Investec Group

People look at results and from time to time we forget that the results are really an outcome and in our case a validation of what we do for our clients. So before I start, let me just thank all my colleagues for the contribution they make in looking after our clients. Because we're going to be talking a bit more today about our growth plans in the second half of this presentation, I thought to start off with our strategic positioning. As you know, we have always been a business that is not everything to everyone. We have select clients that we serve in fairly narrowly defined positions. And it is really important as we embark on a path of growth that you understand that we will be evolving naturally the model that we have been following all the time. As you know, our model is based on the fact that we support our client on their journeys, both as personal clients and as business clients. And we tailor solutions to the needs that they have. And these solutions are delivered with a high touch and a level of service that we generally refer to as out of reach. the ordinary. So as we think about the next number of years going forward, that is the lens through which we will look at what we are trying to do. We're very pleased with these results, given the environment that we're operating in today. And as a business, as we look forward, we have a level of excitement, enthusiasm, and energy that we can do more for our clients. And we will have the opportunity. in the second half for some of my colleagues to present on our offering to the corporate mid-market. Really excited to hear what they will have to say. At the final year results in May next year, we will present our proposition to enhance our offering to our private clients. You know that we presented a comprehensive strategy for growth in May. We are now starting to unpack elements of that strategy and hopefully you will find that interesting and meaningful. As the last point on the slide shows, this is a business focused on building. No, no, this is still the slide. I'm still on the same slide. Is this what is on the screen? See, I've got two slides in front of me, and I'm talking to the right-hand side of my presentation. So the last point on that screen, which is what I'm talking about in terms of our strategic positioning, relates to the posture of our business for the next three to five years, a business dedicated to disciplined growth. OK, Nish, I'm going to do this now. Click. Good. Nish is going to take you through the results in great detail, but I would like to give you some basic highlights on these results and some key takeaways. We are very pleased that we are reporting a growth in adjusted earnings per share of 2.5% to 40.5%. We're also quite pleased that we've seen significant activity in our clients and this is evidenced by the growth in net core loans and advances, the growth in deposits and the growth in funds under management as represented by the second set of graphs. So our client franchises are deep and our earnings are diversified in nature. Capital generation has continued to be strong, and this enables us to reinvest in the business. The reinvestment, for instance, in our corporate mid-market franchise, the reinvestment in our platforms, as we modernize our state, is but an example of the strong capital generation that we have, and in addition, we are able to reward our shareholders with distributions. You will know that in this period, The board has declared a dividend per share of 17.5 P, and we also have undertaken a significant portion of the share buyback program that we announced in May. So capital generation is really quite important. And the last set of graphs on the right show that our return on equity is is well anchored within our medium term targets. The presentation today will talk about how we move from circa 14 to the top end of our range of 13 to 17%. If you look at the next slide, our pre-provision adjusted operating profit is slightly behind at 527.4 million pounds. As I've indicated, we have very good client activity, so our net interest revenue was very strong in this period, but we had the effect of lower interest rates on our endowment and so our net interest income was negatively affected by that. As indicated, we are also investing heavily for growth as we move forward. Our cost to income ratio at 51.9% is below our indicated range of 52% to 54%. As we look forward, we've indicated to the market that we expect to be in this range, even though we will continue to invest in people and technology, firstly to support our current revenues, secondly to transform our operating platforms, and thirdly to invest in the growth initiatives that we have spoken about in May. Our credit loss ratio at 35 basis points is, through the cycle, target range of 25 to 45 basis points, even though interest rates from where we stand are still relatively low. We would expect over the next 12 to 18 months that we will see a continued reduction in interest rates, even though that may be at a pace that is slower than we would like. Very happy with the return on tangible equity at 15.7%. And of course, the increase in a tangible net asset value per share of 7.4% is very pleasing in our view. I'm not going to talk to this slide on our commitment to our path to net zero by 2050. As expected, you don't have changes in this particular slide from period to period. This is a long-term commitment to what's reducing fossil fuel exposures, driving sustainable and transitional finance activities, and promoting within our client base. a movement towards being more sustainable. So you shouldn't expect changes on this slide at every reporting period, but it is important that we indicate that we remain committed to our path to net zero by 2050. Now to unpack the results, I'm going to ask Nishlin to take us through the rest of the results presentation and I will close off at the end, Nish. Green is for next. The slide on the right is the next slide.

We got it. Thanks, Fani. I'm just going to spend a little bit of time to give you some of the context that we operated in, give you some detail about how we've performed geographically as well as across our businesses. So if we start with the context, and we had a debate when we produced the slide as to exactly how you calibrate 1.5 and 1.1%, because these numbers are still relatively low in terms of growth. But I think that the direction is extremely important. If we look back into 2024, we were all talking about the election environment and the fact that most of the world will be in a state of flux, in a state of change. And I think we're through that particular cycle, but the consequences is what we continue to live out. And those consequences has a bearing on how these projections actually move out over time. And it does really feel like we're moving into territory where that's becoming a lot more clearer, albeit that there are still pockets and pockets and pockets of uncertainty that sits in the system itself. Interest rates, interestingly, have been on a path that's reducing. And if we spoke to you, again, a year ago, we would have probably have expected these graphs to have a sharper line down. And that's not the reality, because at the end of the day, some of those uncertainties, and particularly the implications around inflation, has been tightly managed across the world. But that being said, we are definitely in a reducing interest rate environment. And in fact, from a South African perspective, the debate around setting the inflation target closer to 3% with a 1% flex around those numbers really will encourage these numbers to get towards 8% from a South African context. Now, I'm not sure when we last heard those sort of numbers in a South African context. The rates have been coming down from a UK perspective, but probably similar to South Africa, yes, we see it down by a percent year on year, but that rate of reduction is still relatively slow. And it's because of these things, you know, we continuously have indicated that interest rate reductions will have a negative impact on our earnings in the short term. But as a business, we encourage and we really want to see a lower interest rate environment. And hopefully what you will see in these results is the momentum that gets introduced, particularly in the non-interest revenue lines as we go through the detail. If we look at exchange rates, the RAND had a negative impact on our income statement as the average rates were a bit weaker in the period. And in fact, from a balance sheet perspective, it had a positive impact because the closing rates were a little bit stronger over the period. And off late, I think the RAND has seen good support, particularly if you think that that economy has now come off the gray list. The fact that we've seen an upgrade from Standard & Poor's, an upgrade that we hadn't seen for 16 years. And that turn, I think we should not underestimate. From a markets perspective, I draw your attention to the March 25 that you see on this schedule. And that's really where we opened this financial year, with relatively weaker markets at the beginning. And since then, we've seen strong growth in markets. And you will see that in our AUM. But what we are also highly encouraged by is the record flows that we continue to see into our platforms, particularly in South Africa. Now, looking at our earnings drivers, AUM for our wealth business in South Africa is up 13.4%. Yes, 11.3% in neutral currency, and that's supported by net inflows for this first six months of 11.5 billion rand, a significant number. We also have acquired a few aspects and bolstered our Swiss platform, and that's added 5.2 billion rand of AUM and net inflows. Clients continue to manage their money, so from non-discretionary funds, we do continue to see some volatility in that. Ratbones reported £113 billion of AUM, and that's really supported by stronger markets. They had net outflows, I think it was around about £0.2 billion, but The business has been focused on the integration, and I think from our perspective, we see a business that has now really gone through the bulk of that and should shift to the front foot, focused on markets and focused on flows. Net core loans grew by 8%. And I'll unpack that by geography on the right-hand side. And it's quite pleasing to see the green arrows around that particular wagon wheel. It's not a perfect market yet. And it remains a highly competitive market in a low growth environment. And it's in this context that we produce these numbers. And that is also supported by the fact that we continue to grow our client pools and we continue to penetrate markets deeper, but really holistically focused on what Fani has highlighted, which is to be pinpointed in terms of where we execute our efforts. Now, Hugh, you reminded me of how this slide starts, so let's get it done. Adjusted operating profit was down 1.4% in the period. And let's look at what's driven that particular outcome. We see that net interest income is reduced by 2.1%. And again, when we speak of the short term, this is the impact that you will see in the six-month measurement, is that low interest rates in both South Africa and from a UK perspective has had a negative impact. However, in certain instances, we've managed to navigate that really supported by the fact that we continue to see book growth across our platforms, albeit at competitive margin levels, as well as improving the cost of money across our businesses. Non-interest income has largely neutralized that drop in net interest income, and that has been supported by strong fees and good investment income over the period. And that's momentum that is coming to the system, as well as the fact that we've seen stronger advisory fees in this particular period. Our impairment charge has dropped from 42 basis points last year to about 35 basis points in this period. I would say the real outcome is a very similar position to what we saw at the end of March. Asset quality remaining robust across our businesses. We do have some experience specific impairments, but we don't see any trending in any of our portfolios that causes any particular concerns for us. I think as we introduce our strategies around, for example, corporate mid-market, we are very mindful of the fact that in that particular market you may have higher levels of impairments supported by higher margins. And at the end of the day, we will talk about those probably next year when we unpack some of that detail. Operating costs is up 1.5%. So you may think that we've really, really cut our costs. But the reality is that when I unpack the detail around that, firstly, variable remuneration is lower in both geographies. And that's a function of determining the variable remuneration based on economic return. as well as the competitive environment that we operate in, but really following profitability in the different businesses itself. Fixed costs are actually running well ahead of inflation, and I'll get into some detail around that. And the way we look at fixed costs is, what does it cost us to run the business as it stands? And those costs are running at around about 1% to 1.5% ahead of inflation as we absorb some of the costs that have come into the system in both geographies as well as other service costs and the fact that we've, although tightly managed headcount, we still have increased headcount to service the business overall. And I'll unpack that for you in some detail. And the second area that drives costs is really the implementation of systems and processes that will support our growth initiatives. The third area is to continue to build resilience in our business and to continue to enhance and modernize our platforms. Those are the three areas that we continuously monitor across the business with the cost to income ratio at 51.9 percent. From a technology perspective, one day Lyndon will present this and I'll get over the nervousness. But at the end of the day, it comes back to what we said. We continue to modernize our platforms and a lot of that modernization is actually in the run rate. We've given you a range of our cost to income ratio of between 52 to 54% and we remain confident that we will maintain the run rate around that. We have very low capitalized software. And some may criticize that as the fact that we may be transitioning at a slower pace. And you will see that number pick up as we invest in our platforms. But again, not an overly material number on our balance sheet. Our overall technology spend at 20% of operating expenses, we think, is on par with the market. Yet we continue to invest in our platforms, modernize those, and remain extremely mindful in an environment where AI becomes a lot more relevant. The counterbalances around things like cyber and the rest of it become more acutely important for us to keep a handle on. So getting into the divisional reviews, from a geographic perspective, we have produced 230 million pounds from our UK business for this half. You will see that our contribution from rat bones appears significantly up at 18.2%. And that is a function of the fact that the business has achieved synergies of around about 60 million pounds of run rate in this period. However, if I take you back to markets, we started off with a very weak first quarter. And that was reflected in lower revenue for that particular business in their six months that was reported to the end of June. However, we have increased our accrual on the business because although their total shares in issue, we have effectively around about a 41.25% interest, there's a portion of those shares that are held within Rathwellns that are not yielding dividends and therefore should not be included. In fact, if you take our number of shares and multiply it, operating EPS we get to a cruel rate of around about 43% and we have some catch-up in this period which is accounted for just under around about 4 million pounds in that number the specialist banker will get into some detail net profits really in line with the prior year group investments represents the dividend on the sort of 10% stake that we hold on 91 With 91 effectively combining with the Sunlum platforms, we expect that stake to drop to about 8.5% on the bigger platform itself. That business announced their results recently and have grown their dividends by 11% year on year. Group costs are down. As we indicated, it will reduce to some extent. And we think it's at levels where that probably operates at. Looking at the specialist banking business, yeah, we did see net interest income reduced by 5.8%. That's in the context of strong growth in terms of our lending books, but the decrease in interest rates in the short term will have a negative impact. When you look at the market, some of the banks have defended that well in this particular cycle because of the larger structural hedges that they have in play. But our mix of our deposit base, we are not in a position to have those levels at this particular position. Non-interest revenue grew by 11.4% in the period, really underpinned by strong growth in fees. To some extent, low opportunities from balance sheet management and other trading activities. And again, hopefully you are seeing the introduction of momentum into the business in those lines, as well as seeing higher listed advisory fees in the period. Our cost-to-income ratio is marginally up at 53.3%, with fixed costs growing at 7.3%. As I've indicated, our run costs have probably increased by around about 4.2% to 4.3%, and the differential is the cost that we are incurring as we continue to invest into our platforms. And looking at the credit loss ratio for this period, it's at 56 basis points. We think it will remain in that sort of ballpark as we look forward to the year end, as we still see the impact of interest rates that that has on these higher levels. But as you can see from our staging, the book has remained relatively stable. over the period and have clearly indicated that we see no trending to call out to you guys. I've really unpacked Rathbones from an earlier conversation, but these are some of the key numbers and I think it's worth calling out that the business remains focused on delivering a trajectory towards a 30% operating margin by the end of 2027 financial year. Now moving on to South Africa, here we see total operating profits reducing by 2.6% to 5.7 billion rand. And if I unpack the numbers, you can see where the sensitivity in that reduction is in group investments. And that's really a listed stock that has gone up and down in these markets. Overall, you will see that the group investments layer will continue to be less relevant as we continue to realize at value those remaining investments. The Walton investment business grew by 2.1% and the South African specialist banking business by 2.6% with group costs remaining relatively steady. Unpacking the specialist bank, here we saw net interest income increase by 6.5% in the period, really a function of continuing to challenge the cost of money and the cost of deposits. And to some extent, we are starting to see good momentum in our corporate mid-market deposit gathering. capability, which will continue to enhance the net interest margin in that particular platform, as well as the increase in core loans and advances. But we had to absorb, obviously, lower interest rates on our net surplus cash positions that we hold. Non-interest revenue decreased by 2.1%, and that's really a factor of lower trading income and lower client flow income in this particular period, offset largely by higher fees for reasons that I've already effectively identified, and that is increased activity. in our equity capital markets advisory activity, as well as in the private banking business itself. In this business, investment income has held up relatively strongly. The cost-to-income ratio is also slightly up at 47.4%, but well within the 49 to 52% that we indicate as the long-term sort of level that this business operates at. Year operating costs grew by 10.2%, and from a run perspective, those costs have grown by about 5.8%. absorbing inflation, absorbing a weaker RAND, and the fact that you also do have some foreign-denominated cost in this particular area. The differential, again, being supported by areas of focus on implementation of strategy. The credit loss ratio is at 12 basis points, so it remains relatively low, and that talks to the quality of the book and the experience of the underlying book. Again, if we look at the staging, the fact that we have seen some curing of stage three assets in the current period, talking to the fact that the quality of the book remains very robust. We are very proud of the performance of the wealth business in South Africa. The business continues to have a very strong and high integration with the private banking business in South Africa and that's really our private client offering in that market. Distinctly positioned with our offshore capability and the fact that we are deeply servicing that particular market. I think the operating margin is slightly tighter, but still very healthy at 30.5%. This slide we debated on whether we should pull it, because there's a few red blocks on this slide. But hopefully you can see at the bottom of the first two red blocks, they're actually green in red. And that's really the impact of the slightly weaker exchange rate in the period and group investments will continue to become less relevant but with some volatility because we have a listed position in that. And from a UK perspective, underlying profit growing by 3% and in fact closer to 9% when we factor in tax and the cost of 81 instruments as we've removed some of the double cost that was in the system last year, having redeemed some of those instruments. Return on equity and return on tangible equity remaining market comparably strong across the businesses. This is for one of the analysts that asked us to reconcile operating profit to adjusted earnings. And again, I've called out the factors that apply, so I'm not going to spend too much of time on it. And that's a summary of the numbers that we've spoken about. And you can see that our average allocated equity at five billion pounds. So that's me. Well, one more slide, finally. Two more. Net asset value and tangible net asset value on the next slide, but Fani has gone through that detail. And the last point I'll talk about, Fani, it's now your time, is that capital has remained robust. We have adopted BAL 3.1 in South Africa, and we'll see those capital ratios come down a little bit by about 2028, but we maintain high levels of capital to absorb those, and from a PLC perspective, the ratios are extremely healthy.

Now it's time for you. Thank you, Nish. You can see that Nishlin is playing some games with me. He says he's done, and when I stand up, he says he's not done. I hope in the presentation you have taken away the sense of a business that is performing as we expected in these markets at a headline level as initially indicated. No, no, I'm okay, Q. Thank you. At that level, we have had a relatively strong NIR performance. The effect of lower interest rates and continued investment in our business, as we indicated, to support current revenues, to support the modernization of our estate, and to support the growth initiative. So for us, We feel that we're building for the long term and we're excited about that as a path going forward. So as we look forward to the full financial year, we will expect the performance in the second half to be generally in line with the first half performance that we have reported here. We still operate in a tale of two cities, the South African Economy is in a slightly better state, as Nishlin may have indicated. Growth forecasts are being revised upwards. We've seen a credit rating upgrade, albeit that we are still two notches below investment grade, but the direction is great. We have seen the removal of the country from FATF, the so-called gray list. And as the country hosts the G20, we have seen a greater interest in intra-Africa trade. and the commitment by the leaders to open borders and to facilitate more trade. So that economy is looking a little better. In the UK, while the economy is still constrained, given some of the uncertainty around the fiscal space, and in fact we are waiting with bated breath, the budget speech by Rachel Reeves next week, we still see a higher level of uncertainty. What we need, obviously, will be policies that support growth and investment. And obviously, policies that do not punish those that are successful and are creators of wealth. That is what we would hope for. What we get is that, obviously, is what we're all waiting for. So given that macro... economic picture in the two largest geographies, we do expect that ROE for the full year will be at around 13.7%. As I said, in line with the current ROE, SA will be at around 18.5%. We have a target range of 16% to 20%. For SA, for the group, we have a target range of 13% to 17%. And for the UK, we will expect ROTI to be around 13.6%. Initially, we have spoken quite extensively about costs We do expect that despite the investments we're making, we should still be coming through in the 52% to 54% range. Credit loss ratio still to be within our through-the-cycle range of 25 to 45 basis points. Again, as Nichelin indicated, we would expect this to improve as we rates continue to go down, client activity increases. So essentially in a diversified model where you have net interest headwinds, you would expect over time that client activity should improve and that your credit loss ratio equally should improve. And obviously we have significant wealth businesses that contribute non-capital intensive revenue. So we're well positioned to manage the complex external environment. And in addition, we are committed to supporting our clients as they navigate the uncertainty that is in the economic environment. So in conclusion, we remain excited about how tightly our business is focused in the client segments that we target. We are excited about our continuing entrepreneurial culture where we can flexibly serve our clients in a tight environment. And our clients are resilient. They have scale and, sorry, our client franchises are resilient and they have scale. So as we continue to invest and build, we would expect that we will see even better scale. I spoke about the strong generation of capital to continue to invest in our business and to continue to reward our shareholders with distributions. The presentation that will come shortly is a presentation about the future, about the investments we're making, and about how we're expanding our overall franchise. As Jane Neely said last night when we had a leadership meeting, the business is focused on what we can build. The external environment is what it is. We have to back ourselves to execute on the on the opportunities that we have ahead of us. On that note, that's the presentation. We're happy to take questions. I think we will start off here in London. Is that the way we do with Q? Q has been conducting how we go about, so I have to look at him for instruction. Any question from London? Okay, seems like we don't have a question here. So we'll go to Johannesburg where Kumesh is holding fort. Kumesh has been whining and dining precedence and the high heels. So Kumesh, if you can be with mortals like us for about 40 minutes or so. Any questions from Joburg?

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

Thanks, Kamesh. I am tempted to give a chance in London again, but Stephen advised me some time ago, don't over-offer opportunities for questions. So in respect to the elders, I will bring this particular presentation to a close. One line. Okay, no questions in London, though, so let's see what we have online before we close. Don, do we have anything online?

Finally, we have a few questions online. The first question is from from Mergent's investment managers. Good morning. Could you please comment on the reports this week that Investec would be partnering with PEPCOR to help it with launching banking services across its store footprint? Is the SA retail banking strategy pivoting towards being more mass focused?

I have tried throughout this presentation to indicate that we remain a niched player. We have select client segments that we serve. And as we go into the next presentation, you will see why that is the case, that we can win in the corporate mid-market because we are not trying to be everything to everyone. So in short, we do not have any agreement executed with anyone and we will not comment on any of our clients and any discussions that we may or may not have as we go forward. Needless to say, inclusion Financial inclusion within a South African context is something that a lot of players are worried about, and we continue to see what role we can play in that market, but nothing of significance. I understand that the client you're talking about has also said categorically that they are not in any such bank partnership.

Thank you. Thank you. The next question is from Baron Ngomo from JP Morgan. Customer deposits increased by 3.6% annualized. Please discuss your funding strategy both in South Africa and the UK going forward, especially in light of the changing interest rate environment.

Okay, I'm gonna ask Kumesh and Ruth. They've had such an easy ride today, so they're gonna have to answer. Let's just say it quickly this way. One of the critical reasons why we want to go into the corporate mid-market is also to expand our deposit franchise and have access to transactional deposits. We have been gathering retail deposits. at a significant pace, and within the South African environment, we have been improving our liability mix, reducing reliance on corporate deposits, and obviously getting a much more optimal funding base. That's why as much as interest rates have decreased there, if you do more work on our margin, you will see that we've been able to defend some of that margin. And in the UK, we have a wide a distribution network in terms of how we access deposits. But let me leave it with Ruth first and then Quimesh next.

Good morning, everyone. Thanks very much, Fani. We are always looking to optimize our overall cost of funding. You will have seen, if you look through the analyst book this morning, that our loan-to-deposit ratio looks very healthy at around 81%. In the recent period, we have repaid our TF-SME, and that's why you see the level of deposits where it is. We are seeing the overall cost of deposits reducing as interest rates are coming down and we'll constantly be looking for opportunities to reduce our overall cost of funds. Very comfortable with where we positioned our funding, continue to keep our sources well diversified in multiple different markets and the Investec brand has very good traction in the UK deposit market. Thanks, Ruth.

Thanks, Fani. I think you, just in your opening, you covered a fair bit of the deposit strategy in South Africa and funding strategy in South Africa. I think, safe to state, in the period under review, we were able to grow our non-wholesale deposits by close to 10%. and that's part of a very clear funding strategy to continue to grow retail deposits and continually balance that against wholesale deposits. So I think our funding channels, particularly in our private bank and other areas, including our corporate cash management channels, have all been quite successful in raising retail deposits. We're excited about what can be achieved in the corporate mid-market over a period of time, and we've already started to see how that business is getting onto the flywheel of deposit raising. So, a very clear strategy in South Africa. The team have been working on it extensively over the period to continue to ensure that we have the right balance of funding mix to support the growth of the business going forward.

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

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

Okay, thank you. The question is probably not as accurate as it has been stated. If you look at the full year cost-to-income ratio to FY25, our cost-to-income ratio was 52%. So the current 51.9 is actually in line and in fact better. Of course, relative to the September number last year, which was about 50.8, if memory serves well, it looks like it has increased. So we're very comfortable with where that number is and our efforts to continue to run efficiently. Nishlan tried to explain The three areas of cost, one being the normal run, where we are just over inflation, and then the investment in the modernization programs. We would expect that in the modernization program, quite a significant bulk of those investments should be done in the next three years or so. And the other will be probably two to three years thereafter. So the benefits will obviously come as you implement those investments and you complete them. And in some cases, you then do not run a parallel infrastructure. And obviously, with respect to the investment in the mid-market. We've given you a sense, and we will unpack it, of what levels of revenue we may expect to achieve by 2030. And in the case of the UK corporate mid-market, because South Africa is a number of years ahead in terms of implementation, we will give you both a 30 view, but an FY32 view, just to give you a sense of the returns we hope to get from these investments. We run a highly disciplined process of investment, well-governed by both the executive and the board reviews that on an ongoing basis. And as Nichelin indicated, we have a very low level of capitalization on the balance sheet in terms of technology. I think the number is 8.6 million pound or so. And as we go forward, given the investment, that number may increase. And again, initial words, non-materially, from the perspective of the overall balance sheet. Next, Donald.

Thanks, Fani. The next question is from Chris Stewart of 91. Can you give an update on the cleanup of the South African group investment portfolio, please?

We're really at the tail end of that process. As Neslin indicated, that number is getting to be non-material as we go forward. We have two or three investments. The largest investment Investment, you will know Chris, and we continue to work with our co-shareholder there to find ways in which we could achieve our goals. The other smaller investments, some of them are in process, but we are not duly concerned about it. It's really something that is almost out of the system. That's why Nishlim says that number is getting smaller and smaller and largely irrelevant. Chris, you must be happy about that table Nichlin gave you, which has the cost of 81. So Nichlin was referring to Chris. So now that he's online, I can talk to him.

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

We've indicated that the environment continues to be constrained. I talked about a tale of two cities where, from a South African perspective, the sentiment in the economy is better. Some upward revisions in the expected growth over the medium term. Clearly the UK, there is still a higher level of uncertainty, even though the opportunity for us remains quite significant. We've tried to explain the trade-off between net interest income impact as rates come down and the activity that we see, the increased activity that we see amongst our clients and over time as those rates go down, an improvement in the credit loss ratio. So that is the interplay. between those two. We are not concerned about what, in our view, is a marginal decrease, about two or so percent in that roti. And from a market context, we remain very competitive, as Nishling said.

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

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

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

We have a strongly performing wealth business, 13.4% increase in funds and management, 11.5 billion net inflows in rents. So our outlook on that score is positive. Thanks, Kumesh. Should we take just one last? How many more questions do we have?

We have one last question, Fani. The last question is from Jared Houston of All Weather. He asks, why has the progress on the share buyback program been slow?

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

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

Thanks, Don and Kumesh. And to everyone that's attended, thank you for your attention. And in particular to the analysts, thank you for your interest. As usual, we are available for more in-depth interaction on the results to provide more depth and color on the different aspects of it. We're going to now take how much time? Q? about 10 minutes, if we could be back at the top of the hour. So in London, that'll be 10 o'clock. And in South Africa, that'll be 12 o'clock. And we're really excited to show you what we are building on the corporate mid-market side. Thank you very much, and see you in about 10 minutes. Well, good morning again. It's noon in South Africa, actually. It's always lovely to see the zebra gallop. And it is really appropriate for this next stage of the presentation because we are front-footed, excited about growth, and energized to execute. I'm talking to the slide on the left, just to make sure that I've got my orientation right. Just to start off, as you know, we are on a journey of discipline growth. and we will cover but one element of the journey, and we will give you a sense of how that plays into the overall strategic path over the next five years or so. I will be joined on the stage by Nick Riley, our head of corporate mid-market in SA, and Andy. I don't know how it happened that we all have the same ties, but... Let that be. So I'll give a brief overview of why this segment is both relevant and important for our journey as we go forward. And starting off, I will not repeat our strategic positioning, other than to say that the whole organization is energized behind the objective of growth. And this is one element of that story. We started this journey in 2019, and we had a CMD presentation, if you remember. in early 2019 where we said to the market that we would like to achieve at least a 200 basis point improvement in the performance of the businesses measured by ROE. And the key planks in that plan were that we would look at capital allocation particularly strictly with the intention of generating returns above the cost of capital. So as a consequence, we exited a number of businesses, either because our risk appetite was a bit narrower or because we could not gain scale in those businesses. And while the restructure was an important part of what we did, we also invested in a U.K., private banking proposition. You may remember that at that time we were losing about 30 million quid a year on that proposition and we decided to make an investment and we have been able to execute on that growth plan. So as we engage on another a fresh investment into an area we are encouraged by the past successes over the last number of years. So we embark on this process with a lot of confidence about what the business can achieve. In May, we laid out a strategic path for the next five years or so. Just to go over it quickly without too much talk on it, the first idea was that we wanted to grow our existing client franchises, so we sought to deepen our franchises, we sought to scale them a lot more, and of the 200 basis points that we sought to to gain in the upliftment of our ROEs, half of that would come from the scale and the leverage coming out of our franchises. The second area of work was the corporate mid-market, and we will talk about that later today, so I wouldn't say much. The third was the expansion of our private clients' capability. We have an international franchise. We have, as we discussed earlier today, a leading franchise in South Africa, which is international. We have a capability in Switzerland, so on and so forth. And we have a strategic positioning in Rathbones post the combination of investor growth and investment in Rathbones to gain scale and capability. So in May, we will give you a sense of how we will go about that. And then we also said that we will continue to exercise discipline in how we go about our business. Capital allocation would be important. And one plank that was really important at the time, we said we would like to increase the proportion of non- interest revenue and in particular wealth related revenue and we gave you a number of about 35% and we were specific that to achieve that objective we will definitely consider inorganic growth. And the last element of that strategy was that we would intensify our efforts around creating a single organization that is client-centric, where we deliver for our clients holistically and our operating platforms will be such that we can support that single organization that is client-centric. We've talked quite a lot about the investment we are making in these platforms. Just to move forward, why would we go into this space? And some people would say it's late in the day. Some would say it's a highly competed for segment of the market. The reality is that we already have a significant presence in the corporate mid-market. Nick will go through the work we've done over the last number of years in South Africa, the level of revenues we are already generating, about 1.7 or so billion rand, and the number of clients we have there. So this is an expansion of our capabilities to more fully service our clients in the mode of one investor. In the UK, as you know, we've built a pretty good corporate mid-market capability, and we do a lot with our clients in that space, but we do not offer transactional banking and the fullness of the offerings that we have. So if you look at Investec and where we are, leading private clients business, as we've spoken about, equally a leading corporate and investment banking business in the markets that we operate in, and we already have a number of clients in the corporate mid-market, and we think it is time for us to to get into the sector and to gain market shares that would appear small relative to others, but they would be consistent with our approach of niche markets and high levels of service and high value propositions. So it's really important to understand that we're not trying to go very wide and deep into the market. We will still follow our DNA of select client segments, high value relationships, and deep commitments and partnering of clients. So how do we think we will go about in this environment? As I said, we will be bringing a niche style operation, what we call a private bank service style to the corporate mid-market. And when we went down the journey of a private bank five, six years ago in the current form, people said, but what would you really do? that is different in terms of the market, and we have proven that our targeting was quite specific, that our service model was quite specific as well, and we've been able to build a fantastic business with 8,000 to 9,000 clients, and we would be looking to get that to about 18,000 clients in the next five years. So we know how to To build niche businesses, we know how to work with a private bank-style service, and we bring in this to this particular segment of the market. As indicated earlier, the idea is to close the gaps in our current offering in the mid-market. In South Africa, we already have a significant presence and track record. In the UK, as part of the group strategy, we are starting that journey, but given the advantages we have already, we are very excited about that opportunity. One of the advantages of coming in at this time, firstly, we are leveraging off our existing brand capability, our existing operating platform, but we can leverage flexibly tailor integration of our platforms with those of our clients because technology is much more flexible. You don't have to build the way that legacy systems have been built. So for instance, API enablement in terms of being able to do something that's bespoke to a client And because this is the approach we're taking, we are not looking at hundreds of thousands of clients or millions of clients. Because you can't offer this level of customization and flexibility if you go mass market. In South Africa, we are looking at... about 10,000 clients in this horizon. In the UK, we are looking at about 1,000 clients. You can't do this if you are focusing on the broader market. And this is in our DNA. This is how we operate. I remember I had a chat with a friend of mine who used to run a large bank in South Africa with more than 20 million clients. And he said to me, I cannot understand How of the 100,000 clients and the few corporate clients you have, you have built a business of the scale you have, the profitability that you have. But that's the DNA of being a niche operator with high levels of service, with a level of flexibility to tailor solutions for clients. Lastly, we... are going to be naturally evolving what we already have in terms of franchises. We hear every day that those clients, private clients who have businesses, say to us, why wouldn't you develop a capability to services? Because we love our experience with you. So this is a natural extension of the client franchises that we already have. In the mid-market, as we said, in the UK, we offer a number of products from risk management type products to lending products, but we do not have that glue. that a transactional banking full service mid-market corporate banking capability would offer. It is time for us to get in and build this business. So why this particular market? Obviously a high growth segment of the market. and a really important contributor to economic growth in the markets in which we operate. We think we have the opportunity to build and scale a business that will contribute meaningfully to our business. The risk-adjusted returns in this sector of the market are quite attractive. In South Africa, the operators there are generating in excess of 30% ROE in this segment. In the UK, I think the average is around 20% or so, and this represents for us a significant opportunity. We spoke earlier today about our efforts to diversify our deposit book and our funding base. This business is really quite important if you look at the performance of banking businesses in being able to access transactional operational deposits. We already have in South Africa a significant deposit base. We will seek to grow that as we go forward. As Kumesh said earlier today, We are trying to diversify our way from wholesale, or too much reliance on wholesale deposits. So this is part of that overall strategy in building a deeper, much more differentiated, and much more diversified deposit franchise. I've already alluded to the fact that technology makes it possible for us to springboard and to serve our clients flexibly. We probably wouldn't have been able to do this five, seven years ago because we were building other parts of our business and I do not think that our operating platforms would have been amenable enough for us to put this additional capability onto it. So technology will give us an ability to to move forward faster. As indicated already, we believe this is smack bang in the middle of who we are as investors. So the strategic fit is really incredible. On this slide, and I won't read what our clients have said, the high touch service model is really exceptional. And if you ever have the opportunity to sit with our private clients, and for them to tell you why they choose to have us as their primary bank. And some of the corporate clients we have equally do say so. So we'll take advantage of technology, and we will have the platforms that are competitive. But what will always differentiate our offering is that at the end of the line, you can talk to a human being, a very qualified human being, who can solve for your problems. We get the stories about clients having issues at midnight in New York, And they can actually get their issues solved by calling into our client support center. This model works. We have seen it work over a long period of time. We're excited to bring it to the corporate mid-market. As I say, a number of the owners of these businesses are already our clients. Directors of some of these businesses are already our clients on the private side. And we are excited to extend our service to them. How do we see the client value proposition? I mean, obviously, we're already doing a lot of funding for investment in working capital. That we do today. We will be able to do this with a level of focus and dedication that allows us to do even more for our clients. As indicated earlier, we have treasury risk solutions that we offer to our clients. Whether you think about cash management, you're thinking about forex management, that we do today. So we'll be able to help our clients optimize their returns and manage their risks by working with us in a partnership type model. And that really is what is different about Investec. We are not a transactional bank in the sense of trying to do a deal and move on to try to do another one. We walk the journey. I spoke in the morning about our model being that of partnering with clients on their personal and private journeys. That's why for those directors of businesses, when we say to them, we now can offer you full-service transactional banking, it makes sense for them to bring those business. For those owners for whom we're already doing, for instance, wealth management, and we now have this capability that we can bring to their businesses, it's a fantastic market opportunity for us. So, just expanding what we do for clients and going into the market with more services. Our clients are generally very active, so for us we will be able to continue to advise them, but also to provide them funding to act on opportunities. In that space, being nimble, being flexible, and being able to make a quick decision is actually more important than the cost of money, because our clients can take advantage of opportunities. We'll be able to do that in a more holistic way for the corporate mid-market. And we've been building over a period of time. Those who know our business well in South Africa will know that over the last decade, Number of years we've concentrated on the payment space, making sure that we work both with regulators and with others to make payments a lot more easier and a lot more seamless. And to go into this part of the market, you ought to be able to handle a level of volume. from a payments perspective for your clients, and we have been investing in that capability. And I've talked about the personalized engagement that we offer, and there's no doubt in our minds, it is a huge distinguishing feature of our offering. So let's look at the growth and the proposition we are looking for in perspective. Firstly, we are not going outside of our trim lines. We are still targeting fairly, in a fairly limited manner. We're still looking to select clients carefully. The numbers we mentioned, 1,000 clients in the UK corporate mid-market, about 10,000 SA, these are not crazy numbers, but they present for us an executable opportunity. And what we are going to do with these clients is deeply ingrained in our DNA so we know our people can execute. On the proposition, we've already invested in the UK in the private bank over the last five years and the successes they have given us the confidence that we can embark on this journey and be successful at it. So the targets we have set are really achievable. Circa 8% market share in SA. We're already at 3,000 clients. You get the next seven, it's only 5% more market share. We are very confident we can get there. Within the UK context, as equally said, tiny market share, but we should be able to offer high-value services and, as a consequence, do better from it. So how does this fit into the overall perspective of a business that continues to improve its return profile? As I said earlier today, returns are an outcome. Our focus as a management team is on building capability, supporting our clients, being flexible around their needs. And if we do that right, the returns should follow very logically. So on the... On this particular breach, I've indicated that the leveraging and scaling up of our core franchises will contribute a significant portion to the returns. Up left, we already are working on capital optimization. A shareholder or an analyst asked us why we are not a bit quicker in in the share-buy bet, but we are on course and on program, so we're comfortable about that, and we will continue to manage our capital dynamically. If, as an example, we get an opportunity to acquire business, that means that we may have then to be flexible in how we look at capital allocation. It will be dynamic. but supporting of the overall strategic intent that I talked about yesterday. So the South African piece of this discussion of this strategy will contribute significantly in this time period. The UK piece by 2030 will just be gaining traction, so we expect that piece to contribute more significantly beyond the FY30 horizon. We'll give you a sense of what we think the revenues will be by FY30 from our UK business, but this is really exciting if you look at it long term. As I said about this earlier, because we've tested the model in SA and we are successful and we've been investing in these platforms and we have the benefit of latest technology, we think our UK rollout will in fact benefit from all of those. So that's how we will be building over the next number of years to give us a bit more of a sense of how we will do this in each of the two geographies. I'm now going to call the top youngsters to present, starting off with Nick Riley. Nick, you ready? Thank you.

Okay, let's make sure we get these slides right. Thanks, Fani. Certainly an exciting opportunity for us. It's been lots of fun getting stuck into the detail over the last seven weeks since I stepped into the saddle. The next few slides will unpack the corporate mid-market opportunity and strategy for South Africa. So what is this client segment? Juristic entities with a turnover between $30 million and $1.5 billion are banked by the business and commercial banking divisions of the incumbents in South Africa. This client segment is extremely profitable and a high ROE segment for the banks. Whilst it's highly competitive, we think it remains ripe for disruption. There are approximately 3.5 million juristic entities in South Africa with a turnover between $0 and $1.5 billion. Our definition of the corporate mid-market incorporates unlisted juristic entities. Now, are you still on that slide, Juan? Oh, I'm making the same mistake you made. Look left, not right. So our definition of the corporate mid-market incorporates unlisted juristic entities with a turnover between $30 million and $1.5 billion. This takes us out of the SMME segment, which is experiencing fierce competition by the incumbents and new entrants to the market. It's a deep segment, 79 billion in revenue, 620 billion of loans, and 405 billion rands of operational deposits. Our market share is between 0.5% and 5% in terms of these measures and presents significant opportunity for growth. Investec believes its niche are companies with a turnover between 100 million and 1.5 billion, representing an opportunity set of about 220,000 clients. We would consider banking clients below the 100 million threshold, where we foresee the ability to grow and support these clients. We underrepresented in this growing market and are well positioned to gain market share. We're not starting from scratch. we have 3,000 existing high-value relationship-led clients. We already offer lending, certain transactional banking capability, savings product, risk management product, and advisory service to this existing client base. Historically, we've serviced these clients from different divisions within the Investec group, limiting the full enablement of the bespoke service model that we offer. We now have one business, one leadership team with full accountability and responsibility to deliver the strategy with laser-focused execution. We are targeting 10,000 clients by 2030. So in terms of the numbers of the client set of 220, 5%, the 8% Farnie referred to was loan market share by 2030. So to reach our 10,000 clients, we need to acquire another 7,000. So whilst we're materially increasing our base from 3,000, the target number remains at a level which allows us to deliver the Investec bespoke service model. Our competitor banks have between 20,000 and 50,000 clients, which makes it difficult for them to replicate the high-touch, tech-enabled Investec client experience. Way easier for us to create a comparable product set, way more difficult for them to compete with our service level. The upside to this 10,000 clients is the client acquisition opportunities that reside within the bank. Either we bank the individual and not their business, which Farnie has spoken to, or existing clients have told us that they want to do more with us when we've got a comparable product offering. They tell us, if you can do for me what you do for my personal, I'll move my business banking tomorrow. We see these opportunities as low-hanging fruit. So what does a typical client look like within the existing base of 3,000? They have a turnover greater than 100 million and have either one or two products with Investec. We see this now as a significant opportunity further cross-sell to these 3,000 clients, increasing the average product from one or two to four. I'll illustrate what this trajectory looks like shortly in an example. Our existing lending clients are concentrated within sectors that are working capital or asset heavy. We'll now look to broaden that sector focus as we scale, leveraging the sector specializations, intellectual property, and network within our corporate and investment bank. Yeah, here's a short example of what the trajectory looks like. We first engaged this client in 2018. They were a provider of infrastructure to the ICT sector. We provided a term and trade facility of 24 million rand to unlock growth out of their working capital. Fast forward seven years, they've grown their turnover by six. We've increased our facilities by a factor of five. And we now have five products across three juristic entities. Investec funded the vertical integration into a transport business. We funded the acquisition of the owner-occupied property. Our current funding consists of trade, term, and overdraft and access facility. And we provide transactional banking through underlying transactions, corporate credit cards, and ethics facilities. We've recently introduced our leverage finance team with the opportunity to introduce a new investor. This is what that trajectory looks like. This is what we will aim to do in terms of increasing the products across that client set. So what does the execution of the corporate mid-market strategy look like in terms of numbers? We've already got 1.7 billion across the existing client base. This is not a nascent business. The execution of the strategy is expected to more than double our revenue from 1.7 billion to 3.8 billion. Similarly, more than doubling our profit, representing compound growth between 18 to 20% over this five year period to 2030. We expect to achieve this through doubling our loan books, capturing operational deposits to increase the existing base by a factor of five, and a significant increase in capital out transaction banking fees. Whilst the execution of the strategy will require further investment, we have the benefit that these are existing businesses with existing infrastructure and existing platforms. This additional expenditure will not impact on the group's target cost to income ratio range. So the more than doubling in profitability and naturally higher RAE from this business segment is expected to deliver meaningfully to the 200 basis point increase in the group RAE that Fani mentioned earlier. So where will we focus and where will our priorities be to successfully execute on the strategy? The lending, savings, risk management product, and advisory services which form a part of this product suite, as reflected in the earlier wagon wheel, are all mature platforms, already servicing the existing clients, our base of 3,000 clients. There will be further investment in transactional banking feature rollout, modernization of the tech stack, automation of client touchpoints, including KYC and onboarding, API-led integration over the next 12 to 18 months. These enhancements will assist with a simpler and friction-light move of clients from some of our incumbents. The additional investment will, for the first time, enable a holistic transactional product set comparable to our competitors. It creates the opportunity to access a subset of the market that we have not been active in before. So with a level playing field in terms of products, we can now really differentiate our bespoke service model, offering corporate mid-market clients access to our world-class client support center, deep specializations, and relationship-driven and empowered bankers. So let's now bring it all together. This is a natural evolution for Investec. We're building off an established base with a history of successfully servicing selected client segments in a highly competitive market. In a segment traditionally underserved, we will for the first time be able to offer the full product capability with our distinctive and differentiated service. always human, enabled by our culture and values. The experience is effortless and professional. The expertise is specialist, value-adding, and proactive. And the attitude, passionate and can-do. To win, we only need 5% market share in numbers. And within the next five years, this will lead to a tripling of our client base, increased entrenchment with four products per client, a more than doubling of profitability with a CAGR of 18% to 20%, and a meaningful contribution to the 200 basis point enhancement of RAE. This new division that will be delivering on the strategy will be known as Investec Commercial Banking. Thank you. Andy, over to you.

Thank you, thanks. Okay, good morning everyone, and good afternoon for those of you in South Africa. Fani and Nick have both spoken about the mid-market plans being a natural evolution Nick and the team have clearly got a head start on us here in the UK. But I've been amazed by the energy and enthusiasm that we've experienced when talking about this proposition to our clients and everyone else actually that's in the street that we get to talk about. Lots of our existing clients are really keen to get involved as soon as possible. In fact, I was recently at a lunch with some clients I know really well, and they were pushing me seriously hard on how quickly we can get this moving so they can come and join us. In a very short space of time, we've attracted some incredibly experienced individuals from existing mid-market banks in the UK. And we've got others that are already keen to join. And let's not forget that's in addition to the really high quality people who have already been helping us build these franchises over time. Everyone wants to be part of building this corporate banking business that has a private banking feel. We're excited and confident to grow something that's truly unique in the UK for the mid-market clients. And I'm going to spend a few minutes talking about the UK proposition more specifically, and in particular, why we like the market, what we're focused on building, and how we're going to deliver that at pace. I've got the slides. All right. There are around 80,000 businesses in the UK with a turnover of between £5 and £250 million. We believe 60,000 of those play to our existing strengths and sector expertise, so that's where we're going to focus. Banking in this segment is dominated by the big five banks, but there's no significant differentiation between them. we're going to deliver a premium out of the ordinary alternative that simply isn't available elsewhere. We have a distinctive brand with a great reputation. Clients already choose us due to our high service standards. And we have an exceptional client relationships and deep expertise, regularly winning awards for client experience in this mid-market. So let's look at the next slide for what we have today and what we need to build. If you look at the green and orange dots, you'll see that we already have one of the most comprehensive and compelling propositions in the mid-market. We have the vast majority of lending products, a strong treasury and risk offering, and we're one of the few banks in the mid-market with advisory and equity teams. And of course, we have our private banking expertise. The key ingredients that we need to add are scalable transactional banking and best in class relationship managers who are going to pull all of this together for us. So let's look at some of the timelines and the value of what we think we can deliver. The big banks in the UK make around £6.5 billion of profit per annum in this space. And as Farnie said, that's made an average of about a 20% return on equity. So strategically, this is a very key driver for us for accretive growth as we move forward. Working backwards from right to left, by 2030, our ambition is to be delivering 80 to 100 million pounds worth of revenue from these 1,000 clients. Between now and then, which is the middle column, we will have a full proposition live by quarter one 27, a full relationship banking team in place by 28, and we expect to break even by 29. Our current focus is on product development, relationship management, and operations and technology. And on the next slide, I'm just going to give a flavour of the longer term view, because this is just the start of what we can achieve. If you look at the left-hand side of the slide, we already have award-winning franchises in the UK, be that the 60,000 clients we have in our asset finance businesses, or the corporate client base with Treasury, FX, Risk Solutions, Direct and Specialist Lending. We're building relationship banking in the middle of this to enhance our existing clients' offerings and also allow our RIMs to confidently attract new clients. By 2032, we aim to have 40 to 50 relationship managers in the market, delivering a revenue of about £175 million. That means we'll have 2,000 clients who on average will hold three to four products with us. And this will make a material contribution to the growth and returns of our UK bank. To deliver this full service relationship banking, we need to build scalable transactional banking, an operational platform that's intuitive and gives great client experience. And for that, we're clearly leveraging, as others have said, the good work that's taken place so far in our infrastructure. We're in the process of recruiting a market-leading relationship team to offer the whole of Investec to our clients. Our service-led approach is to provide a private banking experience in the mid-market, and the differentiation will be operations and technology that allows RMs to spend their time with clients, not spending 70% of their time, as many do today, on admin and other queries that come through. Relationship managers need time to understand their clients properly. We want them to have that time to listen and proactively help those clients to grow. And we want them to offer the full breadth of capability across Investec. For day-to-day client needs, our clients are going to have access to our market-leading client support centre. Phones answered quickly by people who will do their best to fulfil their needs there and then without further hand-offs. We're on track for putting our relationship managers, our first relationship managers, into the market in quarter one of 27. But we may well bring that forward to H2 of 26. We're going to test our capability with a small number of pilot clients as we progress to full rollout. So let's move on to delivery. Our approach to delivering at pace is guided by a few key principles. Product and service development will be client-led, driven by insight and testing. We will leverage lots of our existing capabilities. We will adopt the latest tools, including AI, wherever possible. And clearly, building the right team is critical. I'm just going to take a minute to talk about the team that we're building. We're bringing in new expertise where required and let's not forget we've already got lots in-house. But we're bringing in people who have been there, seen it and done it in the UK mid-market for the activities that are going to be new for us. In a very short space of time we've attracted some incredibly experienced individuals and we continue to build out this team. Everyone wants to be part of building this unique corporate banking business that has a private banking feel. The focus, the energy, and the expertise is incredible to see. So let me just summarize. In the UK, we believe we have a clear opportunity for Investec to differentiate in the UK mid-market. It's not just what we do, it's about how we do it. We create real expertise and trust and that drives exceptional client relationships. This is a natural evolution, as everyone has said, for our UK bank to support the growth of mid-market clients as well as our own accretive returns. We already have a compelling mid-market proposition. Investment over the next two years will significantly enhance this. with transactional banking, relationship management, and a modernized digital platform. Increased client acquisition and deeper client relationships would increase our share of wallet to drive income growth and return on equity. We're now laser focused on the execution to build this, and we have a unique proposition for our mid-market clients. I'm now going to pass back to Fahmy.

Thank you, Andy. Thank you, Nick. You can see we do have some top youngsters in our team. Ruth, thank you for supporting the development of this capability in this market. The opportunity is real. The execution will require the level of focus that Andy spoke about. So from the perspective, as I said, of the uplift in our returns, the UK piece is the blue sky, because we haven't factored that much into our five-year horizon, as excited as we are about that opportunity. The UK, sorry, the South African opportunity is in the now because we've been building there for some time. It's about the flywheel momentum that we are now building in that business, more than doubling in the number of the metrics that Nick spoke to. It's important, again, to say that we've given an outlook of 52 to 54 percent cost-to-income ratio despite the level of investments that we are making in these new initiatives. We remain comfortable that we've been prudent before in getting some of the investments into the normal run. So while we are investing more, we are unlikely to significantly move upwards our cost to income ratio. And this is why this particular capability makes sense for us because it leverages not only of the DNA of the business, but also of the investments that have been made and expanding relationships that we already have with our clients. So we conclude again by giving you this simple slide about our right to win. private client banking experience for a select number of clients in the market and expansion and evolution of the relationships that we already have and that we have the experience to implement a growth strategy. We have the people to do this. We have the culture that can support this nimble high-touch offering to clients in the corporate bin market. We've got the capital and the liquidity to stand behind the efforts that we have indicated. Excited about this zebra that is galloping forward. In May, we'll give you a view into our private clients strategy. And if I'm excited today, I'm even now just running towards May because we would love to show you what we are doing. But the execution challenge is significant. We are not underestimating that at all, but we are a team focused on building enduring value for our clients. So thank you. We'll take some questions. How do we do the questions? In this room first. Okay, Q. Thank you. Any questions from the room? Okay, no questions. We'll go to Kumesh in SA. I seem to see how this pattern is going to go. We're going to have questions from the online line. Kumesh, any questions from SA?

We're just checking Fonny. Donovan? Are there any questions online? OK, so there's some online. I'm just going to check the room first. If there are any questions in the room. No questions in the room. Donovan, can we go to the online questions?

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

have to work for their lunch.

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

Thanks, Nick. Nick has run a listed company before, so I think he has, what shall we call it, the agility to fill the bonuses as they come.

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

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

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

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

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

So the work that we've done, it's between 1,500 and 2,000 that we think there's the opportunity to bring across private clients that we bank on their personal capacity in terms of their businesses. And that's what we referenced as the low-hanging fruit. I think the second part, what's the acquisition cost, I think if I understood correctly, in terms of bringing across clients from the incumbents. Look, I don't think we underestimate that there's going to be a flush of clients. We understand that some of these clients have been banking with the incumbents for 20 to 30 years. But I think now that we have the full product offering, I think the proof is in the pudding that we've already got 3,000 clients. So we've got clients internally and externally out the group that are investing in banking with us based on that capability. We understand that potentially it could take three to four years, product by product, to be able to unhook some of the clients from the incumbents. Around acquisition costs, we don't see that elevating again above our cost-to-income ratio. So we'll manage it within the group's targets.

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

Oh, thank you. That is fantastic. Someone else is excited by it. I was just about to say, Donny, why are you taking comments? I thought you were giving us questions. But that comment we will take any day. That brings us to the end of our presentation. It's now back to work. Thank you very much.