addition, the relevant credit

committee normally requires a suretyship

or guarantee in support of a transaction

in our private client business.

For property-backed lending we also

consider the client’s overall balance

sheet. The following characteristics of

the property are also considered: the

type of property; its location; and the

ease with which the property could be

relet and/or resold. Where the property is

secured by lease agreement, the credit

committee prefers not to lend for a term

beyond the maximum term of the lease.

Commercial real estate generally takes

the form of good quality property often

underpinned by strong third party leases.

Residential property is also generally of a

high quality and based in desirable

locations. Residential and commercial

property valuations will continue to form

part of our ongoing focus on collateral

assessment. It is our policy to obtain a

formal valuation of every commercial

property offered as collateral for a

lending facility before advancing funds.

Residential properties are valued by

desktop valuation and/or approved

valuers, where appropriate.

Other common forms of collateral in the

retail asset class are motor vehicles, cash

and share portfolios. Primary collateral in

private client lending transactions can

also include a high net worth individual’s

share/investment portfolio. This is

typically in the form of a diversified pool

of equity, fixed income, managed funds

and cash. Often these portfolios are

managed by Rathbones. Lending against

investment portfolios is typically geared

at conservative loan-to-value (LTV)

ratios, after considering the quality,

diversification, risk profile and liquidity of

the portfolio.

Our corporate, government and

institutional clients provide a range of

collateral including cash, corporate

assets, debtors (accounts receivable),

trading stock, debt securities (bonds),

listed and unlisted shares and

guarantees.

The majority of credit mitigation

techniques linked to trading activity is in

the form of netting agreements and daily

margining. Primarily, the market standard

legal documents that govern this include

the International Swaps and Derivatives

Association (ISDA) Master Agreements,

Global Master Securities Lending

Agreement (GMSLA) and Global Master

Repurchase Agreement (GMRA). In

addition to having ISDA documentation in

place with market and trading

counterparties in over-the-counter (OTC)

derivatives, the credit committee may

require a Credit Support Annex (CSA) to

ensure that mark-to-market credit

exposure is mitigated daily through the

calculation and placement/receiving of

cash collateral. Where netting

agreements have been signed, the

enforceability is supported by an external

legal opinion within the legal jurisdiction

of the agreement.

Set-off is applied between assets,

subject to credit risk and related liabilities

in the annual financial statements, where:

• A legally enforceable right to set-off

exists

• There is the intention to settle the

asset and liability on a net basis, or to

realise the asset and settle the liability

simultaneously.

In addition to the above accounting set-

off criteria, banking regulators impose the

following additional criteria:

• Debit and credit balances relate to the

same obligor/counterparty

• Debit and credit balances are

denominated in the same currency and

have identical maturities

• Exposures subject to set-off are risk-

managed on a net basis

• Market practice considerations.

For this reason, there will be instances

where credit and counterparty exposures

are displayed on a net basis in these

annual financial statements but reported

on a gross basis to regulators.

The legal risk function ensures the

enforceability of credit risk mitigants

under the laws of the relevant

jurisdictions. When assessing the

potential concentration risk in its credit

portfolio, consideration is given to the

types of collateral and credit protection

that form part of the portfolio.



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167


	An analysis of gross core loans, asset quality and ECL

The tables that follow provide information with respect to the

asset quality of our gross core loans on a statutory basis.

Stage 3 exposures total £531 million at 31 March 2024 or 3.3%

of gross core loans subject to ECL (2.3% at 31 March 2023).

New defaults reflect signs of individual idiosyncratic stresses

across various portfolios with no specific trends evident.

The underlying loan portfolios continue to perform and Stage 2

exposures as a percentage of gross core loans subject to ECL

decreased to 8.6% from 8.7% at 31 March 2023.


£’million	31 March 2024	31 March 2023
Gross core loans	16 744	15 709
Gross core loans at FVPL	641	551
Gross core loans subject to ECL*	16 103	15 158
Stage 1	14 181	13 494
Stage 2	1 391	1 321
of which past due greater than 30 days	150	35
Stage 3#	531	343
ECL	(187)	(146)
Stage 1	(43)	(39)
Stage 2	(33)	(32)
Stage 3	(111)	(75)
Coverage ratio
Stage 1	0.30%	0.29%
Stage 2	2.4%	2.4%
Stage 3	20.9%	21.9%
Credit loss ratio	0.58%	0.37%
ECL impairment charges on core loans	(90)	(54)
Average gross core loans subject to ECL	15 631	14 553
An analysis of Stage 3 gross core loans subject to ECL
Stage 3 net of ECL	420	268
Aggregate collateral and other credit enhancements on Stage 3	445	280
Stage 3 as a % of gross core loans subject to ECL	3.3%	2.3%
Stage 3 net of ECL as a % of net core loans subject to ECL	2.6%	1.8%

Note: Our exposure (net of ECL) to the Legacy portfolio has reduced from £37 million at 31 March 2023 to £ 32 million at 31 March 2024 . These Legacy assets are

predominately reported in Stage 3. These assets have been significantly provided for and coverage remains high at 57.1%.

* Refer to definitions on page 217 .

#Stage 3 exposures disclosed above and in the tables that follow are net of suspended interest predominantly relating to Lending and collateralised by property. Refer

to note 26 for additional information.


	An analysis of gross core loans by country of exposure


31 March 2024		31 March 2023
£16 744 million		£15 709 million


United Kingdom	83.3%	United Kingdom	83.6%
Europe (excluding UK)	9.1%	Europe (excluding UK)	8.8%
North America	5.2%	North America	5.2%
Asia	1.7%	Asia	1.4%
Other	0.5%	Other	0.6%
Australia	0.2%	Australia	0.4%



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An analysis of staging and ECL movements for core loans subject to ECL

The table below indicates underlying movements in gross core loans subject to ECL from 31 March 2023 to 31 March 2024.

The transfers between stages of gross core loans indicate the impact of stage transfers upon the gross exposure and associated

opening ECL. The increase in transfers into Stage 2 is mainly driven by idiosyncratic exposures that have deteriorated compared to

when the exposures originated, but where there is no specific concern with respect to loss. We have experienced an increase in

transfers to Stage 3, albeit not specific to any single asset class and reflective of the more challenging macro-economic

environment.

The net remeasurement of ECL arising from stage transfers represents the (increase)/decrease in ECL due to these transfers. New

lending net of repayments comprises new originations, further drawdowns, repayments and sell-downs as well as, with respect to

ECLs, Stage 3 ECLs that have been written off, typically when an asset has been sold.

The ECL impact of changes to risk parameters and models during the year largely relates to the changes in the macro-economic

scenarios as well as the release of management ECL overlay. The foreign exchange and other category largely comprises the

impact on the closing balance as a result of movements and translations in foreign exchange rates since 31 March 2023.


	Stage 1		Stage 2		Stage 3		Total
£’million	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL
At 31 March 2023	13 494	(39)	1 321	(32)	343	(75)	15 158	(146)
Lending collateralised by property at 31 March 2023	1 852	(8)	343	(12)	121	(34)	2 316	(54)
Transfer from Stage 1	(147)	1	119	(1)	28	—	—	—
Transfer from Stage 2	194	(3)	(241)	5	47	(2)	—	—
Transfer from Stage 3	—	—	—	—	—	—	—	—
ECL remeasurement arising from transfer of stage	—	2	—	—	—	(1)	—	1
New lending net of repayments (includes assets written off)	256	(2)	(53)	4	(52)	2	151	4
Changes to risk parameters and models	—	—	—	1	—	—	—	1
Foreign exchange and other	—	—	—	—	—	—	—	—
Lending collateralised by property at 31 March 2024	2 155	(10)	168	(3)	144	(35)	2 467	(48)
HNW and other private client lending at 31 March 2023	5 343	(4)	164	(1)	84	(13)	5 591	(18)
Transfer from Stage 1	(309)	—	189	—	120	—	—	—
Transfer from Stage 2	48	—	(61)	—	13	—	—	—
Transfer from Stage 3	—	—	—	—	—	—	—	—
ECL remeasurement arising from transfer of stage	—	—	—	—	—	(1)	—	(1)
New lending net of repayments (includes assets written off)	184	(2)	(32)	—	(47)	(1)	105	(3)
Changes to risk parameters and models	—	—	—	—	—	(1)	—	(1)
Foreign exchange and other	(3)	—	—	—	—	—	(3)	—
HNW and other private client lending at 31 March 2024	5 263	(6)	260	(1)	170	(16)	5 693	(23)
Corporate and other lending at 31 March 2023	6 299	(27)	814	(19)	138	(28)	7 251	(74)
Transfer from Stage 1	(589)	4	521	(4)	68	—	—	—
Transfer from Stage 2	241	(5)	(292)	7	51	(2)	—	—
Transfer from Stage 3	—	—	—	—	—	—	—	—
ECL remeasurement arising from transfer of stage	—	4	—	(10)	—	(28)	—	(34)
New lending net of repayments (includes assets written off)	854	(3)	(72)	(4)	(39)	(2)	743	(9)
Changes to risk parameters and models	—	—	—	1	—	—	—	1
Foreign exchange and other	(42)	—	(8)	—	(1)	—	(51)	—
Corporate and other lending at 31 March 2024	6 763	(27)	963	(29)	217	(60)	7 943	(116)
At 31 March 2024	14 181	(43)	1 391	(33)	531	(111)	16 103	(187)



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169

An analysis of credit quality by internal rating grade

The Group uses a 25-grade internal rating scale which measures the risk of default to an exposure without taking into account any

credit mitigation, such as collateral. This internal rating scale allows the Group to measure credit risk consistently across portfolios.

The internal rating scale is derived from a mapping to PDs and can also be mapped to external rating agency scales.


PD range	Investec internal rating scale	Indicative external rating scale
less than 0.538%	IB01 – IB12	AAA to BBB-
0.538% – 6.089%	IB13 – IB19	BB+ to B-
greater than 6.089%	IB20 – IB25	B- and below
	Stage 3	D

The internal credit rating distribution below is based on the 12-month PD at 31 March 2024 for gross core loans subject to ECL

by stage. The staging classifications are not only driven by the absolute PD, but on factors that determine a significant increase

in credit risk, including relative movement in PD since origination. There is therefore no direct correlation between the credit quality

of an exposure and its stage classification as shown in the table below:


At 31 March 2024	IB01-IB12	IB13-IB19	IB20-IB25	Stage 3	Total
£’million	IB01-IB12	IB13-IB19	IB20-IB25	Stage 3	Total
Gross core loans subject to ECL	7 662	7 590	320	531	16 103
Stage 1	7 408	6 723	50	—	14 181
Stage 2	254	867	270	—	1 391
Stage 3	—	—	—	531	531
ECL	(7)	(50)	(19)	(111)	(187)
Stage 1	(6)	(36)	(1)	—	(43)
Stage 2	(1)	(14)	(18)	—	(33)
Stage 3	—	—	—	(111)	(111)
Coverage ratio	0.1%	0.7%	5.9%	20.9%	1.2%


At 31 March 2023	IB01-IB12	IB13-IB19	IB20-IB25	Stage 3	Total
£’million	IB01-IB12	IB13-IB19	IB20-IB25	Stage 3	Total
Gross core loans subject to ECL	8 816	5 850	149	343	15 158
Stage 1	8 460	4 996	38	—	13 494
Stage 2	356	854	111	—	1 321
Stage 3	—	—	—	343	343
ECL	(12)	(50)	(9)	(75)	(146)
Stage 1	(10)	(28)	(1)	—	(39)
Stage 2	(2)	(22)	(8)	—	(32)
Stage 3	—	—	—	(75)	(75)
Coverage ratio	0.1%	0.9%	6.0%	21.9%	1.0%

The Group applies credit ratings in-line with its credit policies to all relevant financial instruments including other financial assets

(which include exposures to highly rated international banks and corporate bonds). Assessment and suitability of the rating is

vetted by the applicable credit authority and monitored as part of the overall credit management process. Where new information

that may affect the risk profile becomes available, this is considered and ratings may be adjusted accordingly.



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An analysis of core loans by

risk category – Lending

collateralised by property

Client quality and expertise are at the

core of our credit philosophy. We provide

senior debt and other funding for

property transactions, with a preference

for income-producing assets, supported

by an experienced sponsor providing a

material level of cash equity investment

into the asset and limited direct exposure

to sectors more vulnerable to cyclicality.

Our exposure to the property market is

well diversified with strong bias towards

prime locations for residential exposure

and focus on property fundamentals,

tenant quality and income diversity for

commercial assets. Debt service cover

ratios are a key consideration in the

lending process supported by reasonable

loan-to-security value ratios.

Year in review

Residential real estate has increased by

12.7% to £0.9 billion as clients take

advantage of opportunities in the current

market and undersupply of UK residential

housing. Lending collateralised by

property totalled £2.5 billion or 14.9% of

UK net core loans at 31 March 2024,

which remains in line with the Group’s risk

appetite to maintain a reduced proportion

of net core loan exposures in property-

related lending. New lending is diversified

by underlying asset classes at

conservative LTVs. Weighted average

LTV* on lending collateralised by

property remains conservative at 58%.

Development exposures are typically

undertaken at lower LTVs. These LTVs

do not take into account guarantees

provided by borrowers which provide

additional security to our lending and

would reduce LTV metrics further. Almost

all of property collateralised assets are

located in the UK.

Underwriting criteria remains

conservative and we are committed to

following a client-centric approach to

lending, only supporting counterparties

with strong balance sheets and requisite

expertise.


	Gross core loans at amortised cost and FVOCI								Gross core loans at FVPL	Gross core loans
	Stage 1		Stage 2		Stage 3		Total
£’million	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL
At 31 March 2024
Commercial real estate	1 365	(8)	119	(3)	92	(21)	1 576	(32)	49	1 625
Commercial real estate – investment	1 045	(7)	102	(1)	86	(17)	1 233	(25)	45	1 278
Commercial real estate – development	320	(1)	11	(2)	—	—	331	(3)	4	335
Commercial vacant land and planning	—	—	6	—	6	(4)	12	(4)	—	12
Residential real estate	790	(2)	49	—	52	(14)	891	(16)	5	896
Residential real estate – investment	502	(2)	40	—	25	(2)	567	(4)	5	572
Residential real estate – development	262	—	8	—	4	(1)	274	(1)	—	274
Residential vacant land and planning	26	—	1	—	23	(11)	50	(11)	—	50
Total lending collateralised by property	2 155	(10)	168	(3)	144	(35)	2 467	(48)	54	2 521
Coverage ratio		0.46%		1.8%		24.3%		1.9%
At 31 March 2023
Commercial real estate	1 241	(6)	231	(8)	76	(16)	1 548	(30)	43	1 591
Commercial real estate – investment	920	(4)	212	(8)	70	(13)	1 202	(25)	40	1 242
Commercial real estate – development	308	(2)	13	—	—	—	321	(2)	3	324
Commercial vacant land and planning	13	—	6	—	6	(3)	25	(3)	—	25
Residential real estate	611	(2)	112	(4)	45	(18)	768	(24)	37	805
Residential real estate – investment	359	(1)	39	(2)	11	(1)	409	(4)	35	444
Residential real estate – development	244	(1)	69	(1)	9	(3)	322	(5)	—	322
Residential vacant land and planning	8	—	4	(1)	25	(14)	37	(15)	2	39
Total lending collateralised by property	1 852	(8)	343	(12)	121	(34)	2 316	(54)	80	2 396
Coverage ratio		0.43%		3.5%		28.1%		2.3%

* Excludes a small portion of Legacy exposures that are predominately reported in Stage 3.



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171

An analysis of core loans by

risk category – High net worth

and other private client lending

Our Private Banking activities target high

net worth individuals, active wealth

creators, high-income professionals, self-

employed entrepreneurs, owner

managers in small to mid-cap corporates

and sophisticated investors.

Lending products are tailored to meet the

requirements of our clients and deliver

solutions to enable target clients to

create and manage their wealth. Central

to our credit philosophy is ensuring the

sustainability of cash flow and income

throughout the cycle. As such, the client

base has been defined to include high

net worth clients (who, through

diversification of income streams, should

reduce income volatility) and individuals

in defined professions which have

historically supported a sustainable

income base, irrespective of the stage in

the economic cycle.

Credit risk arises from the following

activities:

• Mortgages: provides residential

mortgage loan facilities to target

market clients

• Other high net worth lending: provides

credit facilities to high net worth

individuals and their controlled entities

as well as portfolio loans to high net

worth clients against their investment

portfolios typically managed by

Rathbones.

Year in review

High net worth and other private client

lending totalled £5.7 billion or 34.5% of

UK net core loans at 31 March 2024.

There was moderate growth in

mortgages of 4.3% in the year to 31

March 2024 reflecting the lower market

demand for mortgages given the high

interest rate and uncertain macro-

economic environment.

Growth in this area has been achieved

with strong adherence to our lending

criteria. Weighted average LTVs on

mortgages is 66%.


	Gross core loans at amortised cost and FVOCI								Gross core loans at FVPL	Gross core loans
	Stage 1		Stage 2		Stage 3		Total
£’million	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL
At 31 March 2024
Mortgages	4 589	(4)	162	—	105	(4)	4 856	(8)	41	4 897
Other high net worth lending	674	(2)	98	(1)	65	(12)	837	(15)	2	839
Total high net worth and other private client lending	5 263	(6)	260	(1)	170	(16)	5 693	(23)	43	5 736
Coverage ratio		0.11%		0.4%		9.4%		0.4%
At 31 March 2023
Mortgages	4 480	(2)	128	—	64	(7)	4 672	(9)	25	4 697
Other high net worth lending	863	(2)	36	(1)	20	(6)	919	(9)	3	922
Total high net worth and other private client lending	5 343	(4)	164	(1)	84	(13)	5 591	(18)	28	5 619
Coverage ratio		0.07%		0.6%		15.5%		0.3%



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An analysis of core loans by

risk category – Corporate and

other lending

We focus on traditional client-driven

corporate lending activities. The credit

risk management functions approve

specific credit and counterparty limits

that govern the maximum credit

exposure to each individual counterparty.

In addition, further risk management

limits exist through industry and country

limits to manage concentration risk. The

credit appetite for each counterparty is

based on the financial strength of the

principal borrower, its business model

and market positioning, the underlying

cash flow to the transaction, the

substance and track record of

management, and the security package.

Political risk insurance, and other

insurance is taken where deemed

appropriate.

The Group has limited appetite for

unsecured credit risk and facilities are

typically secured by the assets of the

underlying borrower as well as shares in

the borrower.

A summary of the nature of the lending

and/or credit risk assumed within some of

the key areas in our corporate lending

business is provided below:

• Corporate and acquisition finance:

provides senior secured loans to

proven management teams and

sponsors running mid-cap, as well as

some large-cap companies. Credit risk

is assessed against debt serviceability

based upon robust cash generation of

the business demonstrated by both

historical and forecast information.

Corporates should demonstrate

relevance in their market, an

experienced management team, able

Board members, and strong earnings

and cash flow. We typically act as a

transaction lead arranger or on a club

or bi-lateral basis, and have a close

relationship with management and

sponsors

• Asset-based lending: provides

working capital and secured corporate

loans to mid-caps. These loans are

secured by the assets of the business,

for example, the accounts receivable,

inventory and plant and machinery. In

common with our corporate lending

activities, strong emphasis is placed on

supporting companies with scale and

relevance in their industry

• Fund finance: provides debt facilities

to asset managers and fund vehicles,

principally in private equity. The

geographical focus is the UK, Western

Europe and North America where the

Group can support experienced asset

managers and their funds which show

strong, long-term value creation and

good custodianship of investors’

money. Debt facilities are typically to a

fund entity and secured against

undrawn limited partner commitments

and/or the fund’s underlying assets

• Other corporate and financial

institutions and governments:

provides senior secured loans to mid-

to-large cap companies where credit

risk is typically considered with regard

to robust cash generation from an

underlying asset and supported by

performance of the overall business

based on both historical and forecast

information

• Small ticket asset finance: provides

funding to small- and medium-sized

corporates to support asset purchases

and other business requirements. The

portfolio is highly diversified by industry

and number of clients and is secured

against the asset being financed

• Motor finance: provides specialised

motor vehicle financing originated

through Mann Island Finance Limited

(MIVF). The portfolio is composed

predominantly of private motor vehicles

to individuals attributing to a granular

book with low concentration risk

• Aviation finance: structures, arranges

and provides financing for airlines,

leasing companies, operators and

corporates secured by aircraft at

conservative LTVs. Counterparties

include flag and commercial airline

carriers, leading aircraft lessors and

corporates/operators with strong

contracted cash flows

• Energy and infrastructure finance:

arranges and provides typically long-

term financing for energy and

infrastructure assets, in particular

renewable and traditional energy

projects as well as transportation

assets, typically against contracted

future cash flows of the project(s) from

well-established and financially sound

off-take counterparties. There is a

requirement for a strong upfront equity

contribution from an experienced

sponsor.

Year in review

Corporate and other lending increased by

9.9% from £7.6 billion at 31 March 2023

to £8.4 billion at 31 March 2024. There

has been diversified growth across

multiple corporate and other lending

asset classes including other corporate

and financial institutions and

governments, energy and infrastructure

finance, motor finance, small ticket asset

finance, aviation finance and corporate

and acquisition finance. We continue to

remain client-focused in our approach,

with good quality corporates exhibiting

strong cash flows and balance sheets.

The underlying portfolios remain resilient,

albeit certain individual clients have

experienced idiosyncratic stress in a

more challenging economic environment.



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	Gross core loans at amortised cost and FVOCI								Gross core loans at FVPL	Gross core loans
	Stage 1		Stage 2		Stage 3		Total
£’million	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL	Gross exposure	ECL
At 31 March 2024
Corporate and acquisition finance	1 831	(9)	249	(7)	102	(33)	2 182	(49)	135	2 317
Asset-based lending	106	—	188	(4)	—	—	294	(4)	—	294
Fund finance	1 320	(1)	24	—	—	—	1 344	(1)	51	1 395
Other corporate and financial institutions and governments	529	(3)	65	(4)	22	(3)	616	(10)	66	682
Small ticket asset finance	1 325	(9)	211	(5)	39	(13)	1 575	(27)	—	1 575
Motor finance	1 022	(3)	81	(5)	19	(7)	1 122	(15)	—	1 122
Aviation finance	96	—	76	(1)	—	—	172	(1)	270	442
Energy and infrastructure finance	534	(2)	69	(3)	35	(4)	638	(9)	22	660
Total corporate and other lending	6 763	(27)	963	(29)	217	(60)	7 943	(116)	544	8 487
Coverage ratio		0.40%		3.0%		27.6%		1.5%
At 31 March 2023
Corporate and acquisition finance	1 794	(9)	212	(5)	53	(7)	2 059	(21)	125	2 184
Asset-based lending	271	(1)	44	—	—	—	315	(1)	—	315
Fund finance	1 359	(1)	33	—	—	—	1 392	(1)	75	1 467
Other corporate and financial institutions and governments	391	(2)	70	(1)	4	(1)	465	(4)	32	497
Small ticket asset finance	1 142	(9)	279	(6)	30	(11)	1 451	(26)	—	1 451
Motor finance	905	(3)	46	(3)	8	(3)	959	(9)	—	959
Aviation finance	115	(1)	32	(1)	—	—	147	(2)	176	323
Energy and infrastructure finance	322	(1)	98	(3)	43	(6)	463	(10)	35	498
Total corporate and other lending	6 299	(27)	814	(19)	138	(28)	7 251	(74)	443	7 694
Coverage ratio		0.43%		2.3%		20.3%		1.0%



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174

The tables that follow provide further analysis of the Group’s gross credit and counterparty exposures.

An analysis of gross credit and counterparty exposures

Gross credit and counterparty exposure totalled £30.6 billion at 31 March 2024 . Cash and near cash balances amounted to

£ 9.7 billion and are largely reflected in the following line items in the table below: cash and balances at central banks, loans and

advances to banks and sovereign debt securities. These exposures are all Stage 1. There are immaterial Stage 2 and Stage 3

exposures outside of loans and advances to customers which are small relative to the balance sheet. Loans and advances to

customers (including committed facilities) account for greater than 98% of overall ECLs.

An analysis of gross credit and counterparty exposures


£’million	31 March 2024	31 March 2023
Cash and balances at central banks	5 662	5 400
Loans and advances to banks	676	893
Reverse repurchase agreements and cash collateral on securities borrowed	1 140	1 339
Sovereign debt securities	1 928	1 222
Bank debt securities	297	205
Other debt securities	708	698
Derivative financial instruments	358	528
Securities arising from trading activities	13	28
Loans and advances to customers	16 744	15 709
Other loans and advances	118	143
Other securitised assets	2	5
Other assets	33	38
Total on-balance sheet exposures	27 679	26 208
Guarantees	115	118
Committed facilities related to loans and advances to customers	2 327	2 345
Contingent liabilities, letters of credit and other	461	384
Total off-balance sheet exposures	2 903	2 847
Total gross credit and counterparty exposures	30 582	29 055



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A further analysis of gross credit and counterparty exposures

The table below indicates in which class of asset (on the face of the consolidated balance sheet) credit and counterparty

exposures are reflected. Not all assets included in the balance sheet bear credit and counterparty risk.


At 31 March 2024	Total gross credit and counterparty exposure	of which FVPL	of which amortised cost and FVOCI	ECL#	Assets that we deem to have no legal credit exposure	Total assets
£’million	Total gross credit and counterparty exposure	of which FVPL	of which amortised cost and FVOCI	ECL#	Assets that we deem to have no legal credit exposure	Total assets
Cash and balances at central banks	5 662	—	5 662	—	—	5 662
Loans and advances to banks	676	—	676	—	—	676
Reverse repurchase agreements and cash collateral on securities borrowed	1 140	164	976	—	—	1 140
Sovereign debt securities	1 928	—	1 928	—	—	1 928
Bank debt securities	297	—	297	—	—	297
Other debt securities	708	59	649	—	—	708
Derivative financial instruments	358	358	—	—	79	437
Securities arising from trading activities	13	13	—	—	144	157
Loans and advances to customers	16 744	641	16 103	(187)	—	16 557
Other loans and advances	118	—	118	—	—	118
Other securitised assets	2	2	—	—	65ˆ	67
Investment portfolio	—	—	—	—	405*	405
Interest in associated undertakings and joint venture holdings	—	—	—	—	857	857
Current taxation assets	—	—	—	—	31	31
Deferred taxation assets	—	—	—	—	120	120
Other assets	33	—	33	—	707**	740
Property and equipment	—	—	—	—	73	73
Goodwill	—	—	—	—	69	69
Software	—	—	—	—	5	5
Other acquired intangible assets	—	—	—	—	—	—
Total on-balance sheet exposures	27 679	1 237	26 442	(187)	2 555	30 047
Guarantees	115	—	115	—	—	115
Committed facilities related to loans and advances to customers	2 327	102	2 225	(8)	—	2 319
Contingent liabilities, letters of credit and other	461	27	434	(3)	112	570
Total off-balance sheet exposures^^	2 903	129	2 774	(11)	112	3 004
Total exposures	30 582	1 366	29 216	(198)	2 667	33 051

#Includes £13.4 million of ECL held against financial assets held at FVOCI.

*Relates to exposures that are classified as investment risk in the banking book.

^While the Group manages all risks (including credit risk) from a day-to-day operational perspective, certain assets are within special purpose vehicles that ring-fence

the assets to specific credit providers and limit security to the assets in the vehicle. This balance reflects the credit exposure to credit providers external to the Group.

The credit exposure that the Group has in the vehicles is reflected in the ‘total gross credit and counterparty exposure’ for other securitised assets.

**Other assets include settlement debtors which we deem to have no credit risk exposure as they are settled on a delivery against payment basis.

^^Includes uncommitted, undrawn facilities that are not included in notes 45 and 46.



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A further analysis of gross credit and counterparty exposures (continued)


At 31 March 2023	Total gross credit and counterparty exposure	of which FVPL	of which amortised cost and FVOCI	ECL#	Assets that we deem to have no legal credit exposure	Total assets
£’million	Total gross credit and counterparty exposure	of which FVPL	of which amortised cost and FVOCI	ECL#	Assets that we deem to have no legal credit exposure	Total assets
Cash and balances at central banks	5 400	—	5 400	—	—	5 400
Loans and advances to banks	893	—	893	—	—	893
Reverse repurchase agreements and cash collateral on securities borrowed	1 339	346	993	—	—	1 339
Sovereign debt securities	1 222	24	1 198	—	—	1 222
Bank debt securities	205	—	205	—	—	205
Other debt securities	698	94	604	(1)	—	697
Derivative financial instruments	528	528	—	—	106	634
Securities arising from trading activities	28	28	—	—	100	128
Loans and advances to customers	15 709	551	15 158	(146)	—	15 563
Other loans and advances	143	—	143	—	—	143
Other securitised assets	5	5	—	—	73ˆ	78
Investment portfolio	—	—	—	—	489*	489
Interest in associated undertakings and joint venture holdings	—	—	—	—	52	52
Current taxation assets	—	—	—	—	34	34
Deferred taxation assets	—	—	—	—	112	112
Other assets	38	—	38	—	927**	965
Property and equipment	—	—	—	—	121	121
Goodwill	—	—	—	—	255	255
Software	—	—	—	—	9	9
Other acquired intangible assets	—	—	—	—	41	41
Total on-balance sheet exposures	26 208	1 576	24 632	(147)	2 319	28 380
Guarantees	118	—	118	—	—	118
Committed facilities related to loans and advances to customers	2 345	147	2 198	(13)	—	2 332
Contingent liabilities, letters of credit and other	384	—	384	(2)	121	503
Total off-balance sheet exposures^^	2 847	147	2 700	(15)	121	2 953
Total exposures	29 055	1 723	27 332	(162)	2 440	31 333

#Includes £5.3 million of ECL held against financial assets held at FVOCI.

*Relates to exposures that are classified as investment risk in the banking book.

^While the Group manages all risks (including credit risk) from a day-to-day operational perspective, certain assets are within special purpose vehicles that ring-fence

the assets to specific credit providers and limit security to the assets in the vehicle. This balance reflects the credit exposure to credit providers external to the Group.

The credit exposure that the Group has in the vehicles is reflected in the ‘total gross credit and counterparty exposure’ for other securitised assets.

**Other assets include settlement debtors which we deem to have no credit risk exposure as they are settled on a delivery against payment basis.

^^Includes uncommitted, undrawn facilities that are not included in notes 45 and 46.



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	Gross credit and counterparty exposures by industry


	High net worth and other professional individuals	Lending collateralised by property	Agriculture	Electricity, gas and water (utility services)	Public and non-business services	Business services	Finance and insurance
£’million	High net worth and other professional individuals	Lending collateralised by property	Agriculture	Electricity, gas and water (utility services)	Public and non-business services	Business services	Finance and insurance
At 31 March 2024
Cash and balances at central banks	—	—	—	—	5 662	—	—
Loans and advances to banks	—	—	—	—	—	—	676
Reverse repurchase agreements and cash collateral on securities borrowed	—	—	—	—	131	—	1 009
Sovereign debt securities	—	—	—	—	1 902	—	26
Bank debt securities	—	—	—	—	—	—	297
Other debt securities	—	—	—	—	3	24	596
Derivative financial instruments	—	1	1	7	1	6	316
Securities arising from trading activities	—	—	—	—	—	—	13
Loans and advances to customers	5 736	2 521	19	790	234	1 180	2 321
Other loans and advances	—	—	—	—	—	—	118
Other securitised assets	—	—	—	—	—	—	—
Other assets	5	—	—	—	—	—	27
Total on-balance sheet exposures	5 741	2 522	20	797	7 933	1 210	5 399
Guarantees	12	—	—	—	—	—	81
Committed facilities related to loans and advances to customers	215	300	—	433	62	158	847
Contingent liabilities, letters of credit and other	39	—	—	268	—	3	135
Total off-balance sheet exposures	266	300	—	701	62	161	1 063
Total gross credit and counterparty exposures	6 007	2 822	20	1 498	7 995	1 371	6 462
At 31 March 2023
Cash and balances at central banks	—	—	—	—	5 400	—	—
Loans and advances to banks	—	—	—	—	—	—	893
Reverse repurchase agreements and cash collateral on securities borrowed	—	—	—	—	253	—	1 086
Sovereign debt securities	—	—	—	—	1 213	—	9
Bank debt securities	—	—	—	—	—	—	205
Other debt securities	—	—	—	—	6	15	561
Derivative financial instruments	—	—	1	20	—	8	427
Securities arising from trading activities	—	—	—	—	—	1	23
Loans and advances to customers	5 619	2 396	17	513	232	1 275	2 157
Other loans and advances	—	—	—	—	—	—	130
Other securitised assets	—	—	—	—	—	—	—
Other assets	—	—	—	—	—	—	29
Total on-balance sheet exposures	5 619	2 396	18	533	7 104	1 299	5 520
Guarantees	6	—	—	1	—	—	89
Committed facilities related to loans and advances to customers	175	427	—	393	85	185	722
Contingent liabilities, letters of credit and other	—	—	—	246	—	11	108
Total off-balance sheet exposures	181	427	—	640	85	196	919
Total gross credit and counterparty exposures	5 800	2 823	18	1 173	7 189	1 495	6 439



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Retailers and wholesalers	Manufacturing and commerce	Construction	Other residential mortgages	Corporate commercial real estate	Mining and resources	Leisure, entertainment and tourism	Transport	Motor finance	Com- munication	Total

—	—	—	—	—	—	—	—	—	—	5 662
—	—	—	—	—	—	—	—	—	—	676
—	—	—	—	—	—	—	—	—	—	1 140
—	—	—	—	—	—	—	—	—	—	1 928
—	—	—	—	—	—	—	—	—	—	297
—	—	—	51	—	—	—	34	—	—	708
6	12	—	—	1	—	—	6	—	1	358
—	—	—	—	—	—	—	—	—	—	13
246	860	143	—	120	36	87	811	1 122	518	16 744
—	—	—	—	—	—	—	—	—	—	118
—	—	—	2	—	—	—	—	—	—	2
1	—	—	—	—	—	—	—	—	—	33
253	872	143	53	121	36	87	851	1 122	519	27 679
—	—	—	—	3	—	—	19	—	—	115
12	135	1	—	7	—	3	30	—	124	2 327
—	14	—	—	—	—	—	2	—	—	461
12	149	1	—	10	—	3	51	—	124	2 903
265	1 021	144	53	131	36	90	902	1 122	643	30 582

—	—	—	—	—	—	—	—	—	—	5 400
—	—	—	—	—	—	—	—	—	—	893
—	—	—	—	—	—	—	—	—	—	1 339
—	—	—	—	—	—	—	—	—	—	1 222
—	—	—	—	—	—	—	—	—	—	205
—	—	—	70	—	—	—	46	—	—	698
18	16	2	—	1	6	—	27	—	2	528
—	—	—	4	—	—	—	—	—	—	28
293	803	139	—	119	136	76	645	959	330	15 709
—	2	—	11	—	—	—	—	—	—	143
—	—	—	5	—	—	—	—	—	—	5
—	—	—	—	—	—	—	—	—	9	38
311	821	141	90	120	142	76	718	959	341	26 208
—	—	—	—	3	—	—	19	—	—	118
12	119	4	—	8	4	3	15	—	193	2 345
—	17	—	—	—	—	1	1	—	—	384
12	136	4	—	11	4	4	35	—	193	2 847
323	957	145	90	131	146	80	753	959	534	29 055



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	Gross credit and counterparty exposures by residual contractual maturity


At 31 March 2024	Up to three months	Three to six months	Six months to one year	One to five years	Five to 10 years	>10 years	Total
£’million	Up to three months	Three to six months	Six months to one year	One to five years	Five to 10 years	>10 years	Total
Cash and balances at central banks	5 662	—	—	—	—	—	5 662
Loans and advances to banks	671	—	5	—	—	—	676
Reverse repurchase agreements and cash collateral on securities borrowed	856	186	88	10	—	—	1 140
Sovereign debt securities	1 258	281	156	205	28	—	1 928
Bank debt securities	8	—	10	267	12	—	297
Other debt securities	8	—	16	54	306	324	708
Derivative financial instruments	69	30	70	149	35	5	358
Securities arising from trading activities	1	—	—	2	10	—	13
Loans and advances to customers	1 701	1 154	1 894	8 761	1 823	1 411	16 744
Other loans and advances	3	—	—	56	59	—	118
Other securitised assets	—	—	—	—	—	2	2
Other assets	33	—	—	—	—	—	33
Total on-balance sheet exposures	10 270	1 651	2 239	9 504	2 273	1 742	27 679
Guarantees	90	—	3	22	—	—	115
Committed facilities related to loans and advances to customers	93	197	296	1 356	371	14	2 327
Contingent liabilities, letters of credit and other	126	—	17	309	9	—	461
Total off-balance sheet exposures	309	197	316	1 687	380	14	2 903
Total gross credit and counterparty exposures	10 579	1 848	2 555	11 191	2 653	1 756	30 582



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60 . Additional credit and counterparty risk

information

Credit risk classification and provisioning policy

I FRS 9 requirements have been embedded into our Group credit

risk classification and provisioning policy. A framework has been

established to incorporate both quantitative and qualitative

measures.


	For further detail on our credit risk classification and provision policy please refer to pages 84 .

Internal credit rating models and ECL

methodology

Internal credit rating models cover all material asset classes.

These internal credit rating models are also used for IFRS 9

modelling after adjusting for key differences. Internal credit

models calculate through the economic cycle losses whereas

IFRS 9 requires 12-month or lifetime point-in-time losses based

on conditions at the reporting date and multiple economic

scenario forecasts of the future conditions over the expected

lives.


	Further information on internal credit ratings is provided on page 170 .


	Key judgements

The measurement of ECL has reliance on expert credit

judgement. Key judgemental areas are highlighted below and

are subject to robust governance processes. Key drivers of

measurement uncertainty include:

• The assessment of a significant increase in credit risk

• A range of forward-looking probability weighted macro-

economic scenarios

• Estimations of probabilities of default, loss given default and

exposures at default using models.


	For further detail on our process for determining ECL please refer to page 85 .

Key judgements at 31 March 2024

Key judgemental areas under IFRS 9 are subject to robust

governance processes. At 31 March 2024, the composition and

weightings of the forward-looking macro-economic scenarios

were revised to reflect the current pressures in the macro-

economic environment, however there remains reliance on

expert credit judgements to ensure that the overall level of ECL

is reasonable.

We hold a management overlay of £3.7 million at 31 March

2024 (31 March 2023: £4.9 million). The £1.2 million reduction in

the year reflects the enhanced performance of the models,

albeit there remains ongoing uncertainty in the macro-economic

environment. The overlay is apportioned to Stage 2 assets.

Macro-economic sensitivities

Changes in macro-economic scenarios and weightings may

result in the volatility of provisions, particularly to Stage 1 and 2

assets. Sensitivities to macro-economic scenarios and factors

form part of our overall risk monitoring, in particular the Bank’s

potential ECLs if each scenario were given a 100% weighting. In

these instances all non-modelled ECLs, including credit

assessed ECLs and other management judgements remain

unchanged.

The table below summarises the variance from reported ECL

should the base case and two downside cases be weighted by

100%. Whilst the outputs from these 100% weighted scenarios

are consistent with the macro-economic factor inputs set out in

the context of each scenario, in practice the outcome could

differ due to management actions or other key judgements

applied.


£’million At 31 March 2024	Change in reported ECL
£’million At 31 March 2024	Change in reported ECL
Base case (100%)	5.7
Downside 1 – inflation (100%)	(4.9)
Downside 2 – global stress (100%)	(22.0)



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Forward-looking macro-economic scenarios

The measurement of ECL also requires the use of multiple

economic scenarios to calculate a probability weighted

forward-looking estimate. These scenarios are updated at least

twice a year, or more frequently if there is a macro-economic

shock or significant shift in expectations. The weighting of

these scenarios for IFRS 9 as well as the scenarios themselves

are discussed and presented at the relevant BRCCs as well as

the relevant capital committees for approval, which form part of

the principal governance framework for macro-economic

scenarios. They are also approved by the relevant Audit

Committees.

A number of forecast economic scenarios are considered for

capital planning, stress testing (including Investec-specific

stress scenarios) and IFRS 9 ECL measurement.

For Investec plc, four macro-economic scenarios were used in

the measurement of ECL. These scenarios incorporate a base

case, an upside case and two downside cases.

As part of the annual scenario review and taking into account

the current macro-economic environment, adjustments have

been made to the composition of the downside scenarios. The

previous downside 1 – inflation scenario, capturing the risk of

persistent inflation and high policy interest rates has been

retained but updated. The downside 2- global shock has been

replaced with the downside 2 - global stress (cautious easing,

severe recession scenario). This new scenario is comparable in

terms of GDP shock. It has also been designed so that it can act

as a proxy for a number of evolving economic risks.

In addition to a reassessment of the macro-economic scenarios,

a review of the weightings for the new scenarios also took

place, to take into account the latest economic circumstances

and the associated risks to the outlook. The latest weightings

are as follows: 10% upside; 60% base case; 15% Downside 1 –

inflation; and 15% Downside 2 – global stress. The risks to

economic activity remain skewed to the downside, with the

weightings calibrated to consider the risk that inflation, whilst

having moderated from its peak, may remain elevated and

consequently so may interest rates for longer. The weightings

also take into account risks surrounding issues associated with

commercial real estate, China, geopolitics and protectionism,

among others.

In the base case, the UK economy is expected to recover from

the shallow recession seen across the second half of 2023. The

strengthening in activity is driven by the fading cost-of-living

crisis as inflation eases and a recovery in household real

incomes takes hold. Policy rate cuts are assumed to add further

support to the recovery. Given inflation is expected to return to

target in 2024, the BoE is predicted to cut interest rates, with

the bank rate anticipated to fall to 4.50% by the end of 2024

and to 3.25% at the end of 2025. As such UK economic growth

is expected to strengthen to 1.0% in 2024/2025 and to 2.0% in

2025/2026, whilst medium-term growth is assumed to return to

trend at 1.6%. Lower interest rates and strengthening economic

activity are also expected to lead to a recovery in UK real estate

markets. The global situation is anticipated to mirror that of the

UK, with a further moderation in inflation leading to an easing in

central bank policy rates and strengthening economic activity.

Downside 1 – inflation scenario assumes that inflation pressures

prove more sustained and protracted as wages rise to

compensate for higher prices, in turn adding to cost price

pressures for companies: thus, CPI inflation is expected to

average 4.1% across the scenario horizon. Central banks respond

by tightening policy further, with the bank rate assumed to rise to

5.75% and remaining at this level for an extended period of time.

This further tightening of monetary conditions triggers renewed

weakness in the economy, the UK backdrop being one of

economic stagnation, with annual GDP growth averaging -0.1%

across the five-year horizon.

Downside 2 – global stress (cautious easing, severe recession)

is a hypothetical scenario designed as a proxy for economic tail

risks. The scenario assumes a deep global economic downturn.

However, given residual inflation concerns, central banks are

more cautious to ease monetary policy than they were to

tighten it. In the UK interest rates are assumed to be cut from

5.25% to 2.00%. Consequently, the UK endures a material six-

quarter recession, with the cumulative fall in GDP totalling 4%.

Given the severity of the recession asset values undergo a

correction, with UK residential house prices falling 15%, whilst

the current downturn in commercial real estate is exacerbated,

values falling 18%.

The down case scenarios are severe but plausible

scenarios created based on Investec specific bottom-up

stress tests, whilst also considering IFRS 9 specific sensitivities

and non-linearity.

In the upside case, economic activity proves more resilient, and

the pace of recovery more robust as stronger confidence and

lower interest rates prompt a pickup in investment. Ultimately

through the scenario horizon, productivity growth is expected

to support stronger levels of growth. Accordingly medium-term

GDP growth averages 2% per annum. The relatively swift

rebound in activity is experienced globally, and monetary policy

normalizes gradually enough so as not to subdue growth.

The graph below shows the forecasted UK GDP under each

macro-economic scenario applied at 31 March 2024.

UK GDP Forecast


	£’billion


	Upside			Base case
	Upside			Base case
	Downside 1 – inflation			Downside 2 – global stress
	Downside 1 – inflation			Downside 2 – global stress



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The table that follows shows the key factors that form part of the UK and Other macro-economic scenarios and their relative

applied weightings.


	At 31 March 2024 average 2024 – 2029				At 31 March 2023 average 2023 – 2028
Macro-economic scenarios	Upside	Base case	Downside 1 inflation	Downside 2 global stress	Upside	Base case	Downside 1 inflation	Downside 2 global shock
Macro-economic scenarios	%	%	%	%	%	%	%	%
UK
GDP growth	1.9	1.6	(0.1)	0.2	1.9	1.2	(0.2)	0.2
Unemployment rate	3.5	4.4	5.5	6.5	3.6	4.6	5.4	6.8
CPI inflation	1.9	2.0	4.1	2.4	2.5	2.2	5.8	2.1
House price growth	3.0	2.5	(0.6)	(1.6)	2.1	0.5	(1.7)	(4.6)
BoE – Bank rate (end year)	3.1	3.2	5.4	2.5	2.8	2.8	4.5	1.0
Euro area
GDP growth	1.9	1.5	0.4	0.3	2.1	1.4	0.1	0.2
US
GDP growth	2.5	1.9	0.7	0.8	2.6	1.5	0.6	0.5
Scenario weightings	10	60	15	15	10	50	20	20

The following table shows annual averages of economic factors for the base case over a five-year period based on the economic

forecasts in place as at 31 March 2024.


Base case %	Financial years
Base case %	2024/2025	2025/2026	2026/2027	2027/2028	2028/2029
UK
GDP growth	1.0	2.0	1.6	1.6	1.6
Unemployment rate	4.6	4.4	4.4	4.3	4.3
CPI inflation	1.7	2.1	2.0	2.0	2.0
House price growth	1.9	3.4	2.5	2.4	2.4
BoE – Bank rate (end year)	4.0	3.0	3.0	3.0	3.0
Euro area
GDP growth	1.0	1.6	1.5	1.6	1.6
US
GDP growth	1.6	1.8	1.9	2.1	2.3

The following table outlines the extreme point forecast for each economic factor across the scenarios as at 31 March 2024.

Baseline represents the five-year base case average. Upside scenario values represent the best outcomes, namely the highest

quarterly level of GDP, house price growth (year on year), lowest level of unemployment and Bank rate. Upside scenario value

for CPI inflation is represented by the five-year average. Downside scenario values represent the worst outcomes being lowest

quarterly level of GDP, house price growth (year on year). For Bank rate and CPI inflation the most extreme point is listed, the

highest level reflective in downside 1 – inflation scenario and the lowest in downside 2 - global stress scenario.


Five-year extreme points At 31 March 2024	Upside	Baseline: Base case five-year average	Downside 1 inflation	Downside 2 global stress
Five-year extreme points At 31 March 2024	%	%	%	%
UK
GDP growth	2.5	1.6	(1.5)	(3.6)
Unemployment rate	3.5	4.4	5.8	7.9
CPI inflation	1.9	2.0	4.5	2.0
House price growth	4.7	2.5	(3.7)	(11.0)
BoE – Bank rate (end year)	3.0	3.2	5.8	2.0
Euro area
GDP growth	2.1	1.5	(0.5)	(3.0)
US
GDP growth	3.0	1.9	(0.3)	(4.0)



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61 . Sustainability risk (including climate and ESG)

Investec’s sustainability strategy aligns with

two impact UN Sustainable Development

Goals: climate action (SDG 13) and reduced

inequalities (SDG 10), supported by six

other core SDGs, namely:

• Quality education (SDG 4)

• Clean water and sanitation (SDG 6)

• Affordable and clean energy (SDG 7)

• Decent work and economic growth

(SDG 8)

• Industry innovation and infrastructure

(SDG 9)

• Sustainable cities and communities

(SDG 11).

The Investec Group ESG Executive

Committee, mandated by the Investec

Group’s Executive Directors, reports any

relevant matters to DLC SEC and

Investec Group ERC. The main objectives

of the committee are to align and

integrate sustainability activities across

the organisation while focusing on the

many business opportunities within

Investec’s priority SDGs and escalating

significant matters for consideration by

the Investec Group's respective

committees and leaders. The committee

provides feedback to the business on

emerging sustainability issues while

identifying and communicating to the

relevant forums any relevant external

issues that could adversely affect the

organisation's reputation.

We use different tools and frameworks to

measure the ESG performance and impact

of our clients and transactions, such as the

Equator Principles, Partnership for Carbon

Accounting Financials (PCAF), the UN

Global Compact, the UN Guiding Principles

on Business and Human Rights, and the

OECD Guidelines for Multinational

Enterprises.

We aim to embed sustainability

considerations in our daily operations and

credit decision-making processes. We

also recognise the interconnection

between climate change and nature loss,

and the exposure of our business and

operational activities to various types

of climate and nature-related risks. We

adopt a precautionary approach towards

managing climate and nature-related risks

in our decision-making processes.

We expect our clients to adopt and follow

best practices and standards on ESG

issues and to report their ESG

performance and impact. We also track

and disclose our ESG due diligence

activities and outcomes to our

stakeholders and regulators. This stems

from the belief that one of the greatest

socio-economic and environmental

impacts we can have is to partner

with our clients and stakeholders to

accelerate a cleaner, more resilient

and inclusive world.

With regards to climate action

(SDG 13):

Our climate change statement takes into

account our commitment to a net-zero

carbon economy by 2050. In addition, our

biodiversity statement strengthens our

commitment to protecting our natural

environment. In addition, the Investec

Group makes a positive impact on

biodiversity through our environmental

philanthropy activities and reduces

negative effects by addressing financial

crimes related to illegal wildlife trade.

In principle:

• We are committed to integrating

climate change and nature-related risk

considerations into our day-to-day

operations and in our lending and

investment decisions

• We have a number of Investec Group

environmental policies that also guide

credit decision-making from a

sustainability and ESG perspective

• We support the key provisions of the

Equator Principles (EP). All transactions

in non-designated countries are EP

monitored and compliant

• We will not engage in activities that

negatively impact conservation areas

or have an irreversible negative impact

on the environment, indigenous people

or natural assets.

Our approach to net-zero

We support the Paris Agreement aims of

holding the increase in global average

temperature to well below 2°C above pre-

industrial levels and continue to pursue

efforts towards limiting it to 1.5°C.

Within our own operations

We embrace our responsibility to

understand and manage our own carbon

footprint. We upheld our commitment and

maintained carbon neutrality in our direct

operational carbon emissions status for the

sixth financial year by sourcing 100% of our

Scope 2 energy consumption from

renewable energy through the purchase of

Renewable Energy Certificates and

offsetting the remaining unavoidable

residual emissions of 89% at 31 March

2024 (31 March 2023: 85%) through the

purchase of verified and high-quality

carbon credits.

Within our lending and investment

activities

We acknowledge that the widest and most

impactful influence we can have

is to manage and reduce our carbon

emissions in the business we conduct

and more specifically in our lending and

investing portfolios (Scope 3-financed

activities). As such, we are members of the

Net-Zero Banking Alliance (NZBA)

and continue to work with the PCAF to

measure our financed emissions. In 2021

we established a base line towards a net-

zero path and will continue to refine our

assumptions around Scope 3 emissions.

Our net-zero strategy is built on three pillars:

• Phase out of coal exposures in the

Group by 31 March 2027

• Increase investment in sustainable

and transition finance

• Reducing Scope 3 financed emissions

through influencing and engaging with

our clients on their net-zero pathways.

This year we have invested in the

automation of Scope 3 financed emissions

calculations, enhanced our data collection

efforts and refined our assumptions around

Scope 3 emissions. We continue to build

capacity within our various businesses to

support our clients and stakeholders to

move as quickly and smoothly as possible

towards a zero carbon economy.

With regards to reducing

inequalities (SDG 10):

The Group is dedicated to fostering a

purposeful, inclusive culture and we

enable this through our workplace and

Investec experience.

Furthermore, we understand no single

business can address the many socio-

economic needs and so our focus is on

education and learnerships,

entrepreneurship and job creation,

environment and philanthropy.

In principle:

• We are committed to encouraging

a sense of belonging for all people,

irrespective of difference

• We are committed to focusing on

creating education and learnership

opportunities within our communities

• We are committed to creating jobs for

young people through quality work

experience placements.

Within our own operations

• At 31 March 2024 we had 58%

representation of women and 42%

ethnic diversity, as defined by the UK

listing rule, on the DLC board

• Our community initiatives serve as the

cornerstone of our commitment to

creating enduring worth. This

reinforces our overarching goal of

fostering corporate responsibility.



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Within our lending and investment activities

We support a number of internationally recognised principles,

guidelines and voluntary standards which reflect our commitment

to respecting human rights, building inclusive communities and

supporting activities that reduce inequality. In principle we will

not engage in activities:

• that do not respect human rights, and do not respect the

rights of local communities and indigenous peoples

• that are in non-compliance with minimum standards for

occupational health and safety and the relevant local

legislation

• Investec places significant importance on addressing modern

slavery according to the UK Modern Slavery Act 2015. This

extends to reviewing third parties' policies on this matter in

our due diligence questionnaire. The Investec Group

sustainability team carefully evaluates these questionnaires

and escalates any potential concerns.

Climate and nature-related financial disclosures

Investec has published a separate climate and nature-related

report that aligns with the Financial Stability Board’s Taskforce

on Climate-related Financial Disclosures (TCFD)

recommendations. The TCFD report also includes some

recommendations of the Taskforce on Nature-related Financial

Disclosures (TNFD). As our knowledge and the recommended

guidance on TNFD matures, we aim to enhance these

disclosures over time. The table below illustrates a summary of

progress in terms of the recommendations according to the

TCFD and TNFD.


	Refer to detailed information in the Investec Group’s 2024 climate and nature-related disclosures which are published and available on our website: www.investec.com


	Governance	Strategy	Risk management	Metrics
Achievements in prior years	• Established an Investec Group ESG Executive Committee to align and monitor the Investec Group’s climate action • Engaged with stakeholders on our disclosures to get feedback on how we can improve our governance and oversight • Became a member of the NZBA.	• Acknowledged the Paris Agreement’s aim of holding the increase in the global average temperature to well below 2°C compared to pre-industrial levels and of pursuing efforts towards limiting it to 1.5°C • Supported the Partnership for Biodiversity Accounting Financials (PBAF) • Launched a number of ESG and climate-specific products and services.	• Strengthened our climate focus in the Investec plc and IBP risk appetite assessment resulting in a net-zero aligned target set towards zero coal exposure by 31 March 2027 • Reviewed and updated our fossil fuel policy with the primary change being managing our thermal coal exposure to zero by 31 March 2030 for the Investec Group.	• Achieved carbon neutrality across our direct operational activities • Joined PCAF and measured our Scope 3 emissions within our lending and investing activities • Assessed net-zero pathways according to Science Based Targets Initiative (SBTi) guidance. .
Achievements for the financial year ended March 2024	• External sustainability training completed by four members of the Investec Group Executive Team including our Investec Group CE • Activated a focused learning pathway for management and staff, targeted towards their unique requirements within their respective areas • Listened to and engaged with our stakeholders through conducting a double materiality assessment.	• Enhanced our sustainable finance framework to include transition and social finance • Investec plc incorporated climate risks and opportunities in their financial planning through the annual budget process.	• Reviewed developments with regards to climate-related disclosure guidance, specifically the recommendations relating to IFRS S1 and IFRS S2 • Updated our fossil fuel policy with a target of no new financing for oil and gas exploration, extraction or production projects directly, regardless of jurisdiction, from 1 January 2035 • Identified and disclosed material sustainability-related matters as a result of our double materiality assessment.	• Automated our Scope 3 financed emission calculations and continued to refine our assumptions • Engaged with SBTi on their recommendations for Financial Institutions with the aim of setting verified climate-related targets.
Looking forward	• Link Executive remuneration to updated sustainability-related KPIs including a climate focused KPI • Stronger focus on ESG and sustainability (including climate and nature-related) matters in the DLC BRCC and DLC Audit Committee • Continue to strengthen the Investec Group’s climate-related and sustainability disclosures.	• Promote sustainable products and solutions within our client ecosystem • Support transition finance within our high-emitting client ecosystem where applicable • Active engagement within our client ecosystem promoting sustainability agendas • Review and assess the integration of climate-related matters into business strategy.	• Enhanced screening on biodiversity and nature-related risks according to the TNFD recommendations • Embed monitoring and managing of Scope 3 emissions within the risk management process across our business • Enhanced sustainability disclosures.	• Set a sustainable finance target • Track clients who publicly disclose their net-zero pathways to achieve a clear aggregated downward trend of emissions towards net-zero by 2050.



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	62 . Investment risk in the banking book

Investment risk in the banking book

comprises 1.6% of total assets at 31

March 2024 . We have refocused our

principal investment activities on clients

where we have and can build a broader

relationship through other areas of

activity in the Group.

We partner with management and other

co-investors by bringing capital raising

expertise, working capital management,

merger and acquisition and investment

experience into client-driven private

equity transactions as well as leveraging

third party capital into the Group’s funds

that are relevant to the Group’s client

base. Investments are selected based on:

• The track record and credibility of

management

• Attractiveness of the industry and the

positioning therein

• Valuation/pricing fundamentals

• Sustainability analyses

• Exit possibilities and timing thereof

• The ability to build value by

implementing an agreed strategy.

Investments in listed shares may arise on

an IPO, or sale of an investment to a

listed company. There is limited appetite

for listed investments.

Additionally, from time to time, the

manner in which certain lending

transactions are structured results

in equity, warrants or profit shares

being held, predominantly in unlisted

companies. We also source development,

investment and trading opportunities to

create value within agreed risk

parameters.

Following the distribution that took place

on 31 May 2022, Investec plc retains a

c.10% shareholding in Ninety One.

Management of investment risk

As investment risk arises from a variety of

activities conducted by the Group, the

monitoring and measurement thereof

varies across transactions and/or type of

activity.

Investment committees exist in the UK

which provide oversight of the regions

where we assume investment risk.

Risk appetite targets and limits are set to

manage our exposure to equity and

investment risk. An assessment of

exposures against limits and targets is

reported to IBP and DLC BRCCs.

As a matter of course, concentration risk

is avoided and investments are spread

across geographies and industries.

Valuation and sensitivity

assumptions and accounting

methodologies


	For a description of our valuation principles and methodologies refer to pages 83 to 89 and pages 112 to 119 for factors and sensitivities taken into consideration in determining fair value.


	An analysis of income and revaluations of these investments can be found in the investment income note on page 95 .

Summary of investments


£’million	On-balance sheet value of investments 31 March 2024	On-balance sheet value of investments 31 March 2023
Category	On-balance sheet value of investments 31 March 2024	On-balance sheet value of investments 31 March 2023
Unlisted investments	246	315
Listed equities	1	2
Ninety One	159	172
Total investment portfolio	406	489
Trading properties	63	75
Warrants and profit shares	4	5
Total	473	569

Note: IW&I UK was previously 100% consolidated in the Group. Going forward the Group's investment in Rathbones will be equity accounted for on a statutory basis and

recognised as an associate. We do not include the investment in Rathbones Group plc as a part of the above analysis due to the nature of this strategic transaction. Please

refer to further detail on page 7

An analysis of the investment portfolio (excluding Ninety One), warrants and profit shares

31 March 2024

£251 million


	Finance and insurance	48.1%
	Retailers and wholesalers	10.6%
	Transport	9.8%
	Real estate	9.7%
	Business services	8.4%
	Construction	5.7%
	Other	5.4%
	Communication	2.3%



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	63 . Securitisation/ structured credit activities exposures

Overview

The Group’s definition of securitisation/

structured credit activities is wider than

the definition applied for regulatory

capital purposes. The regulatory capital

definition focuses largely on positions we

hold in an investor capacity and includes

securitisation positions we have retained

in transactions in which the Group has

achieved significant risk transfer. We

believe, however, that the information

provided below is meaningful in that it

groups all these related activities in order

for a reviewer to obtain a full picture of

the activities that we have conducted

in this space. Some of the information

provided below overlaps with the Group’s

credit and counterparty exposure

information.

In the UK, capital requirements for

securitisation positions are calculated

using either the standardised approach

(SEC-SA) or the external ratings-based

approach (SEC-ERBA). Given risk-

weightings under the SEC-SA approach

do not rely on external ratings, a

breakdown by risk-weight has also been

provided in the analysis below.

Securitisation transactions provide the

bank with a cost-effective, alternative

source of financing either through sale

to the market or through use of the notes

issued as collateral for other funding

mechanisms.

We hold rated structured credit

instruments. These are UK, US and

European exposures and amounted

to £703 million at 31 March 2024

(31 March 2023: £650 million) with 99.9%

being AAA and AA rated. Of the total

structured credit exposures, 99.7% have

a risk weighting of less than 40%.


	For accounting methodologies refer to page 86 .

Risk management

All existing or proposed exposures to a

securitisation are analysed on a case-by-

case basis, with approval required from

the appropriate credit committee. The

analysis looks through to the historical

and expected future performance of the

underlying assets, the position of the

relevant tranche in the capital structure

as well as analysis of the cash flow

waterfall under a variety of stress

scenarios. External ratings and risk-

weightings are presented, but only for

information purposes since the Group

principally relies on its own internal risk

assessment. Overarching these

transaction level principles is the Board-

approved risk appetite policy, which

details the Group’s appetite for such

exposures, and each exposure is

considered relative to the Group’s

overall risk appetite. We can use explicit

credit risk mitigation techniques where

required; however, the Group prefers

to address and manage these risks

by approving exposures for which

the Group has explicit appetite through

the consistent application of the risk

appetite policy.


	In addition, securitisations of Investec own originated assets are assessed in terms of the credit risk management philosophies and principles as set out above.

Credit analysis

In terms of our analysis of our credit and

counterparty risk, exposures arising from

securitisation/structured credit activities

reflect only those exposures to which we

consider ourselves to be at risk.


Nature of exposure/activity	31 March 2024 £’million	31 March 2023 £’million	Balance sheet and credit risk classification
Structured credit (gross exposure)	738	715	Other debt securities and other loans and advances
<40% RWA	736	709
>40% RWA	2	6

Analysis of gross structured credit exposure


£’million	AAA	AA	A	BBB	BB	B and below	Total rated	Total unrated	Total
US corporate loans	495	81	—	—	—	—	576	34	610
UK RMBS	36	14	1	—	—	—	51	1	52
European corporate loans	76	—	—	—	—	—	76	—	76
Total at 31 March 2024	607	95	1	—	—	—	703	35	738
<40% RWA	607	95	—	—	—	—	702	34	736
>40% RWA	—	—	1	—	—	—	1	1	2
Total at 31 March 2023	564	78	8	—	—	—	650	65	715



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64 . Market risk in the

trading book

Traded market risk profile

The focus of our trading activities is

primarily to support our clients. Our

strategic intent is that proprietary trading

should be limited and that trading should

be conducted largely to facilitate client

flow. Within our trading activities, we act

as principal with clients or the market.

Market risk exists where we have taken

on principal positions resulting from

market making, underwriting and

facilitation of client business in the

foreign exchange, interest rate, equity,

credit and commodity markets.


	Traded market risk year in review

In the UK, the financial year in review has

been characterised by continued central

bank tightening, with associated macro-

driven market fluctuations. Global yield

curves are considerably higher than as at

31 March 2023 and remain inverted.

Inflation has fallen significantly over the

year, with markets pricing in interest rate

cuts over the second half of the calendar

year. Equity markets recovered over the

second half of the financial year, with the

FTSE100 +4.2% and FTSE250 +5.1% for

the year ended 31 March 2024. The

structured products book continues to

wind down and is now substantially

reduced. Notwithstanding, the macro

hedge remains in place and continues to

be updated to ensure that it continues to

provide downside protection in the event

of an extreme market dislocation.

The primary focus of all trading activity

continues to be managing and hedging

the market risk arising from client-related

activity, and directional exposures remain

at a minimum. Utilisation of risk limits

have remained moderate, and the desks

have remained prudent during the year.

Traded market risk

governance structure

Traded market risk is governed by

policies that cover the management,

identification, measurement and

monitoring of market risk. We have

independent market risk teams to

identify, measure, monitor and manage

market risk.

The market risk teams have reporting

lines that are separate from the trading

function, thereby ensuring independent

oversight. The Market Risk Forum,

mandated by the IBP ERC, manages

market risk in accordance with approved

principles, policies and risk appetite.

Trading desk risk limits are reviewed by

the Market Risk Forum and approved by

IBP ERC in accordance with the risk

appetite defined by the Board. Any

significant changes in risk limits are then

taken to Investec Group ERC, IBP and

DLC BRCCs as well as IBP and DLC

Boards for review and approval. The

appropriateness of limits is continually

reassessed, with limits reviewed at least

annually, in the event of a significant

market event or at the discretion of

senior management.

Measurement of traded

market risk

A number of quantitative measures are

used to monitor and limit exposure to

traded market risk. These measures

include:

• Value at Risk (VaR) and Expected

Shortfall (ES) as portfolio measures

of market risk exposure

• Scenario analysis, stress tests and

tools based on extreme value theory

(EVT) that measure the potential

impact on portfolio values of extreme

moves in markets

• Sensitivity analysis that measures the

impact of individual market risk factor

movements on specific instruments or

portfolios, including interest rates,

foreign exchange rates, equity prices,

credit spreads and commodity prices.

We use sensitivity measures to monitor

and limit exposure across portfolios,

products and risk types.

Stress and scenario analyses are used

to add insight into the possible outcomes

under severe market disruptions. The

stress testing methodology assumes that

all market factors move adversely at the

same time and that no actions are taken

during the stress events to mitigate risk.

Stress scenarios based on historical

experience as well as hypothetical

scenarios are considered and are

reviewed regularly for relevance in the

ever-changing market environment.

Stress scenarios are run daily with

analysis presented to IBP Review

Executive Risk Review Forum (IBP Review

ERRF) weekly and IBP BRCC when the

committees meet or more often should

market conditions require this.


	Traded market risk management, monitoring and control

Market risk limits are set according to our

risk appetite policy. Limits are set at

trading desk level with aggregate risk

across all desks also monitored against

overall market risk appetite limits. Current

market conditions as well as stressed

market conditions are taken into account

when setting and reviewing these limits.

Market risk teams review the market risks

in the trading book with detailed risk

reports produced daily for each trading

desk and for the aggregate risk of the

trading book. The material risks identified

are summarised in daily reports that are

distributed to, and discussed with senior

management when required. The

production of risk reports allows for the

monitoring of all positions in the trading

book against prescribed limits.

Documented policies and procedures are

in place to ensure there is a formal

process for recognition and authorisation

for risk excesses incurred.

The risk management software is fully

integrated with source trading systems,

allowing valuation in risk and trading

systems to be fully aligned. All valuation

models are subject to independent

validation by market risk ensuring models

used for valuation and risk are validated

independently of the front office.



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Value at Risk

VaR is a technique that estimates the

potential losses as a result of movements

in market rates and prices over a

specified time horizon at a given level of

confidence. The VaR model derives

future scenarios from a historic time

series of market rates and prices, taking

into account inter-relationships between

the different markets such as interest

rates and foreign exchange rates. The

VaR model is based on a full revaluation

historical simulation and incorporates the

following features:

• Two-year historical period based

on an unweighted time series

• Daily movements in each risk factor

e.g. foreign exchange rates, interest

rates, equity prices, credit spreads and

associated volatilities are simulated

with reference to historical market

rates and prices, with proxies only

used when no or limited historical

market data is available

• Risk factor movements are based

on both absolute and relative returns

as appropriate for the different types

of risk factors.

VaR numbers using a one-day holding

period are monitored daily at the 95%

and 99% confidence intervals, with limits

set at the 95% confidence interval.

Expected shortfalls are also monitored

daily at the 95% and 99% levels, being

the average of the losses in the tail of

the VaR distribution.

The table below contains the 95% one-day VaR figures for the trading businesses.


	31 March 2024				31 March 2023
95% one-day VaR	Year end	Average	High	Low	Year end	Average	High	Low
£’000	Year end	Average	High	Low	Year end	Average	High	Low
Interest rates	43	45	60	31	43	33	73	15
Foreign exchange	12	10	98	—	8	13	76	3
Equities	173	225	641	117	295	324	762	124
Commodities	8	9	15	5	—	—	—	—
Credit	36	32	85	—	64	14	67	1
Consolidated*	186	238	612	137	352	331	770	103

*The consolidated VaR is lower than the sum of the individual VaRs. This arises from the correlation offset between various asset classes (diversification).

Expected shortfall

The ES measure overcomes some of VaR’s shortcomings. ES seeks to quantify losses encountered in the tail beyond the VaR level.

The 95% one-day ES is the average loss given that the 95% one-day VaR level has been exceeded. The table below contains the

95% one-day ES figures.


95% one-day ES	31 March 2024	31 March 2023
£’000	31 March 2024	31 March 2023
Interest rates	59	68
Foreign exchange	29	15
Equities	210	366
Commodities	13	—
Credit	48	163
Consolidated*	224	472

*The consolidated ES is lower than the sum of the individual ESs. This arises from the correlation offset between various asset classes.

Stressed VaR

Stressed VaR (sVaR) is calculated using the VaR model but is based on a one-year period through which the relevant market

factors experienced stress. The information in the table below contains the 99% one-day sVaR.


£’000	31 March 2024	31 March 2023
99% one-day sVaR	694	672



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	Backtesting

The performance of the VaR model is regularly monitored through backtesting. This is done by comparing daily clean profit and

loss against one-day VaR based on a 99% confidence level. Clean profit and loss excludes items such as intra-day transactions,

valuation adjustments, provisions, recoveries, commission, fees and hedge costs included in the new trade revenue. If a loss

exceeds the one-day VaR, a backtesting exception is considered to have occurred. Over time we expect the average rate

of observed backtesting exceptions to be consistent with the percentile of the VaR statistic being tested. This is conducted

at an aggregate and desk level on a daily basis.

The graph that follows shows the result of backtesting the total daily 99% one-day VaR against the clean profit and loss data

for our trading activities over the reporting period. Based on these graphs, we can gauge the accuracy of the VaR figures,

i.e. 99% of the time, losses are not expected to exceed the 99% one-day VaR.

The average VaR for the year ended 31 March 2024 was lower than for the year ended 31 March 2023 . Using clean profit

and loss data for backtesting resulted in one exception over the period at the 99% confidence level, i.e. where the loss was

greater than the 99% one-day VaR. This reflects the limited net market risk exposure in the trading book and the relatively low

equity market volatility over the reporting period.


99% one-day VaR backtesting (£)


	99% one-day VaR			Clean P/L



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	Clean profit and loss histogram

The histogram below illustrates the distribution of clean profit and loss during the financial year for our trading businesses. The

graph shows that a clean profit was realised on 153 days out of a total of 250 days in the trading business. The average daily clean

profit and loss generated for the year to 31 March 2024 was £70 355 (31 March 2023 : £87 798 ).

Clean profit and loss

Frequency: Days in the year


	Clean profit/(loss) earned per day (£’million)


	Market risk – derivatives

The Group enters into various derivative contracts, largely on the back of customer flow. These are used for hedging foreign

exchange, interest rates, commodity, equity and credit exposures and to a small extent as principal for trading purposes. Traded

instruments include financial futures, options, swaps and forward rate agreements.


	Information showing our derivative trading portfolio over the reporting period on the basis of the notional principal and the fair value of all derivatives can be found on page 126 .

The notional principal indicates our activity in the derivatives market and represents the aggregate size of total outstanding

contracts at year end. The fair value of a derivative financial instrument represents the present value of the positive or negative

cash flows which would have occurred had we closed out the rights and obligations arising from that instrument in an orderly

market transaction at year end. Both these amounts reflect only derivatives exposure and exclude the value of the physical

financial instruments used to hedge these positions.



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	65. Balance sheet risk management

The balance sheet risk framework

continually ensures that a comprehensive

approach is taken to the management

and mitigation of liquidity, funding and

IRRBB risks, while ensuring adherence to

regulatory requirements and internal risk

appetite and policies.

Balance sheet risk governance

structure and risk mitigation

Investec plc (and its subsidiaries,

including IBP) are ring-fenced from

Investec Limited (and its subsidiaries),

and vice versa. Both legal entities (and

their subsidiaries) are therefore required

to be self-funded, and manage their

funding, liquidity and IRRBB risk as

separate entities.

Each banking entity must have its own

Board-approved balance sheet risk

management policies. Risk appetite limits

are set at the relevant Board level and

reviewed at least on an annual basis. The

size, materiality, complexity, maturity and

depth of the market as well as access to

stable funds are all inputs considered

when establishing the risk appetite for

each relevant region. Specific regulatory

requirements may further dictate additional

restrictions to be adopted in a region.

Under delegated authority of the

respective Boards, the Group has

established ALCOs within each banking

entity, using regional expertise and local

market access as appropriate. The ALCOs

are mandated to ensure independent

oversight of liquidity risk and IRRBB.

ALCOs review the exposures within the

balance sheet together with market

conditions, and decide on strategies to

mitigate any undesirable risk. The

Treasury function within each banking

entity is mandated to holistically manage

the risk on a day-to-day basis.

The Treasury function, by banking entity,

is required to exercise tight control of all

balance sheet risks (liquidity, funding,

concentration, encumbrance and IRRBB)

within the Board-approved risk appetite

limits. IRRBB and asset funding requirements

are transferred from the originating

business to the Treasury function.

The Treasury function, by banking entity,

directs pricing for all deposit products,

establishes and maintains access to

stable funds with the appropriate tenor

and pricing characteristics, and manages

liquid securities and collateral.

Balance sheet risk management is based

within Group risk management and is

responsible for identifying, quantifying,

monitoring and communicating risks

while providing independent oversight of

the treasury activities and guaranteeing

the adherence to the Group’s policies.

There is a regular internal audit of the

processes and policies within the balance

sheet risk management function, the

frequency of which is determined by

internal audit.

Daily, weekly and monthly reports are

independently produced highlighting

Group activity, exposures and key

measures against thresholds and limits

and are distributed to management,

ALCO, Treasury, IBP Review ERRF, IBP

ERC , IBP BRCC, and DLC BRCC as well as

summarised reports for Board meetings.

Liquidity risk

Management and measurement of

liquidity risk

Cohesive liquidity management is vital

for protecting our depositors, preserving

market confidence, safeguarding our

reputation and ensuring sustainable

growth with established funding sources.

Through active liquidity management,

we seek to preserve stable, reliable and

cost-effective sources of funding.

A number of internal and regulatory

metrics are used on a current and

forward-looking basis to manage liquidity

risk and funding risk. Future cash flows are

monitored on a contractual, business-as-

usual and stressed basis. Stress testing is

based on a range of historical and

hypothetical scenarios.

We further carry out reverse stress tests

to identify business model vulnerabilities

which tests ‘tail risks’ that can be missed

in normal stress tests.

Additionally, the Group maintains

contingency funding plans which detail

the course of actions that can be taken in

the event of a liquidity stress. The plans

help to ensure that cash flow estimates

and commitments can be met in the

event of general market disruption or

adverse bank-specific events, while

minimising detrimental long-term

implications for the business.

The plan have been tested within our

core jurisdictions via an externally

facilitated liquidity crisis simulation

exercise which assess the Group's

sustainability and ability to adequately

contain a liquidity stress.


	Further information on recovery and resolution planning can be found on page 199 .

Funding strategy

We maintain a funding structure of stable

customer deposits and long-term

wholesale funding well in excess of

funded assets. We target a diversified

funding base, avoiding undue concentrations

by investor type, maturity, market source,

instrument and currency.

We acknowledge the importance of our

retail deposit client base as the principal

source of stable and granular funding. We

continue to develop products to attract

and service the investment needs of our

client base in line with our risk appetite.

Entities within the Group actively

participate in global financial markets and

our relationships are continuously

enhanced through regular investor

presentations internationally. Entities are

only allowed to have funding exposure to

wholesale markets where they can

demonstrate that the market is sufficiently

deep and liquid, and then only relative to

the size and complexity of their business

as part of a diversified funding mix.

The Group’s ability to access funding at

cost-effective levels is influenced by

maintaining or improving the entity’s

credit rating. A reduction in credit ratings

could have an adverse effect on the

Group’s funding costs, and on access to

wholesale term funding; however, our

diversified funding base places limited

reliance on wholesale funding and

protects our ability to raise sufficient

funding under both business as usual and

stressed market conditions.

Liquidity buffer

To protect against potential shocks, we

hold a liquidity buffer in the form of cash,

unencumbered high-quality liquid assets

(typically in the form of government or

rated securities eligible for repurchase with

the central bank). The liquidity buffer is well

in excess of regulatory requirements as

protection against disruptions in cash

flows. The liquidity buffer is managed

within Board-approved targets. The Group

remains a net liquidity provider to the

interbank market, placing significantly

more funds with other banks than our

short-term interbank borrowings. We do

not rely on overnight interbank deposits to

fund term lending.

For non-cash items, prudent market risk

limits are in place to control the market

volatility of securities and the amount of

cash that can be generated by those

securities under a market stress.

From 1 April 2023 to 31 March 2024

average cash and near cash balances

over the period amounted to £8.7 billion.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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192

Cash and near cash trend

£’million


	Central bank cash placements and guaranteed liquidity			Cash			Near cash (other ‘monetisable’ assets)


An analysis of cash and near cash at 31 March 2024		Customers accounts (deposits) by type at 31 March 2024
£9 652 million		£20 791 million


Central bank cash placements and guaranteed liquidity	83.5%	Individuals	65.3%
Cash	10.7%	Other financial institutions and corporates	26.9%
Near cash (other ‘monetisable’ assets)	5.8%	Small business	7.8%

Asset encumbrance

An asset is defined as encumbered if it has been pledged as

collateral against an existing liability and, as a result, is no longer

available to the Group to secure funding, satisfy collateral needs

or be sold to reduce funding requirement.

Encumbered assets are identified in accordance with the

definitions under European Capital Requirements Regulation

(CRR), and regular reporting is provided to the PRA.

Risk management monitors and manages total balance sheet

encumbrance within a Board-approved risk appetite limit. Asset

encumbrance is one of the factors considered in the discussion of

new products or new funding structures, and the impact on risk

appetite is assessed.

The Group uses secured transactions to manage short-term cash

and collateral needs, and utilises securitisations in order to raise

external term funding as part of its diversified liability base.

Securitisation notes issued are also retained by the Group which

are eligible for the BoE’s Single Collateral Pool to support central

bank liquidity facilities.

Further disclosures on encumbered and unencumbered assets

can be found within the Investec plc Pillar 3 document.


	On page 124 we disclose further details of assets that have been received as collateral under reverse repurchase agreements and securities borrowing transactions where the assets are allowed to be resold or pledged.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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193

Liquidity mismatch

The following tables show the

contractual and behavioural liquidity

mismatch.

The contractual liquidity table records all

assets and liabilities with the underlying

contractual maturity.

With respect to the behavioural liquidity

table, we adjust the contractual profile of

certain assets and liabilities:

• Liquidity buffer: the actual contractual

profile of the assets in the liquidity

buffer is of little consequence, as

practically the Group would meet any

unexpected net cash outflows by

repo’ing or selling these highly liquid

securities. Consequently, for the

liquidity buffer:

– The time horizon to monetise our

regulatory liquid assets which are

guaranteed by the central bank has

been adjusted to ‘on demand’

– The time horizon for the cash and

near cash portfolio of discretionary

treasury assets has been set to one

month where there are deep

secondary markets for this elective

asset class.

• Customer deposits: historical

observations were used to model the

behavioural maturity profile, and this

analysis has identified significant

additional sources of structural liquidity

in the form of core deposits that exhibit

stable behaviour.

Contractual liquidity at 31 March 2024


£’million	Demand	Up to one month	One to three months	Three to six months	Six months to one year	One to five years	>Five years	Total
Cash and short-term funds – banks	6 279	54	—	—	5	—	—	6 338
Investment/trading assets	1 564	869	883	481	329	736	1 068	5 930
Securitised assets	4	—	—	1	1	21	40	67
Advances	90	657	912	1 156	1 857	8 723	3 293	16 688
Other assets	48	398	22	17	111	352	90	1 038
Assets	7 985	1 978	1 817	1 655	2 303	9 832	4 491	30 061
Deposits – banks	(242)	—	(10)	(9)	—	(1 913)	—	(2 174)
Deposits – non-banks	(6 113)	(1 121)	(4 660)	(3 211)	(3 860)	(1 826)	—	(20 791)
Negotiable paper	(2)	(6)	(10)	(34)	(63)	(1 149)	(9)	(1 273)
Securitised liabilities	—	—	(7)	(3)	(6)	(36)	(20)	(72)
Investment/trading liabilities	(79)	(55)	(30)	(37)	(75)	(244)	(56)	(576)
Subordinated liabilities	—	—	—	—	—	—	(669)	(669)
Other liabilities	(4)	(465)	(143)	(20)	(122)	(216)	(64)	(1 034)
Liabilities	(6 440)	(1 647)	(4 860)	(3 314)	(4 126)	(5 384)	(818)	(26 589)
Total equity	—	—	—	—	—	—	(3 472)	(3 472)
Contractual liquidity gap	1 545	331	(3 043)	(1 659)	(1 823)	4 448	201	—
Cumulative liquidity gap	1 545	1 876	(1 167)	(2 826)	(4 649)	(201)	—

Behavioural liquidity at 31 March 2024

As discussed above.


£’million	Demand	Up to one month	One to three months	Three to six months	Six months to one year	One to five years	>Five years	Total
Behavioural liquidity gap	6 594	(184)	(3 787)	(1 938)	(1 980)	1 120	175	—
Cumulative	6 594	6 410	2 623	685	(1 295)	(175)	—



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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194

Interest rate risk in the banking book (IRRBB)

Measurement and management of IRRBB

IRRBB is an inherent consequence of conducting banking

activities, and arises from the provision of non-trading banking

products and services. The Group considers the management

of banking margin of vital importance, and our IRRBB philosophy

is reflected in our day-to-day practices.

The aim of IRRBB management is to protect net interest income

and economic value in accordance with the Board-approved

risk appetite. IRRBB is measured and analysed by utilising

standard tools of traditional interest rate repricing mismatch and

net present value (NPV) sensitivity to changes in interest rate

risk factors:

• Income metrics capture the change in accruals expected over

a specified time horizon in response to a change in interest

rates

• Economic value metrics capture all future cash flows in order

to calculate the Group’s net worth and therefore can highlight

risks beyond the short-term earnings time horizon.

These metrics are used to assess and to communicate to senior

management the financial impact of possible future interest rate

scenarios, covering:

• Interest rate expectations and perceived risks to the central

view

• Standard shocks to levels and shapes of interest rates and

yield curves.

The repricing gap provides a simple representation of the

balance sheet, with the sensitivity of fair values and earnings to

changes to interest rates calculated off the repricing gap. This

also allows for the detection of interest rate risk concentration

in specific repricing buckets. Net interest income sensitivity

measures the change in accruals expected over the specified

horizon in response to a shift in the yield curve, while economic

value sensitivity and stress testing to macro-economic

movement or changes to the yield curve measures the interest

risk implicit change in net worth as a result of a change in

interest rates on the current values of financial assets and

liabilities. Economic value measures have the advantage that all

future cash flows are considered and therefore assess the risk

beyond the earnings horizon.

Sources of IRRBB include:

• Repricing risk: arises from the timing differences in the fixed

rate maturity and floating rate repricing of Group assets,

liabilities and derivative positions. This affects the interest

rate margin realised between lending income and borrowing

costs when applied to our rate sensitive portfolios

• Yield curve risk: repricing mismatches also expose the

Group to changes in the slope and shape of the yield curve

• Basis risk: arises from imperfect correlation in the

adjustments of the rates earned and paid on different

instruments with otherwise similar repricing characteristics

• Embedded option risk: arises from optional elements

embedded in items where the Group or its customers can

alter the level and timing of their cash flows, such as the

prepayment of fixed rate loans and withdrawal of non-

maturity deposits (NMDs)

• Endowment risk: refers to the interest rate risk exposure

arising from the net differential between interest rate

insensitive assets, interest rate insensitive liabilities and

capital.

The above sources of interest rate risk affect the interest rate

margin realised between lending income and borrowing costs

when applied to our rate sensitive asset and liability portfolios,

which has a direct effect on future net interest earnings and the

economic value of equity.

Each banking entity has its own Board-approved IRRBB

appetite, which is clearly defined in relation to both income risk

and economic value risk. The Group has limited appetite for

IRRBB.

Operationally, daily management of interest rate risk is

centralised within the Treasury of each banking entity and is

subject to local independent risk and ALCO review. Treasury

mitigates any residual undesirable risk where possible, by

changing the duration of the banking book’s discretionary liquid

asset portfolio, or through derivative transactions. The Treasury

mandate allows for a tactical response to market volatility which

may arise during changing interest rate cycles, in order to

hedge residual exposures. Any resultant interest rate position

is managed under the IRRBB risk limits. Balance sheet risk

management independently monitors a broad range of interest

rate risk metrics to changes in interest rate risk factors, detailing

the sources of interest rate exposure.

Automatic optionality arising from variable rate products with an

embedded minimum lending rate serves as an income

protection mechanism for the Group against falling interest

rates, while behavioural optionality risk from customers of fixed

rate products is mitigated by early repayment charges.

The UK Bank maintains a structural hedging programme to

reduce the sensitivity of earnings to short-term interest rate

movements. An amortising profile of £1.56 billion tangible equity

has been assigned with an average duration of 2.5 years evenly

distributed over the period. The termed equity is then hedged

and managed within the Group’s overall interest rate risk

appetite.

Net interest income sensitivity at 31 March 2024

IRRBB is measured and monitored using an income sensitivity

approach. The tables below reflect an illustrative annualised net

interest income value sensitivity to a 0.25% parallel shift in

interest rates, based on modelled assumptions, assuming no

management intervention.


million	All (GBP)
25bps down	(8.0)
25bps up	7.2

Economic value (EV) sensitivity at 31 March 2024

IRRBB is measured and monitored using the EV sensitivity

approach. The tables below reflect an illustrative economic

value sensitivity to a 2% parallel shift in interest rates, based on

modelled assumptions, assuming no management intervention.

This sensitivity effect would only have a negligible direct impact

on our equity.


million	All (GBP)
200bps down	2.8
200bps up	(9.1)



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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Regulatory requirements

Liquidity risk

The two minimum BCBS standards for

funding liquidity are:

• The Liquidity Coverage ratio (LCR)

which is designed to ensure that banks

have sufficient high-quality liquid

assets to meet their liquidity needs

throughout a 30-calendar day severe

stress

• The Net Stable Funding ratio (NSFR)

which is designed to capture structural

issues over a longer time horizon by

requiring banks to have a sustainable

maturity structure of assets and a

stable liability base.

The Investec plc and IBP (solo basis)

LCRs are calculated based on the rules

contained in the PRA rulebook overlaid

with our own interpretations where the

regulation requires. Banks are required to

maintain a minimum LCR of 100%. As at

31 March 2024 the LCR was 453% for

Investec plc and 519% for IBP (solo

basis).

Within the UK, the NSFR has become

a binding requirement for banks since

January 2022. Banks are now required

to maintain a minimum NSFR of 100%.

The NSFR at 31 March 2024 was 146%

for Investec plc and 144% for IBP

(solo basis).

Investec plc undertakes an annual ILAAP

which documents the approach to

liquidity management across the firm.

This document is approved by the IBP

and DLC Boards before being provided to

the PRA for use, alongside the Liquidity

Supervisory Review and Evaluation

Process, to determine the bank’s

Individual Liquidity Guidance, also known

as a Pillar II requirement.

IRRBB

In 2016, the BCBS finalised their

standards for IRRBB which recommended

the risk is assessed as part of the Bank’s

capital requirements, outlined six

prescribed shock scenarios, and

recommended enhanced disclosure

requirements for supervisors to

implement.

The regulatory framework requires banks

to assess their Pillar II requirements,

including those related to IRRBB, as part

of their ICAAP in accordance with

PS22/21 and SS31/15. This is reviewed

on at least an annual basis and reviewed

and approved by IBP BRCC, DLC BRCC

and by the IBP and DLC Boards.

Balance sheet risk year in review

The Group maintained its strong liquidity

position and continues to hold high levels

of surplus liquid assets. Our liquidity risk

management process remains robust and

comprehensive.

Funding continues to be dynamically

raised through a mix of customer

liabilities diversified by customer type,

currency, channel and tenor, avoiding

reliance on any particular channel and

ensuring continued access to a wide

range of depositors. Those diversified

funding channels have proven to be

capable of raising funding throughout the

year to support asset growth despite the

uncertain macro-economic environment,

persistent market volatility and increased

competition for deposits. Overall

customer deposits have grown

substantially in the year to 31 March

2024.

We have limited reliance on wholesale

funding but we maintain access and

presence, using such wholesale issuance

to strategically diversify our funding base

and complement the other liability

channels by focusing, where appropriate,

on tenor and currency as part of a longer

term strategic plan.

Wholesale issuance in the year took

advantage of market windows to focus

on refinancing upcoming calls to lengthen

term, with the added benefit of

continuing to diversify the debt capital

markets investor base. As a result we

have no requirement to issue in the

wholesale markets in the financial year to

end March 2025. As of March 2024, the

preferred resolution strategy for IBP

remained bank insolvency procedure with

no MREL requirement in excess of its

minimum capital requirements. However,

the BoE formally notified Investec plc on

28 June 2023 that the preferred

resolution strategy will change from bank

insolvency procedure to bail-in and as

such Investec plc, and IBP as a material

subsidiary, will be subject to a revised

MREL requirement. The MREL transition

will commence from 1 January 2026 in a

phased manner with end-state MREL

applying from 1 January 2032. Any

additional MREL requirements will be met

over time as part of increasing wholesale

market issuance from the existing

established base and we will continue to

evaluate issuance opportunities in the

near term as part of this glide path.

As at 31 March 2024, IBP had £1.2 billion

of drawings under the BoE Term Funding

Scheme with additional incentives for

Small and Medium Enterprises (TFSME)

maturing in late 2025.

Funding consists primarily of customer

deposits, with loans and advances to

customers as a percentage of customer

deposits at 79.7% at 31 March 2024. We

are therefore well positioned from a

funding and liquidity perspective if there

were to be further disruption to financial

markets given both the highly diversified

nature of Investec plc’s deposit base and

the reliance on term and notice deposits

rather than demand deposits. Deposits

grew by 8.7% over the year to £20.8

billion. Granularity of deposits is a key

area of focus and Investec plc has a

substantial portion of eligible deposits

that are covered by FSCS protection. The

FSCS is a UK government-backed

scheme designed to provide protection

to eligible customers, to the maximum

value of £85 000, in the event that a

financial institution is unable to meet its

financial obligations.

Cash and near cash balances at 31 March

2024 amounted to £9.7 billion (31 March

2023: £8.6 billion).

This overall approach has enabled the

Group to maintain a strong liquidity

position at the year end across a range of

metrics in line with our conservative

approach to balance sheet risk

management.

Looking forward, the focus remains on

maintaining a strong liquidity position in

light of overall market volatility. Funding

continues to be actively raised, across a

diverse funding base, in line with a

medium- to long-term strategy to reduce

the overall tenor-adjusted cost of the

liability base supported by stable credit

ratings.


	Refer to page 29 for further detail on credit ratings.



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196


	66. Operational risk

Operational risk is an inherent risk in the ordinary course of business activity. The impact could be financial as well as non-financial.

Possible non-financial impacts could include customer detriment, reputational or regulatory consequences.

Management and measurement of operational risk

The Group manages operational risk through an operational risk management framework that is embedded across all levels of the

organisation and is supported by a strong risk management culture. The key purpose of the operational risk management

framework is to define the policies and practices that provide the foundation for a structured and integrated approach to identify,

assess, mitigate/manage, monitor and report on operational risks.

The key operational risk practices are as follows:


Identify and assess
	Risk and control assessments	• Risk and control assessments are forward-looking, qualitative assessments of inherent and residual risk that are performed on key business processes using a centrally defined risk framework • These assessments enable business to identify, manage and monitor operational risks, incorporating other elements of the operational risk management framework such as risk events and key indicators • Detailed control evaluations are performed, and action plans developed and implemented where necessary to ensure that risk exposure is managed within acceptable levels.
	Internal risk events	• Internal risk events provide an objective source of information relating to failures in the control environment • The tracking of internal risk event data provides an opportunity to improve the control environment and to minimise the occurrence of future risk events • In addition, internal risk event data is used as a direct input into the Pillar II capital modelling process.
	External risk events	• External risk events are operational risk related events originating outside the organisation • The Group is an active member of a global external data service used to benchmark our internal risk event data against other local and international financial service organisations • The external data is analysed to enhance the control environment, inform scenario analysis and provide insight into emerging operational risks.
	Mitigate/manage
	Risk exposures	• Risk exposures are identified through the operational risk management processes, including but not limited to risk assessments, internal risk events, key indicators and audit findings • Residual risk exposure is evaluated in terms of the Group’s risk appetite and mitigated where necessary by improving the control environment, transferring through insurance, terminating the relevant business activity or accepting the risk exposure for a period of time subject to formal approval and monitoring.
	Monitor
	Key risk indicators	• Indicators are metrics used to monitor risk exposures against identified thresholds • The output provides predictive capability in assessing the risk profile of the business.

Operational risk governance framework

The operational risk governance structures form an integral part

of the operational risk management framework. Key

components of the governance structures are:

Roles and responsibilities

The Group, in keeping with sound governance practices, has

defined roles and responsibilities for the management of

operational risk in accordance with the three lines of defence

model, i.e. business line management, an independent operational

risk function and an independent internal audit function.

Specialist control functions are responsible for the management

of key operational risks. These include, but are not limited to:

compliance (including financial crime compliance), cyber,

finance, fraud, legal, technology and information security risks.

Committees

Operational risk is managed and monitored through various

governance forums and committees that are integrated with th e

Group’s risk management governance structure and report to

Board level committees.

The Group’s operational risk profile is reported to the

governance forums and committees on a regular basis, which

contributes to sound risk management and decision-making

by the Board and management.

• Operational risk:

Management forums and committees are in place at each entity

level. Key responsibilities include the monitoring of operational

risk and oversight of the operational risk management

framework, including approval of the operational risk

management policies.

• Technology, information security and cyber risk:

The DLC IT Risk and Governance Committee is responsible

for the monitoring of current and emerging technology and

information security risks. In addition, this committee considers

the strategic alignment of technology within the business.

The UK Technology Management Committees monitor

technology risks for the UK entities and escalate current and

emerging risks to the DLC IT Risk and Governance Committee

and relevant local risk governance forums and committees.



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197

Risk appetite

Operational risk appetite is defined as the

level of risk exposure that is acceptable

to the Board in order to achieve its

business and strategic objectives. The

Board is responsible for setting and

regularly reviewing the risk appetite. The

operational risk appetite policy defines

the amount of operational risk exposure,

or potential adverse impact of a risk

event, that the Group is willing to accept

through qualitative and quantitative

measures.

Operational risks are managed in

accordance with the approved risk

appetite. Any breaches of limits are

escalated in accordance with the

appropriate governance structures.

Operational risk year in review

Key operational risk themes

During the year the Group remained

focused on the management of the

following key operational risks:

Business disruption and operational

resilience risk

• Investec's resilience capabilities are

continuously tested through the

occurrence of disruptive events

• Significant planning and testing has

taken place to ensure impact

tolerances are adhered to during

disruption events to mitigate against

client harm

• Investec remains committed to

upholding global regulatory

requirements for operational resilience,

ensuring compliance with regulatory

expectations and delivering value to

our stakeholders.

Information security and cyber risk

• Recognising the unpredictable nature

and sophistication of cyber and insider

threats, information and cyber security

were key focus for the Group

• Ransomware events continued to be

observed across the sector, and often

involved theft of sensitive data for the

purpose of extortion

• While still in its early stages, threat

actors began exploring the use of

artificial intelligence (AI) to automate

and enhance attack

• Targeted security evaluations continue

to run internally and by independent

specialists to validate controls and

inform ongoing improvements

• The Group’s risk exposure was well

managed and no material losses

attributed to information security or

cyber events were recorded.

Technology risk

• As part of the Group’s digitalisation

strategies, high rates of technology

change were noted. Isolated

disruptions associated with key

modernisation and growth initiatives

were well managed.

Regulatory compliance risk

• Increasingly stringent regulatory

compliance obligations continued to be

a focus for the Group

• There has been a sustained focus by

regulators on organisational resilience

in the financial services sector and

emphasis placed on working towards

ensuring a financial system that is fair,

efficient and resilient

• Material regulatory developments in

the UK for the Group are:

– The implementation of the new

Consumer Duty, which requires

higher standards of consumer

protection and ensures that firms

prioritise good customer outcomes

– The Edinburgh Reforms (c.30 policy

initiatives) which include a review of

the Senior Managers and

Certification Regime, consumer

credit legislation, retail investment

disclosures regime (PRIIPs), and

various wholesale regulations

including Short Selling, Prospectus

Regime and MiFIDII.

Third party risk

• The Group’s commitment to

digitalisation placed increased reliance

on third party services and cloud

providers

• Ongoing enhancements were made to

third party due diligence and reporting

practices to ensure that we meet

evolving regulatory requirements

• This was supported by robust

oversight of third party performance

and monitoring of their financial health

and cyber posture

• Where adverse indicators were

identified, we engaged in constructive

dialogue with our third parties and

implemented risk mitigation strategies

to safeguard our operations

• The Group strengthened visibility of

concentration risk, associated with our

third parties and their fourth parties.

Processing and execution risk

• Processing and execution risks

identified through internal risk event

monitoring remains a significant

operational risk theme due to the

frequency and monetary impact of

reported operational risk loss events

• The main factors contributing to these

risks during the reporting period

include, amongst others, unintentional

human error, ineffective change

management, inadequate process

design, and insufficient management

oversight

• Despite the organisation's commitment

to digitalisation, there is still a reliance

on manual processes. When

automation is not possible, process

redesign is undertaken to address

control gaps. Additionally, there is a

strong emphasis on monitoring key

controls through collaborative

assurance initiatives

• Every effort is made to minimise the

impact of processing and execution

risks on clients by promptly

implementing recovery measures.

Insurance

The Group maintains adequate insurance

to cover key insurable risks. The

insurance process and requirements are

managed by the Group insurance risk

manager. Regular interaction between

operational risk management and

insurance risk management ensures that

there is an exchange of information in

order to enhance the mitigation of

operational risk.


	Please refer to pages 80 to 84 of the Investec Group's 2024 risk and governance report for additional information regarding compliance, reputational risk and legal risk.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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	67. Recovery and resolution planning

The purpose of the recovery plans are

to document how the Board and

management will plan for Investec plc

to recover from extreme financial stress

to avoid liquidity and capital difficulties.

The plans are reviewed and approved

by the Board on an annual basis.

The recovery plan:

• Integrates with existing contingency

planning

• Identifies roles and responsibilities

• Identifies early warning indicators and

trigger levels

• Analyses how the Group could be

affected by the stresses under various

scenarios

• Includes potential recovery actions

available to the Board and

management to respond to the

situation, including immediate,

intermediate and strategic actions

• Identify the recovery capacity available

to avoid resolution actions

• Run externally facilitated simulations

or firedrill exercises as required by the

regulations.

The Bank Recovery and Resolution

Directive (BRRD) was implemented in the

UK via the UK Banking Act 2009. It was

amended by the BRRD (Amendment)

(EU Exit) Regulation 2020, which

implemented into UK law certain

amendments to the BRRD.

The BoE, the UK resolution authority has

the power to intervene in and resolve a

financial institution that is no longer

viable. This is achieved through the use

of various resolution tools, including the

transfer of business and creditor

financed recapitalisation (bail-in within

resolution) that allocates losses to

shareholders and unsecured and

uninsured creditors in their order of

seniority, at a regulator determined point

of non-viability that may precede

insolvency.

The PRA has made rules that require

authorised institutions to draw up

recovery plans and resolution packs.

Recovery plans are designed to outline

credible recovery options that authorised

institutions could implement in the event

of severe stress in order to restore their

business to a stable and sustainable

condition. The resolution pack contains

detailed information on the services

provided, as well as the structure and

operation of the authorised institution in

question which will be used by the BoE

to develop resolution strategies for that

specific institution, assess its current

level of resolvability against the strategy,

and to inform work on identifying barriers

to the implementation of operational

resolution plans.

In line with PRA and onshored EU

requirements, Investec plc maintains a

resolution pack and a recovery plan. Even

though the recovery plan is framed at

Investec plc level, given that IBP

constitutes over 79% of Investec plc’s

balance sheet, the focus of this

document is the recovery of IBP and the

protection of its depositors and other

clients.

Similarly, the resolution pack is drafted

for Investec plc. As Investec plc is an

approved UK Financial Holding Company

(FHC) and IBP is its most significant

entity, the Investec plc resolution

strategy is expected to be driven and

determined by IBP’s resolution strategy.

As of March 2024, the preferred

resolution strategy for IBP remained bank

insolvency procedure with no Minimum

Requirements for Own Funds and Eligible

Liabilities (MREL) requirement in excess

of its minimum capital requirements.

However, the BoE formally notified

Investec plc on 28 June 2023 that the

preferred resolution strategy will change

from bank insolvency procedure to bail-in

and as such Investec plc, and IBP as a

material subsidiary, will be subject to a

revised MREL requirement. The MREL

transition will commence from 1 January

2026 in a phased manner with end-state

MREL applying from 1 January 2032. Any

additional MREL requirements will be met

over time as part of increasing wholesale

market issuance from the existing

established base and we will continue to

evaluate issuance opportunities in the

near term as part of this glide path.

As a bail-in firm, Investec plc will come

into scope of the BoE’s Resolvability

Assessment Framework and is

committed to ensuring its resolution

capabilities meet the required regulatory

standards.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

199


	68. Capital management and allocation

Current regulatory framework

Investec plc is an approved UK Financial Holding Company (FHC), responsible for ensuring compliance with consolidated prudential

requirements on a consolidated basis. Investec Bank plc, the main banking subsidiary of the Investec plc Group, continues to be

authorised by the PRA and regulated by the FCA and the PRA. Investec plc calculates capital resources and requirements using the

Basel III framework, as implemented in the European Union through the CRR and CRD IV, as amended by CRR II and CRD V.

Following the end of the Brexit transitional period, the EU rules (including binding technical standards) were onshored and now

form part of domestic law in the UK by virtue of the European Union (Withdrawal) Act 2018.

A summary of capital adequacy and leverage ratios


	Investec plc*	Investec plc*
	31 March 2024	31 March 2023
Common Equity Tier 1 ratio**	12.1%	11.7%
Common Equity Tier 1 ratio (fully loaded)***	12.0%	11.4%
Tier 1 ratio**	14.6%	13.1%
Total Capital ratio**	18.4%	17.2%
Risk weighted assets (£'million)**	18 509	17 767
Leverage exposure measure (£'million)	27 015	25 216
Leverage ratio	10.0%	9.2%
Leverage ratio (fully loaded)***	9.9%	9.0%

*The capital adequacy and leverage disclosures for Investec plc includes the deduction of foreseeable charges and dividends when calculating CET1 and Tier 1 capital.

These disclosures differ from the disclosures included in Investec Group’s year-end results booklet 2024, which follow our normal basis of presentation and do not

include this deduction. Investec plc’s CET1 ratio would be 30bps (31 March 2023: 31bps) and the leverage ratio 21bps (31 March 2023: 22bps) higher, on this basis.

**The CET1, Tier 1, Total Capital ratios and RWAs are calculated applying the IFRS 9 transitional arrangements.

***The CET1 ratio (fully loaded) and the leverage ratio (fully loaded) assumes full adoption of IFRS 9.

Investec plc applies the Standardised

Approach to calculate credit risk and

counterparty credit risk, credit valuation

adjustment (CVA) risk, securitisation risk,

operational risk and market risk capital

requirements. Since 1 January 2022,

Investec plc adopted the outstanding

CRR II changes to be implemented in the

UK, most notably the new Standardised

Approach for measuring Counterparty

Credit Risk (SA-CCR) and changes to the

large exposure regime.

Investec plc is not subject to the

minimum leverage ratio requirement of

3.25% under the UK leverage ratio

framework, but is subject to a

‘supervisory expectation’ to manage

excessive leverage by ensuring the

leverage ratio does not fall below 3.25%.

For simplicity, the same leverage ratio

exposure measure and capital measure

applies to all UK banks (including the

exemption of central bank reserves and

reflect updated international standards).

Subsidiaries of Investec plc may be

subject to additional regulations as

implemented by local regulators in their

respective jurisdictions. Where capital is

a relevant consideration, management

within each regulated entity pays close

attention to prevailing local regulatory

rules as determined by their respective

regulators.

Year under review

During the year under review, Investec

plc complied with the capital adequacy

requirements imposed on it by the PRA.

Investec plc continues to hold capital in

excess of all the capital and buffer

requirements. At 31 March 2024, the

CET1 ratio increased to 12.1% from 11.7%

at 31 March 2023. CET1 capital increased

by £166 million to £2.2 billion, mainly as a

result of CET1 capital generation of

£706 million through profit after taxation.

The increase is partially offset by:

• An increase of £359 million in the

goodwill and intangible asset

deduction (net of deferred taxation

liability) arising mainly on the IW&I UK

and Rathbones combination, with

£56 million of the increase attributable

to the Group’s acquisition of a majority

interest in Capitalmind

• Dividends paid to ordinary

shareholders and Additional Tier 1

security holders of £117 million

• A net decrease in other comprehensive

income of £12 million, which includes

the fair value decrease in our

investment in Ninety One and the

reversal of the cash flow hedge

reserve which is not recognised in

CET1 capital

• A decrease of £29 million in the IFRS 9

transitional add-back adjustment

• An increase in the treasury shares of

£10 million.

Risk weighted assets (RWAs) increased

by 4.2% or £742 million to £18.5 billion

over the period, predominantly within

credit risk RWAs.

Credit risk RWAs, which includes equity

risk, increased by £1.1 billion. £270 million

of the increase is attributable to RWAs

arising on the proportional consolidation

of the Group’s 41.25% interest in

Rathbones net of IW&I UK. The remaining

increase reflects asset growth in Project

Finance, Growth & Acquisition Finance,

Mortgages and Asset Finance.

Counterparty credit risk RWAs (including

CVA risk) decreased by £117 million

compared to 31 March 2023, primarily

driven by a decrease in repurchase

agreements and derivative financial

instruments.

Market risk RWAs decreased by

£85 million, mainly due to a decrease

in the collective investment undertaking

position risk.

Operational risk RWAs decreased by

£145 million to £1.9 billion. The decrease

is mainly due to the removal of IW&I UK

gross income from the three-year

average income calculation. The PRA

granted Investec plc permission to

remove the discontinued operation from

the calculation. The decrease in

operational risk RWAs is marginally offset

by higher profits and the inclusion of

41.25% of Rathbones’ gross income in the

RWA calculation.

The Group's leverage ratio increased to

10.0% from 9.2% at 31 March 2023.

Tier 1 capital increased by £374 million.

£166 million of the increase is attributable

to an increase in CET1 capital, driven by

an increase in profit after taxation offset

by an increase in the goodwill and

intangible asset deduction and other



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

200

regulatory adjustments. The remaining

increase of £208 million arose from the

Investec plc liability management

exercise which was undertaken in

February 2024 and resulted in

£142 million of existing Fixed Rate Reset

Perpetual Additional Tier 1 Write Down

Capital Securities (callable in December

2024) to be repurchased via a concurrent

cash tender and replaced with

£350 million of Sterling-denominated

Fixed Rate Reset Perpetual Additional

Tier 1 Write Down Capital securities

callable in February 2030.

The leverage exposure measure

increased by £1.8 billion, of which

£626 million has arisen on the

proportional consolidation of 41.25% of

Rathbones net of IW&I UK with the

remaining increase driven by asset

growth across multiple balance sheet line

items, most notably in loans to customers

of £1 billion, sovereign debt securities of

£706 million, bank debt securities of

£93 million offset by reductions in

reverse repurchase agreements and

derivative financial instruments of £617

million.

Minimum capital requirement

Investec plc’s minimum CET1 requirement

at 31 March 2024 is 8.6% comprising a

4.5% Pillar 1 minimum requirement, a 2.5%

Capital Conservation Buffer (CCB), a 0.31%

Pillar 2A requirement and a 1.3%

Countercyclical Capital Buffer (CCyB). The

Group’s institution-specific CCyB

requirement is calculated based on the

relevant exposures held in jurisdictions in

which a buffer rate has been set. As at

31 March 2024 the UK CCyB rate is 2%.

Significant regulatory developments in

the period

From 5 July 2023, the UK CCyB rate

increased from 1% to 2%. The Financial

Policy Committee agreed, when they met

in July 2023, to maintain the UK CCyB

rate at 2%, ensuring banks have sufficient

capacity to absorb future shocks without

unduly restricting lending.

On 30 November 2022, the PRA

published a consultation paper on the

Implementation of the Basel 3.1

standards, which set out the proposed

rules and expectations that cover parts of

the Basel 3 standards that remain to be

implemented in the UK and relate to the

calculation of RWAs.

The Basel 3.1 standards aim to restore

credibility in risk weighted ratios, by

introducing more robust and risk-

sensitive Standardised Approaches,

whilst curtailing the RWA benefits Internal

Models can provide. The proposals aim to

advance the PRA’s primary objective to

promote the safety and soundness of the

firms that it regulates. By improving the

measurement of risk, the PRA are of the

view that it will help ensure firms are

adequately capitalised given the risks

they are exposed to. Whilst the PRA are

proposing limited adjustments to the

international standards in order to adhere

to the global reforms, they have

proposed the removal of several

onshored EU discretions, such as the

small and medium-sized enterprise (SME)

supporting factor.

The consultation closed for comment on

31 March 2023 with the rule changes

initially planned to take effect from

1 January 2025.

On 27 September 2023, the PRA

released a statement confirming the

implementation will be delayed by six

months to 1 July 2025, with full

compliance required by 1 January 2030.

The statement also confirmed that the

final rules will be published in two

separate parts. The initial set of near-final

rules, which encompass market risk,

CCR, CVA risk and operational risk, were

published in December 2023. The

publication of the second set of rules is

scheduled for the second quarter of

2024. Once HM Treasury has passed

legislation to revoke the relevant parts of

the onshored CRR, the PRA will issue a

final policy statement, containing all of

the Basel 3.1 standards. The publication

of the second set of rules will now be

delayed, due to the release date falling

within the UK pre-election period, which

could result in further delays to the UK

implementation of Basel 3.1.

The PRA have also indicated that the

Pillar 2A framework will need to be

recalibrated due to the changes to the

Standardised Approaches for the

different risk types and confirmed that an

off-cycle review of firm-specific Pillar 2

capital requirements will be conducted

ahead of day 1 implementation.

On 29 November 2023 the Basel

Committee published for consultation a

new Pillar 3 disclosure framework for

climate-related financial risks. Final

proposals will be issued in the second

half of 2024, with the framework

expected to take effect from

1 January 2026. The PRA are yet to

consult on these proposals.

Pillar 3 disclosure requirement


	The 31 March 2024 Pillar 3 disclosures for the Investec plc Group are published in a standalone disclosure report and can be found on the Investec Group’s website.

Philosophy and approach

Investec plc Group’s approach to capital

management utilises both regulatory

capital as appropriate to that jurisdiction

and internal capital, which is an internal

risk-based assessment of capital

requirements. Capital management

primarily relates to management of the

interaction of both, with the emphasis on

regulatory capital for managing portfolio

level capital sufficiency and on internal

capital for ensuring that returns are

appropriate given the level of risk taken

at an individual transaction or business

unit level.

We intend to maintain a sufficient level of

capital to satisfy regulatory requirements

and our internal target ratios. On a

consolidated basis for Investec plc and

Investec Limited, we target a Total

Capital ratio range of between 14% and

17%, and we target a minimum Tier 1 ratio

of 11% and a CET1 ratio above 10%.

The determination of target capital is

driven by our risk profile, strategy and

risk appetite, taking into account the

regulatory and market factors applicable

to the Group. At the most fundamental

level, we seek to balance our capital

consumption between prudent

capitalisation in the context of the

Group’s risk profile and optimisation of

shareholder returns. Our internal capital

framework is designed to manage and

achieve this balance.

The internal capital framework is based

on the Group’s risk identification, review

and assessment processes and is used

to provide a risk-based approach to

capital allocation, performance and

structuring of our balance sheet. The

objectives of the internal capital

framework are to quantify the minimum

capital required to:

• Maintain sufficient capital to satisfy the

Board’s risk appetite across all risks

faced by the Group

• Provide protection to depositors

against losses arising from risks

inherent in the business

• Provide sufficient capital surplus to

ensure that the Group is able to retain

its going concern basis under relatively

severe operating conditions

• Inform the setting of minimum

regulatory capital through the ICAAP

and subsequent Supervisory Review

and Evaluation Process (SREP). The

ICAAP documents the approach to

capital management, including the

assessment of the regulatory and

internal capital position of each Group

• The ICAAP is reviewed and approved

by DLC BRCC and the Board.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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The framework has been approved by

the Board and is managed by the DLC

Capital Committee, which is responsible

for oversight of the management of

capital on a regulatory and an internal

capital basis.

Capital planning and stress/scenario

testing

A capital plan is prepared for Investec plc

and is maintained to facilitate discussion

of the impact of business strategy and

market conditions on capital adequacy.

This plan is designed to assess capital

adequacy under a range of economic and

internal conditions over the medium term

(three years), with the impact on

earnings, asset growth, risk appetite and

liquidity considered. The plan provides

the Board with an input into strategy and

the setting of risk appetite by considering

business risks and potential

vulnerabilities, capital usage and funding

requirements given constraints where

these exist.

Capital plans are prepared and presented

to the Capital Committees on a monthly

basis. The plans are updated with the

actual month-end position and forecast

out to the end of the fiscal year, taking

into account updated profit and loss and

asset growth forecasts.

The goal of capital planning is to provide

insight into potential sources of

vulnerability of capital adequacy by way

of market, economic or internal events.

As such, the three-year capital plans are

stressed based on conditions most likely

to cause Investec plc duress. The

conditions are agreed by the Investec plc

Capital Committee after the key

vulnerabilities have been determined

through the stress testing workshops.

Such plans are used by management to

formulate balance sheet strategy and

agree management actions, trigger points

and influence the determination of our

risk appetite. At a minimum level, each

capital plan assesses the impact on our

capital adequacy in an expected case

and in downturn scenarios. On the basis

of the results of this analysis, the

Investec plc Capital Committee, DLC

Capital Committee and DLC BRCC are

presented with the potential variability

in capital adequacy and are responsible,

in consultation with the Board, for

considering the appropriate response.

Reverse stress testing is performed

annually as part of the ICAAP process.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

202

Capital structure and capital adequacy


	Investec plc*	Investec plc*
£'million	31 March 2024	31 March 2023
Shareholders' Equity	2 917	2 373
Shareholders’ equity excluding non-controlling interests	3 011	2 468
Foreseeable charges and dividends	(56)	(55)
Perpetual preference share capital and share premium	(25)	(25)
Deconsolidation of special purpose entities	(13)	(15)
Non-controlling interests	—	—
Non-controlling interests per balance sheet	3	1
Non-controlling interests excluded for regulatory purposes	(3)	(1)
Regulatory adjustments to the accounting basis	(3)	16
Additional value adjustments	(5)	(5)
Cash flow hedging reserve	(18)	(28)
Adjustment under IFRS 9 transitional arrangements	20	49
Deductions	(677)	(318)
Goodwill and intangible assets net of deferred taxation	(671)	(312)
Deferred taxation assets that rely on future profitability excluding those arising from temporary difference	(2)	(2)
Securitisation positions which can alternatively be subject to a 1 250% risk weight	(1)	(4)
Defined benefit pension fund adjustment	(3)	—
Common Equity Tier 1 capital**	2 237	2 071
Additional Tier 1 instruments	458	250
Tier 1 capital **	2 695	2 321
Tier 2 capital**	712	739
Tier 2 instruments	712	764
Non-qualifying surplus capital attributable to non-controlling interests	—	(25)
Total regulatory capital**	3 407	3 060

Risk weighted assets**	18 509	17 767

*The capital adequacy and leverage disclosures for Investec plc includes the deduction of foreseeable charges and dividends when calculating CET1 and Tier 1 capital.

These disclosures differ from the disclosures included in Investec Group’s year-end results booklet 2024, which follow our normal basis of presentation and do not

include this deduction. Investec plc’s CET1 ratio would be 30bps (31 March 2023: 31bps) and the leverage ratio 21bps (31 March 2023: 22bps) higher, on this basis.

** The CET1, Tier 1, Total Capital ratios and RWAs are calculated applying the IFRS 9 transitional arrangements.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

203

Risk weighted assets and capital requirements


	Investec plc	Investec plc
£’million	31 March 2024	31 March 2023
Risk weighted assets**	18 509	17 767
Credit risk	15 278	14 122
Equity risk	527	594
Counterparty credit risk	370	477
Credit valuation adjustment risk	27	37
Market risk	428	513
Operational risk	1 879	2 024
Capital requirements	1 481	1 421
Credit risk	1 223	1 130
Equity risk	42	47
Counterparty credit risk	30	38
Credit valuation adjustment risk	2	3
Market risk	34	41
Operational risk	150	162

Leverage


£’million	Investec plc*	Investec plc*
£’million	31 March 2024	31 March 2023
Total exposure measure	27 015	25 216
Tier 1 capital**	2 695	2 321
Leverage ratio	10.0%	9.2%
Total exposure measure (fully loaded)	26 995	25 168
Tier 1 capital (fully loaded)	2 675	2 273
Leverage ratio (fully loaded)***	9.9%	9.0%

*The leverage disclosures for Investec plc include the deduction of foreseeable charges and dividends when calculating Tier 1 capital. These disclosures differ from the

leverage disclosures included in Investec Group’s year-end results booklet 2024, which follow our normal basis of presentation and do not include this deduction.

Investec plc’s leverage ratio would be 21bps (31 March 2023: 22bps) higher, on this basis.

**The CET1, Tier 1, Total Capital ratios and RWAs are calculated applying the IFRS 9 transitional arrangements.

***The CET1 ratio (fully loaded) and the leverage ratio (fully loaded) assumes full adoption of IFRS 9.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

204


Total regulatory capital flow statement
	Investec plc	Investec plc
£'million	31 March 2024	31 March 2023
Opening Common Equity Tier 1 capital	2 071	1 931
Dividends paid to ordinary shareholders and Additional Tier 1 security holders	(117)	(106)
Profit after taxation	706	293
Foreseeable charges and dividends	(1)	(11)
Treasury shares	(10)	(15)
Distribution to shareholders	—	(91)
Share-based payment adjustments	(14)	5
Capitalmind (Option to buy NCI shares)	(3)
Movement in other comprehensive income	(22)	(43)
Investment in capital of financial entities above 10% threshold	—	164
Cash flow hedging reserve	10	(28)
Goodwill and intangible assets (deduction net of related taxation liability)	(359)	(9)
Deferred tax that relies on future profitability (excluding those arising from temporary differences)	—	6
Deconsolidation of special purpose entities	2	5
IFRS 9 transitional arrangements	(29)	(28)
Other, including regulatory adjustments and other transitional arrangements	3	(2)
Closing Common Equity Tier 1 capital	2 237	2 071
Opening Additional Tier 1 capital	250	250
Issued capital	350	—
Redeemed capital	(142)
Closing Additional Tier 1 capital	458	250
Closing Tier 1 capital	2 695	2 321
Opening Tier 2 capital	739	628
Issued capital	—	346
Redeemed capital	(43)	(348)
Other, including regulatory adjustments and other transitional arrangements	17	113
Closing Tier 2 capital	712	739

Closing total regulatory capital	3 407	3 060



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

NOTES TO RISK AND CAPITAL MANAGEMENT CONTINUED

205

Balance sheet


At 31 March	Notes	2024	2023 Restated
£’000	Notes	2024	2023 Restated
Assets
Fixed assets
Investments in subsidiary undertakings	b	1 701 774	1 701 774
Securities and subordinated liabilities issued by subsidiary undertaking	c	1 334 316	1 115 737
Amounts owed by group undertakings	i	556 753	541 948
		3 592 843	3 359 459
Current assets
Investments in listed equities		158 889	172 285
Taxation		6 242	17 886
Prepayments and accrued income		4 745	2 740
– with subsidiary undertakings		—	17 503
– balances with other banks		461	503
		170 337	210 917
Current liabilities
Creditors: amounts falling due within one year
Amounts owed to Group undertakings	i	7 356	—
Other liabilities		3 351	6 189
Accruals and deferred income		10 700	12 438
Net current assets		148 930	192 290
Creditors: amounts falling due after one year
Debt securities in issue	d	492 486	475 811
Subordinated liabilities	e	699 940	698 591
Net assets		2 549 347	2 377 347
Capital and reserves
Ordinary share capital	h	202	202
Ordinary share premium	h	555 812	555 812
Capital reserve		173	180 606
Fair value reserve		21 548	34 943
Retained earnings		1 488 710	1 330 990
Ordinary shareholders’ equity		2 066 445	2 102 553
Perpetual preference share capital and premium	h	24 794	24 794
Shareholders’ equity excluding non-controlling interests		2 091 239	2 127 347
Other Additional Tier 1 securities in issue	h	458 108	250 000
Total capital and reserves		2 549 347	2 377 347

The notes on pages 208 to 215 form an integral part of the financial statements.

The Company’s profit for the year, determined in accordance with the Companies Act 2006, was £112 679 076

( 2023 : £114 940 942).

The Company’s distributable reserves as at 31 March 2024 were £1 488 709 800 (2023: £1 330 990 451).

Approved and authorised for issue by the Board of Directors on 24 June 2024 and signed on its behalf by:

Fani Titi

Group Chief Executive

24 June 2024



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS

206

Statement of changes in shareholders’ equity


£’000	Ordinary share capital	Ordinary share premium	Capital reserve	Fair value reserve	Retained earnings	Ordinary shareholders’ equity	Perpetual preference share capital and premium	Shareholders’ equity excluding non- controlling interests	Other Additional Tier 1 securities in issue	Total equity
At 31 March 2022	202	806 812	180 606	159 661	1 135 468	2 282 749	24 794	2 307 543	250 000	2 557 543
Total comprehensive income	—	—	—	(124 718)	158 556	33 838	—	33 838	—	33 838
Employee benefit liability recognised	—	—	—	—	(1 033)	(1 033)	—	(1 033)	—	(1 033)
Dividends paid to preference shareholders	—	—	—	—	(540)	(540)	—	(540)	—	(540)
Dividends paid to ordinary shareholders	—	—	—	—	(88 463)	(88 463)	—	(88 463)	—	(88 463)
Dividends declared to Other Additional Tier 1 security holders	—	—	—	—	(16 880)	(16 880)	—	(16 880)	16 880	—
Dividends paid to Other Additional Tier 1 security holders	—	—	—	—	—	—	—	—	(16 880)	(16 880)
Transfer from share premium to retained income	—	(251 000)	—	—	251 000	—	—	—	—	—
Distribution to shareholders	—	—	—	—	(107 118)	(107 118)	—	(107 118)	—	(107 118)
At 31 March 2023	202	555 812	180 606	34 943	1 330 990	2 102 553	24 794	2 127 347	250 000	2 377 347
Total comprehensive income	—			(13 395)	93 784	80 389	—	80 389	—	80 389
Dividends paid to preference shareholders	—				(1 455)	(1 455)	—	(1 455)	20 638	19 183
Dividends paid to ordinary shareholders	—				(94 404)	(94 404)	—	(94 404)	(20 638)	(115 042)
Dividends declared to Other Additional Tier 1 security holders	—				(20 638)	(20 638)	—	(20 638)	350 000	329 362
Dividends paid to Other Additional Tier 1 security holders	—				—	—	—	—	(141 892)	(141 892)
Release of capital reserve to retained earnings^	—		(180 433)		180 433	—	—	—		—
At 31 March 2024	202	555 812	173	21 548	1 488 710	2 066 445	24 794	2 091 239	458 108	2 549 347

^The capital reserve transferred to retained earnings on the deconsolidation of Investec Wealth & Investment Limited is in respect of a reserve created on the original

acquisition by Investec plc.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

207

a. Basis of preparation

The parent accounts of Investec plc are prepared in accordance

with Financial Reporting Standard 101 Reduced Disclosure

Framework (FRS 101) and in accordance with applicable

accounting standards. The Company is incorporated and

domiciled in England and Wales and the Company’s accounts

are presented in Pound Sterling and all values are rounded to

the nearest thousand (£’000) except where otherwise indicated.

The accounts have been prepared on the historical cost basis.

The principal accounting policies adopted are set out below.

The Company has taken advantage of the following disclosure

exemptions under FRS 101, where applicable to the Company:

• The requirements of paragraphs 45(b) and 46-52 of IFRS 2

Share-based Payment

• The requirements of paragraphs 62, B64(d), B64(e), B64(g),

B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)

(ii), B66 and B67 of IFRS 3 Business Combinations. Equivalent

disclosures are included in the consolidated financial

statements of Investec plc in which the entity is consolidated

• The requirements of paragraph 33(c) of IFRS 5 Non-current

Assets Held for Sale and Discontinued Operations

• The requirements of IFRS 7 Financial Instruments: Disclosures

• The requirements of paragraphs 91 – 99 of IFRS 13 Fair Value

Measurement

• The requirement in paragraph 38 of IAS 1 Presentation of

Financial Statements to present comparative information in

respect of: (i) paragraph 79(a)(iv) of IAS 1, (ii) paragraph 73(e)

of IAS 16 Property Plant and Equipment, (iii) paragraph 118(e)

of IAS 38 Intangibles Assets, (iv) paragraphs 76 and 79(d) of

IAS 40 Investment Property and (v) paragraph 50 of IAS 41

Agriculture

• The requirements of paragraphs 10(d), 10(f), 16, 38A to 38D,

40A to 40D,111 and 134 – 136 of IAS 1 Presentation of

Financial Statements

• The requirements of IAS 7 Statement of Cash Flows

• The requirements of paragraphs 30 and 31 of IAS 8 Accounting

Policies, Changes in Accounting Estimates and Errors

• The requirements of paragraph 17 and 18A of IAS 24 Related

Party Disclosures

• The requirements in IAS 24 Related Party Disclosures to

disclose related party transactions entered into between two

or more members of a group, provided that any subsidiary

which is a party to the transaction is wholly owned by such

a member

• The requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) –

134(f) and 135(c) – 135(e) of IAS 36 Impairment of Assets

• The requirements of paragraph 52, the second sentence

of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16

Leases

• The requirements of paragraph 58 of IFRS 16, provided that

the disclosures of details of indebtedness required by

paragraph 61(1) of Schedule 1 to the Regulations is presented

separated for lease liabilities and other liabilities, and in total

• The requirements of paragraph 24(b) of IFRS 6 Exploration for

and Evaluation of Mineral Resources to disclose the operating

and investing cash flows arising from the exploration for and

evaluation of mineral resources

• The requirements of paragraph 74A(b) of IAS 16.

As permitted by FRS 101, the Company has taken advantage

of the disclosure exemptions available under that standard

in relation to share-based payments, financial instruments,

capital management, presentation of a cash flow statement,

presentation of comparative information in respect of certain

assets, standards not yet effective, impairment of assets,

business combinations, discontinued operations and related

party transactions.

Where required, equivalent disclosures are given

in consolidated financial statements of the Group.

On the basis of current financial projections and having made

appropriate enquiries, the directors have a reasonable

expectation that the Company has adequate resources to

continue in operational existence up to 31 March 2025, which is

a period greater than twelve months from the date of issue of

the financial statements that aligns with internal budgeting

processes. Accordingly, the going concern basis is adopted in

the preparation of the financial statements.

Foreign currencies

Monetary assets and liabilities in foreign currencies are translated

into Pound Sterling at exchange rates ruling at the balance sheet

date. All foreign currency transactions are translated into Pound

Sterling at the exchange rate ruling at the time of the transaction.

Forward foreign exchange contracts are revalued at the market

rates ruling at the date applicable to their respective maturities.

Any gain or loss arising from a change in exchange rates

subsequent to the date of the transaction is included as an

exchange gain or loss in the income statement.

Investments

Investments in subsidiaries and interests in associated

undertakings are stated at cost less any accumulated

impairment in value.

Equity instruments measured at FVOCI

The Group measures equity instruments at FVOCI when it

considers the investments to be strategic or held for long-term

dividend yield. The equity instruments are not held for trading.

Gains or losses on the derecognition of these equity securities

are not transferred to profit or loss.

Otherwise, equity instruments are measured at fair value

through profit or loss (except for dividend income, which

is recognised in profit or loss).



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

208

Income

Dividends from subsidiaries are recognised when received.

Interest is recognised on an accrual basis.

Taxation

Current tax payable is provided on the amount expected

to be payable on taxable profit at rates that are enacted or

substantively enacted and applicable to the relevant period.

Deferred taxation is provided using the balance sheet method

on temporary differences between the carrying amount of an

asset or liability in the balance sheet and its tax base, except

where such temporary differences arise from:

• The initial recognition of goodwill

• The initial recognition of an asset or liability in a transaction which

is not a business combination and at the time of the transaction

has no effect on the income statement or taxable profit

• In respect of temporary differences associated with the

investments in subsidiaries and interests in associated

undertakings, where the timing of the reversal of the temporary

differences can be controlled and it is probable that the

temporary differences will not reverse in the foreseeable future

• Deferred tax assets or liabilities are measured using the tax

rates that have been enacted or substantively enacted at the

balance sheet date

• Deferred tax assets are recognised to the extent that

it is probable that future taxable profit will be available

against which the deferred tax asset can be utilised

• Items recognised directly in other comprehensive income

are net of related current and deferred taxation.

Company’s own profit and loss account

The Company has taken advantage of the exemption in

Section 408 of the Companies Act 2006 to not present its own

profit and loss account.

Financial assets

Financial assets are recorded at amortised cost applying the

effective interest rate method where they are classified as

amortised cost or fair value through profit and loss.

Financial liabilities

Financial liabilities are recorded at amortised cost applying the

effective interest rate method.

b. Investments in subsidiary undertakings


At 31 March	2024	2023
£’000	2024	2023
At the beginning of the year	1 701 774	1 701 774
Additions	—	—
Disposals	—	—
At the end of the year	1 701 774	1 701 774

c. Securities issued by subsidiary

undertaking

On 5 October 2017, the Company acquired £200 million Fixed

Rate Reset Perpetual Additional Tier 1 Write Down Capital

Securities (AT1 securities) issued by Investec Bank plc. The

securities are perpetual and pay a distribution rate on

5 March, June, September and December, commencing from

5 December 2017. At each distribution payment date, Investec

Bank plc can decide whether to pay the distribution rate, which

is non-cumulative, in whole or in part. The distribution rate is

6.75% per annum until 5 December 2024; thereafter, the

distribution rate resets every five years to a rate 5.749% per

annum plus the benchmark gilts rate. The AT1 securities will

be automatically written down and the Company will lose their

entire investment in the securities should the CET1 capital ratio

of the Investec Bank plc Group, as defined in the PRA’s rules,

fall below 7%. The AT1 securities are redeemable at the option

of Investec Bank plc on 5 December 2024 or on each

distribution payment date thereafter. No such redemption may

be made without the consent of the PRA. On 22 January 2019,

the Company acquired a further £50 million of AT1 securities

issued by Investec Bank plc. On 1 March 2024, the company

bought back £142 million of these securities. £108 million of

these securities remain outstanding as of 31 March 2024.

On 4 October 2021, Investec Bank plc entered into a

£350 000 000 subordinated loan with Investec plc at a fixed

interest rate of 2.625% (2032 Loan). Interest, after the initial

short period distribution paid on 4 January 2022, is paid

annually commencing on 4 January 2023 and ending on the

maturity date. The loan will mature on 4 January 2032. The

borrower may prepay the loan in full on any date in the period

from 4 October 2026 to (and including) 4 January 2027 subject

to conditions.

On 6 December 2022 Investec Bank Plc entered into

a £350 million loan with Investec plc at a fixed interest rate

of 9.125% (2033 Loan). Interest, after the initial short period

distribution paid on 6 March 2023, is paid annually commencing

on 6 March 2024 and ending on the maturity date. The loan will

mature on 6 March 2033. The borrower may prepay the loan in

full on any date in the period from 6 December 2027 to (and

including) 6 March 2028.

On 13 February 2023 Investec Bank plc entered into a

£200 million senior loan with Investec plc at a fixed interest rate

of 1.875%. The loan matures on 16 July 2028 and pays interest

at a fixed rate annually in arrears. The borrower may prepay

the loan in full on 16 July 2027.

On 28 February 2024, Investec Bank plc issued £350 million of

Fixed Rate Reset Perpetual Additional Tier 1 Write Down Capital

Securities which were purchased by the company. These

securities are perpetual and pay interest on a semi-annual basis

on 28 February and 28 August each year, commencing on 28

August 2024. At each interest payment date, Investec Bank plc

can decide whether to pay the coupon, which is non-



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

209

cumulative, in whole or in part. The interest rate is 10.50% per

annum until 28 February 2030; thereafter it resets every

subsequent five years to a rate of 6.566% per annum plus the

benchmark gilt rate. The securities will be automatically written

down and the company will lose their entire investment in the

securities should the Common Equity Tier 1 capital ratio of the

Investec Bank plc group as defined in the PRA’s rules fall below

7%. The securities are redeemable at the option of Investec

Bank plc on any day falling in the period from (and including) 28

August 2029 to (and including) 28 February 2030 or on any day

falling in the period of six months prior to (and including) any

five year reset date thereafter. No such redemption may be

made without the consent of the PRA.

d. Debt securities in issue

On 16 July 2021, the company issued £350 million 1.875%

Senior Unsecured Notes from its EMTN. The notes mature

on 16 July 2028 and pay interest at a fixed rate annually in

arrears. On 13 February 2023 the company issued a further

£200 million of the 1.875% Senior Unsecured Notes due 2028,

at a discount of 17.4070%, which has been consolidated with

and formed a single series with the existing Notes. The issuer

may redeem the notes at par on 16 July 2027.

e. Subordinated liabilities

On 4 October 2021, Investec plc issued £350 000 000

of 2.625% subordinated notes due 2032 at a discount

(2032 Notes). Interest, after the initial short period distribution

paid on 4 January 2022, is paid annually commencing on

4 January 2023 and ending on the maturity date. The notes

are listed on the London Stock Exchange. The notes will be

redeemed at par on 4 January 2032. The issuer may redeem

the notes at par on any date in the period from 4 October 2026

to (and including) 4 January 2027 subject to conditions.

On 6 December 2022, Investec plc issued £350 000 000

of 9.125% subordinated notes due 2033 at a discount

(2033 Notes). Interest, after the initial short period distribution

paid on 6 March 2023, is paid annually commencing on

6 March 2024 and ending on the maturity date. The notes

are listed on the London Stock Exchange. The notes will be

redeemed at par on 6 March 2033. The issuer may redeem the

notes at par on any date in the period from 6 December 2027

to (and including) 6 March 2028 subject to conditions.

f. Audit fees

Details of the Company’s audit fees are set out in note 7 of the

Group financial statements.

g. Dividends

Details of the Company’s dividends are set out in note 11 of the

Group financial statements.

h. Share capital

Details of the company’s ordinary share capital are set out in

note 40 of the Group financial statements. Details of the

perpetual preference shares are set out in note 41 of the Group

financial statements. Details of the Other Additional Tier 1

securities are set out in note 44 of the Group financial

statements.

i. Restatements

Amounts owed by Group undertakings were restated from

Current assets to Fixed assets in accordance with guidance

provided by IAS1 paragraph 66. There is no expectation that the

amount will be realised within a twelve month period post the

reporting date. The 31 March 2024 amount was £556.7 million

(31 March 2023: £541.9 million and 31 March 2022: £523.3

million).

j. Audit opinion

The audit opinion on the financial statements of the Investec plc

parent company is included within the independent auditor’s

report to the members of Investec plc within the Investec

Group's integrated annual report for the year ended

31 March 2024.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

210

k. Subsidiaries


At 31 March 2024	Principal activity	Interest held
United Kingdom Registered office: 30 Gresham Street, London, EC2V 7QP, UK
Investec 1 Limited *	Investment holding company	100%
Investec Holding Company Limited *	Investment holding company	100%
Investec (UK) Limited	Holding company	100%
Guinness Mahon Group Limited	Dormant	100%
Investec Bank plc	Banking institution	100%
PIF Investments Limited	Dormant	100%
Beeson Gregory Index Nominees Limited	Dormant	100%
EVO Nominees Limited	Dormant	100%
Evolution Securities Nominees Limited	Dormant	100%
Investec Finance Limited	Dormant	100%
Investec Group Investments (UK) Limited	Investment holding company	100%
Investec Capital Solutions Limited	Lending company	100%
Diagonal Nominees Limited	Nominee	100%
GFT Holdings Limited	Dormant	100%
Investec Investment Trust plc	Debt issuer	100%
Investec Investments (UK) Limited	Investment holding company	100%
Inv-German Retail Ltd	Property company	100%
Investec Securities Limited	Dormant	100%
Technology Nominees Limited	Nominee	100%
Torteval LM Limited	Investment holding company	100%
Torteval Funding LLP	Financing company	100%
Kendals Regeneration Limited (formerly Nars Holdings Limited)	Property company	100%
Evolution Capital Investment Limited	Dormant	100%
Investec Investments Limited	Investment holding company	100%
PSV Marine Limited	Shipping holding company	100%
PSV Anjali Limited	Shipping holding company	100%
PSV Randeep Limited	Shipping holding company	100%
Investec India Holdco Limited	Investment holding company	80.48%
Investec Alternative Investment Management Limited	Fund management activities	100%
Investec-Capitalmind Investment Limited	Non trading	100%
NI (HH) LLP	Property company	93%
HH Farringdon Limited	Nominee	100%

*Directly owned by Investec plc.



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

211

k. Subsidiaries (continued)


At 31 March 2024	Principal activity	Interest held
Registered office: Reading International Business Park, Reading, RG2 6AA, UK
Mann Island Finance Limited	Leasing company	100%
CF Corporate Finance Limited	Leasing company	100%
MI Vehicle Finance Limited	Leasing company	100%
Quantum Funding Limited	Leasing company	100%
Investec Asset Finance plc	Leasing company	100%
Australia Registered office: Boardroom Pty Limited, Level 12, 225 George Street, Sydney NSW 2000, Australia
Investec Holdings Australia Pty Limited	Holding company	100%
Investec Australia Finance Pty Limited	Lending company	100%
Investec Australia Pty Limited	Financial services	100%
Bowden (Lot 32) Direct Pty Limited	Dormant	100%
British Virgin Islands Registered office: Palm Grove House, PO Box 438, Road Town, Tortola, British Virgin Islands
Finistere Directors Limited	Corporate director	100%
GFT Directors Limited	Corporate director	100%
Registered office: Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands
Fertile Sino Global Development Limited	Holding company	100%
France Registered office: 27 Rue Maurice Flandin – 69003 Lyon Cedex 03, France
SCI CAP Philippe	Property company	100%
Registered office: 151 Boulevard Haussman, 75008 Paris, France
Capitalmind SAS	Advisory services	60%
Germany Registered office: Sonnenberger Straße 16, 65193 Weisbaden, Germany
Capitalmind GmbH & Co. KG	Advisory services	60%



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

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212

k. Subsidiaries (continued)


At 31 March 2024	Principal activity	Interest held
Guernsey Registered office: PO Box 188, Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3LP, Channel Islands
Investec Asset Finance (Channel Islands) Limited	Leasing company	100%
Registered office: Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 1WR, Channel Islands
Investec Bank (Channel Islands) Limited	Banking institution	100%
Investec Bank (Channel Islands) Nominees Limited	Nominee	100%
Registered office: PO Box 290, Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3RP, Channel Islands
Bayeux Limited	Corporate director	100%
Finistere Limited	Corporate nominee	100%
Finistere Secretaries Limited	Corporate secretary	100%
ITG Limited	Corporate director	100%
Registered office: Heritage Hall, Le Marchant Street, St Peter Port, Guernsey, GY1 4JH, Channel Islands
Investec Captive Insurance Limited	Captive insurance company	100%
Jersey Registered office: 2nd Floor One The Esplanade, St Helier, Channel Islands, Jersey, JE2 3QA
Appleton Resources (Jersey) Limited	Holding company	100%
India Registered office: B Wing, 11th Floor, Parinee Crescenzo, Bandra Kurla Complex, Bandra East, Mumbai – 400 051, India
Investec Credit Finance Private Limited	Lending platform	99%
Investec Global Services (India) Private Limited	ITES outsourcing	100%



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

213

k. Subsidiaries (continued)


At 31 March 2024	Principal activity	Interest held
Ireland Registered office: The Harcourt Building, Harcourt Street, Dublin 2, Ireland
Investec Holdings (Ireland) Limited	Holding company	100%
Investec Ireland Limited	Financial services	100%
Investec International Limited	Aircraft leasing	100%
Neontar Limited	Holding company	100%
Investec Securities Holdings Ireland Limited	Holding company	100%
Investec Private Finance Ireland Limited	Loan credit servicing	100%
Investec Ventures Ireland Limited	Investment management services	100%
Venture Fund Private Principals Limited	Investment services	100%
Investec Europe Limited	MiFiD firm	100%


Registered office: 32 Molesworth Street, Dublin 2, Ireland
Gresham Leasing 2 Limited	Equipment rental and leasing	100%
Luxembourg Registered office: 15 Boulevard Friedrich Wilhelm Raiffeisen L-2411 Luxembourg
PDF II GP s.a.r.l.	Fund management activities	100%
Netherlands Registered office: Reitschweg 49, 5232BX's-Hertogenbosch, the Netherlands
Capitalmind International B.V.	Non-trading	60%
Capitalmind B.V.	Advisory services	60%
Singapore Registered office: 8 Wilkie Road, #03-01 Wilkie Edge, Singapore 228095
Investec Singapore Pte Limited	Securities services	100%
Switzerland Registered office: 23 Avenue de France, CH – 1202, Geneva, Switzerland
Reichmans Geneva SA	Trading company	100%
Registered offices: Löwenstrasse 29, CH-8001 Zurich, Switzerland
Investec Bank (Switzerland) AG	Banking institution and wealth manager	100%
United States of America Registered office: 10 E. 53rd St., 22nd Floor, New York, NY 10022, USA
US Multifamily GP LLC	Investment holding company	100%
Investec USA Holdings Corp	Holding company	100%
Investec Inc	Investment holding company	100%
Fuel Cell IP 1 LLC Investment	Investment holding company	100%
Fuel Cell IP 2 LLC Investment	Investment holding company	100%
Investec Securities (US) LLC	Financial services	100%
Registered office: One Carbon Center-Suite 501, 13905 McCorkle Ave. SE, Chesapeake, WV 25315
Appleton Coal LLC	Investment holding company	100%



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

214

k. Subsidiaries (continued)

Associates and joint venture holdings


At 31 March 2024	Principal activity	Interest held
United Kingdom Registered office: 8 Finsbury Circus, London EC2M 7AZ
Rathbones Group Plc	Financial services	41.25%
British Virgin Islands Registered office: Vistra Corporate Service Centre, Wickhams Cay II, Road Town, Tortola VG1110, British Virgin Islands
iMarkets (Holdings) Limited	Online trading platform	33%
Registered office: Wattley Building, 2nd Floor, 160 Main Street, PO Box 3410, Road Town, Tortola, British Virgin Islands
Templewater Holdings Limited	Holding company	50%
Guernsey Registered office: 1st Floor Tudor House Le Bordage, St Peter Port, Guernsey, GY1 1DB
Grovepoint Limited	Investment and advisory	41.9%
India Registered office: 32/1. 14th Cross, 9th Main, 6th Sector H.S.R. Layout, Bangalore, Karnataka 560102, India
JSM Advisers Private Limited	Fund management	55%
Registered office: B Wing, 11th Floor, Parinee Crescenzo, Bandra Kurla Complex, Bandra East, Mumbai-400051
Investec Capital Services (India) Private Limited	Merchant banking and stock broking	80.3%



03	Annual Financial Statements	Investec plc Annual Financial Statements 2024

PARENT COMPANY ANNUAL FINANCIAL STATEMENTS CONTINUED

215


	We supplement our IFRS figures with alternative performance measures used by management internally and which provide valuable, relevant information to readers. These measures are used to align internal and external reporting, identify items management believes are not representative of the underlying performance of the business and provide insight into how management assesses period-on-period performance. A description of the Group’s alternative performance measures and their calculation, where relevant, is set out below.
	Alternative performance measures are not measures within the scope of IFRS and are not a substitute for IFRS financial measures. Alternative performance measures constitute pro-forma financial information. The pro-forma financial information is the responsibility of the Board of Directors and is presented for illustrative purposes only and because of its nature may not fairly present the Group’s financial position, changes in equity, and results in operations or cash flows.


Adjusted operating profit	Refer to the calculation in the table below


£’000	31 March 2024	31 March 2023
Operating profit before goodwill, acquired intangibles and strategic actions	463 472	369 974
Less: Profit attributable to non-controlling interests	(1 204)	—
Adjusted operating profit^	462 268	369 974


Annuity income	Net interest income plus net annuity fees and commissions
		Refer to pages 94 and 95 .
Core loans	The table below describes the differences between “loans and advances to customers” as per the balance sheet and gross core loans


£’million	31 March 2024	31 March 2023
Loans and advances to customers per the balance sheet	16 570	15 568
ECL held against FVOCI loans	(13)	(5)
Net core loans	16 557	15 563
of which amortised cost and FVOCI (“subject to ECL”)	15 916	15 012
of which FVPL	641	551
Add: ECL	187	146
Gross core loans	16 744	15 709
of which amortised cost and FVOCI (“subject to ECL”)	16 103	15 158
of which FVPL	641	551


Cost to income ratio	Refer to calculation in the table below


£’000	31 March 2024	31 March 2023
Operating costs (A)	656 599	598 966
Operating income	1 206 066	1 035 692
Less: Profit attributable to non-controlling interests	(1 204)	—
Total (B)	1 204 862	1 035 692
Cost to income ratio (A/B)^	54.5%	57.8%


Coverage ratio	ECL as a percentage of gross core loans subject to ECL
Credit loss ratio	ECL impairment charges on core loans as a percentage of average gross core loans subject to ECL
Gearing ratio	Total assets divided by total equity
Loans and advances to customers as a % of customer deposits	Loans and advances to customers as a percentage of customer accounts (deposits)
Net interest margin	Interest income net of interest expense, divided by average interest-earning assets
		Refer to calculation on page 94 .
Return on average assets	Adjusted earnings attributable to ordinary shareholders divided by average total assets excluding assurance assets
Return on risk weighted assets	Adjusted earnings attributable to ordinary shareholders divided by average risk weighted assets

^ This key metric is based on the pro-forma income statements on page 10.



	ALTERNATIVE PERFORMANCE MEASURES	Investec plc Annual Financial Statements 2024

ALTERNATIVE PERFORMANCE MEASURES

216

Cash and near cash

Includes cash, near cash (other 'monetisable' assets) and

central bank cash placements and guaranteed liquidity

ECL

Expected credit loss

Funds under management

Consists of third party funds managed by the Wealth &

Investment business, and by the Property business (which

forms part of the Specialist Bank) in the prior year

FVOCI

Fair value through other comprehensive income

FVPL

Fair value through profit and loss

Legacy business in the UK Specialist Bank

('Legacy')

Legacy, as separately disclosed from 2013 to 2018, comprises

pre-2008 assets held on the UK bank’s balance sheet, that had

very low/negative margins and assets relating to business we

are no longer undertaking

Net-zero

Balancing the amount of emitted greenhouse gases with

equivalent emissions that are either offset or sequestered.

Ninety One and Ninety One group

All references to Ninety One and Ninety One group refer to

Ninety One plc and its subsidiaries plus Ninety One Limited and

its subsidiaries

Ongoing basis

Ongoing information, as separately disclosed from 2013 to

2018, excludes Legacy assets (refer to definition), as well as the

following businesses sold in previous years: Investec Bank

(Australia) Limited, Kensington Group plc and Start Mortgage

Holdings Limited

Strategic actions

Comprises the closure and rundown of the Hong Kong direct

investments business and financial impact of group restructures

Structured credit

Reflects the gross exposure of rated and unrated structured

credit classified within other debt securities and other loans and

advances on the balance sheet.


	Refer to page 187 for detail.

Subject to ECL

Includes financial assets held at amortised cost and FVOCI



	DEFINITIONS	Investec plc Annual Financial Statements 2024

DEFINITIONS

217

The following abbreviations have been used throughout this report:

AGMAnnual general meeting

ALCO Asset and Liability Committee

AT1 Additional Tier 1

BCBS Basel Committee of Banking Supervision

BCRBanking Competition Remedies Limited

BIDBelonging, Inclusion and Diversity

BoE Bank of England

BRCC Board Risk and Capital Committee

BRRDBank Recovery and Resolution Directive

BSEBotswana Stock Exchange

CAChartered Accountant

CAMCombined Assurance Matrix

CCBCapital Conservation Buffer

CCyBCountercyclical Capital Buffer

CDOCollateralised debt obligation

CDS Credit default swap

CEOChief Executive

CET1Common Equity Tier 1

CFPContingency Funding Plan

CLOCollateralised loan obligation

CLRCredit Loss Ratio

COOChief Operating Officer

COVIDCorona Virus Disease

CPIConsumer Price Index

CRD IVCapital Requirements Directive IV

CROChief Risk Officer

CRR Capital Requirements Regulation

CRSCommon Reporting Standard

CSACredit Support Annex

CVACredit valuation adjustment

DCFDiscounted cash flow

DFMDiscretionary Fund Management

DLCDual listed company

DLC BRCCDLC Board Risk and Capital Committee

DLC NomdacDLC Nominations and Directors

Affairs Committee

DLC RemcoDLC Remuneration Committee

DLC SECDLC Social and Ethics Committee

EADExposure at default

EBAEuropean Banking Authority

ECEuropean Commission

ECLExpected credit loss

EIREffective interest rate

EPEquator Principles

EQAREngagement Quality Assurance Review

ERVExpected rental value

ESExpected shortfall

ESGEnvironmental, social and governance

EUEuropean Union

EVTExtreme value theory

FATCAForeign Account Tax Compliance Act

FCAFinancial Conduct Authority

FINMASwiss Financial Market Supervisory

Authority

FPCFinancial Policy Committee

FRCFinancial Reporting Council

FSCSFinancial Services Compensation Scheme

FUMFunds under management

FVOCIFair value through other comprehensive

income

FVPL Fair value through profit and loss

GDPGross domestic product

GDPRGeneral Data Protection Regulation

GFSCGuernsey Financial Services Commission

GMGuinness Mahon

GMRAGlobal Master Repurchase Agreement

GMSLAGlobal Master Securities Lending

Agreement

Group ERC Group Executive Risk Committee

GRRRMFGroup Risk Review and Reserves

Matters Forum

HNWHigh net worth

HRHuman resources

HQLAHigh quality liquid assets

IAMInvestec Asset Management Limited

IASsInternational Accounting Standards

IBLInvestec Bank Limited

IBORInterbank offered rate

IBPInvestec Bank plc

IBP BRCCIBP Board Risk and Capital Committee

IBP ERCIBP Executive Risk Committee

IBP Review ERRFIBP Review Executive Risk Review Forum

ICAAPInternal Capital Adequacy

Assessment Process

IFAIndependent Financial Adviser

IFCInternational Finance Corporation

IFRICInternational Financial Reporting

Interpretations Committee

IFRSInternational Financial Reporting Standard

IIAInstitute of Internal Auditors

ILAAP Internal Liquidity Adequacy

Assessment Process

IRBInternal Ratings Based

IRRBBInterest Rate Risk in the Banking Book

ISDAInternational Swaps and Derivatives

Association

ITInformation technology

IW&IIInvestec Wealth & Investment International

Group

JSEJohannesburg Stock Exchange

LCRLiquidity Coverage ratio

LGDLoss given default

LHSLeft hand side

LIBOR London Inter-bank Offered Rate

LSELondon Stock Exchange

LTILong-term incentive

LTVLoan-to-value

MDRMandatory Disclosure Rules

MLROMoney Laundering Reporting Officer

MRELMinimum Requirements for Own Funds

and Eligible Liabilities

MRTMaterial Risk Taker

NCINon-controlling interests

NSFRNet Stable Funding ratio

NSXNamibian Stock Exchange

NZBANet-Zero Banking Alliance

OCIOther comprehensive income

ODOrganisation development

OECDOrganisation for Economic Co-operation

and Development

OTC Over the counter



	GLOSSARY	Investec plc Annual Financial Statements 2024

GLOSSARY

218


	Alternative performance measures We supplement our IFS figures with alternative performance measures used by management internally and which provide valuable, relevant information. These measures are highlighted with the symbol shown here. The description of alternative performance measures and their calculation is provided in the alternative performance measures section.

	Page references Refers readers to information elsewhere in this report.

	Website Indicates that additional information is available on our website: www.investec.com

	Group sustainability Refers readers to further information in the Investec Group's 2023 sustainability report which is published and available on our website: www.investec.com

	Reporting standard Denotes our consideration of a reporting standard

	Unaudited information Indicated information which has not been audited.

	Integrating sustainability Indicates where we have incorporated sustainability content, aims and ambitions.


4	Our business at a glance

5	Overview of the Investec Group’s and Investec plc’s organisational structure

6	Overview of the activities of Investec plc

9	Salient features


	www.investec.com/en_za/ welcome-to-investec/about-us/ investor-relations.html



01	Contents	Investec plc Annual Financial Statements 2024

CONTENTS



	GLOSSARY	Investec plc Annual Financial Statements 2024

GLOSSARY CONTINUED


	Contact details for all our offices can be found on the group’s website at: www.investec.com


For queries regarding information in this document
Investor Relations
Telephone	(44) 20 7597 5546
	(44) 20 7597 4493
Email	investorrelations@investec.com
Website	www.investec.com/en_gb /welcome-to-investec/about-us/ investor-relations.html



	CORPORATE INFORMATION	Investec plc Annual Financial Statements 2024

CORPORATE INFORMATION