NEWS RELEASE FROM INVESTEC LIMITED
 
15 May 2008

Geographic and operational diversity support growth in challenging markets 

Investec, the international specialist banking group, today announced its year-end results for period ended 31 March 2008. Investec delivered growth in operating profit before goodwill, non-operating items and taxation of 15.2% to £537.7 million (R7.7 billion) (2007: £466.6 million; R6.2 billion).

Commenting on the results, CEO Stephen Koseff said: “Diverse geographic and operational revenue streams have enabled the group to deliver a good operational performance, demonstrating our resilience in difficult credit market conditions. Whilst UK performance has been impacted by these conditions, South Africa and Australia have continued to grow earnings.”

The group met four of its five growth and financial return objectives with ROE of 23.6% (target: >20%), dividend cover 2.3 times (target: 1.7 to 2.3 times), cost: income of 56.1% (target: <65%) and capital adequacy ratios within the target range of 12% - 15%. Adjusted earnings per share increased 6.8% from 53.3 pence to 56.9 pence against a target of 10% above the UK retail price index. This represented growth of 14.1% in Rand terms from 713 cents to 814 cents.

South Africa contributed 63.2% of total operating profit to the group and posted strong growth in operating profit before goodwill, non-operating items and taxation - up 26.5% to £340.0 million (R4.9 billion). Australia delivered good growth in profitability despite slower activity levels - operating profit before goodwill, non-operating items and taxation up 9.7% to £33.1 million (R0.5 billion). Growth in the UK business was impacted by write downs in the Principal Finance division - operating profit before goodwill, non-operating items and taxation decreased marginally by 1.6% to £164.6 million (R2.4 billion). The UK and Australian activities generated 36.8% of total operating profit.

• Overall operating profit growth was supported by good profitability from all business divisions:
  Private Client Activities, including Private Banking and Private Client Portfolio Management and Stockbroking divisions increased 9.8% to £193.7 million (R2.8 billion) (2007: £176.5 million; R2.4 billion). 
• Capital Markets decreased by 1.3% to £115.8 million (R1.7 billion) (2007: £117.3 million; R1.6 billion). 
• Investment Banking posted a decrease of 15.2% to £77.3 million (R1.1 billion) (2007: £91.2 million; R1.2 billion) 
• Asset Management grew by 12.8% to £76.8 million (R1.1 billion) (2007: £68.1 million; R0.9 billion).
• Property Activities generated operating profit of £36.3 million (R0.5 billion) (2007: £14.1 million; R0.2 billion), representing strong growth of 156.8%.

Commenting on the groups’ performance, Managing Director Bernard Kantor said. “The group has performed well. Although the Principal Finance division in the UK has been impacted by write downs all our divisions generated good profits with Private Client Activities, Property and Asset Management continuing to grow strongly. This is a difficult market but we will stay focused on delivering against our key financial objectives. ”

The board proposes an increased final dividend of 13.5 pence (202.0 cents) per ordinary share equating to a full year dividend of 25 pence (361.5 cents), an increase of 8.7% (13.7% in Rand terms). 

Capital ratios remain strong following the successful implementation of Basel II with effect 1 January 2008. Applying South African Reserve Bank rules to Investec’s capital base, the ratio is 13.9%. The capital adequacy of Investec plc (applying UK Financial Services Authority rules to its capital base) is 15.3%. (Prior year capital ratios apply Basel I).

Commenting on the prospects for the group, Koseff noted, “We have a seasoned management team, a sound balance sheet and strong risk management disciplines that will enable us to navigate through a period of continued uncertainty. We have a resilient business and confidence that we can meet the challenges ahead.”

Additional financial information

• Further financial highlights:
  Net income attributable to shareholders (before goodwill and non-operating items) increased 14.6% to £344.6 million (R4.9 billion) (2007: £300 million; R4.0 billion).
• Total income grew by 26.0% to £1,484 million (R21.2 billion) (2007: £1,177 million; R15.8 billion) supported largely by a solid growth in net interest income of 69.6% to £583.4 million (R8.3 billion) (2007: £343.9 million; R4.6 billion) and a 5.7% increase in net fees and commissions to £521.5 million (R7.5 billion) (2007: £521.5 million; R7,0 billion).
• The operational effective tax rate decreased from 26.3% to 22.6%.
• Core loans and advances to customers increased 27.1% to £12.8 billion (2007: £10.1 billion); 44.4% in Rand terms to R207 billion. 
• Third party assets under management grew 10.0% in Rand terms to R876 billion, but decreased 3.4% from to £54.2 billion (2007: £56.1 billion) largely as a result of the depreciation of the Rand.

Please refer to SENS statement for additional financial statement analysis and operational detail.

ENDS
Prepared by: FDBeachhead (Jennifer Cohen & Louise Brugman)
011 214 2401 / 082 468 6469 / jennifer.cohen@fd.com
011 214 2415 / 083 504 1186/ louise.brugman@fd.com

On behalf of: Investec Limited

Further info: Investec Investor Relations: 011 286 7070
Ursula Nobrega / Lindsay Haines
082 552 8808 / 082 941 1001

Note to editors:

About Investec:
Investec (comprising Investec Limited and Investec plc) is an international specialist banking group that provides a diverse range of financial products and services to a select client base.

Investec was founded in Johannesburg in 1974, acquired a banking license in 1980 and listed on the JSE Limited in 1986.

In July 2002, Investec implemented a Dual Listed Companies (DLC) structure with the linked companies listed in London and Johannesburg. A year later Investec implemented a significant empowerment transaction in which empowerment partners collectively acquired 25.1% of the issued share capital of Investec Limited.

Since inception, Investec has expanded through a combination of substantial organic growth and a series of strategic transactions. Today Investec is an efficient integrated international business platform, operating from three core geographies - UK, South Africa and Australia.

Investec is organised as a network comprising five business divisions: Private Client Activities, Capital Markets, Investment Banking, Asset Management and Property Activities. The head office provides certain group-wide integrating functions and is also responsible for central funding and the Trade Finance business.

These results are prepared in accordance with International Financial Reporting Standards (IFRS).

Presentation of financial information

Investec’s reporting currency is Pounds Sterling. Other foreign currency denominated values included in this announcement have been translated into Pounds Sterling, in the case of the income statement at the weighted average rate for the relevant financial year, and in the case of the balance sheets at the relevant closing rate. The following table sets out the movements in certain relevant exchange rates against Pounds Sterling over the financial year:

	31 March 2008		31 March 2007
Currency per £1.00	Year end	Average	Year end	Average
South African Rand	16.17	14.31	14.20	13.38
Australian Dollar	2.18	2.32	2.42	2.47
Euro	1.25	1.42	1.47	1.47
US Dollar	1.99	2.01	1.96	1.90

Exchange rates between local currencies and Pounds Sterling have fluctuated over the year. The most significant impact arises from the depreciation of the Rand. The average exchange rate over the year has depreciated by 6.9 % and the closing rate has depreciated by 13.9 % since 31 March 2007.