Six Capitals | Investec

We continue to create value through the six capitals

Human capital

We depend on the experience and proficiency of our people to perform and deliver superior client services.

Intellectual capital

We use our specialist financial skills and expertise to provide efficient solutions for clients and have a robust risk management process in place.

Social and relationship capital

We leverage key stakeholder relationships to enhance our impact on society and the macro-economy.

Natural capital

We support the transition to a low-carbon economy. We will consider any meaningful activity that reduces the negative impact, or prolongs life, on our planet.

Technological capital

We deliver efficient and effective information technology to support our businesses and facilitate our digital strategy.

Financial capital

We create sustained long-term wealth by growing our core businesses.

Human capital

We depend on the experience and proficiency of our people to perform and deliver superior client services.

Purpose and priorities	Impact over the past financial year
Providing a safe and healthy work environment that values physical as well as psycho social well-being	20% of our employees in the UK Bank and Wealth have attended employee well-being interventions in the first month since the launch in February 2019 70% of our employees in South Africa participated in employee wellbeing initiatives (2018: 72%)
Investing in our people and growing talent and leadership	Learning and development spend as a % of staff costs is 1.5% (2018: 1.9%) for the group (target of >1.5% for the group) Our learning and development spend in the past year was £17.8 million (2018: £22.5 million). The decrease is due to the realignment of current programmes to ensure efficiency and relevance 22 CAs graduated from the CA programme in the past year and 17 were retained in our business (2018: 21 of 21 graduates retained)
Retaining and motivating staff through appropriate remuneration and rewards structures	Our staff turnover rate is 9.6% in South Africa (2018: 9.2%) and 11.5% in the UK (2018: 11.3%) 5% of Investec group’s shares are held by staff (excluding nonexecutive directors’ holdings) (2018: 5%)
Respecting and upholding human rights by entrenching a value-driven culture through the organisation that is supported by strong ethics and integrity	We signed up as a full participant to the United Nations Global Compact and remain committed to the 10 principles on human rights, labour, environment and anti-corruption
Promoting diversity and equality at all levels of the group	49% of our employees are female (2018: 49%) and we have 25% females on the board (target of at least 33% by 2020) (2018: 20%) Our senior female managers increased to 35% (2018: 33%) We were recognised by Equileap in the UK for best maternity and paternity leave We compiled a document which is publicly available called The way we do business We appointed Ruth Leas as CEO of Investec Bank plc and head of the UK Bank (subject to regulatory approval) We signed the CEO statement of support for the United Nations Women’s Empowerment Principles

Intellectual capital

We use our specialist financial skills and expertise to provide efficient solutions for clients and have a robust risk management process in place.

Purpose and priorities	Impact over the past financial year
Maintaining a diversified portfolio of businesses that supports performancethrough varying economic cycles	Our capital light activities contributed 56% to group income (target > 50% of our income from capital light activities (2018: 56%) Our annuity income as a percentage of operating income is 76.9% (2018: 76.2%)
Leveraging our expertise in risk managementto protect value	Our credit loss ratio within long-term average range is 0.31% (2018: 0.61%)
Ensuring solid and responsible lending andinvesting activities	We trained a further 43 frontline consultants on environmental, social and governance (ESG) practices in South Africa and the UK (2018:195)

Social and relationship capital

We leverage key stakeholder relationships to enhance our impact on society and the macro-economy.

Purpose and priorities	Impact over the past financial year
Building deep durable relationships with ourclients and creating new client relationships	Our customer accounts (deposits) up 4.1% (2018: 6.5%) Customer complaints in Private Bank South Africa were down 7.2% to 2 202 complaints (2018: 2 373 complaints)
Investing in our distinctive brand and providing a high level of service by being nimble, flexibleand innovative	We were voted South Africa’s eighth most valuable brand in 2019 by Brand Finance South Africa
Unselfishly contributing to society through ourcommunity programmes	We achieved 1.5% group community spend as a % of operating profit (2018: 1.4%) (target of >1% for the group). Our community spend was £9.9 million (2018: £8.2 million) * Restated to include external learnerships and job creation (YES initiative)
Committed to transformation and youth employment in South Africa	We are rated level 1 under the Financial Sector Code. We are one of the first signatories to the Youth Employment Service (YES) initiative in South Africa, and placed more than 1 200 youth with 11 partners during the year

Natural capital

We support the transition to a low-carbon economy. We will consider any meaningful activity that reduces the negative impact, or prolongs life, on our planet.

Purpose and priorities	Impact over the past financial year
Funding and participating in renewable energy	86% of our energy lending portfolio relates to clean energy (2018: 88%) Together with UK Climate Investments, we committed R1 billion to a dedicated renewable energy investment vehicle called Revego Africa Energy
Limiting our direct operational carbon impact	Carbon emissions reduced by 2.8% (2018: 6.1%) despite headcount increasing by 4.7% In the UK, we have incorporated a number of environmental initiatives into the design of our new premises in London to manage and reduce our carbon footprint
Protecting biodiversity through various conservation activities	Signed up to the United for Wildlife Financial Taskforce which leverages existing global financial crime architecture to combat illegal wildlife trade 5 812 increase in number of children reached through our Coaching for Conservation programme in the past year (17 373 reached since 2013) Investec Rhino Lifeline has supported the rescue of 80 rhino since 2012 (2018: 70 rhino) 11 rural villages in South Africa received access to water as result of our collaboration with the Entrepreneurship Development Trust and Innovation Africa

Technological capital

We deliver efficient and effective information technology to support our businesses and facilitate our digital strategy.

Purpose and priorities	Impact over the past financial year
Creating an international platform for clients with global access to products and services which is both high-tech and high-touch	We are continually enhancing and evolving our client digital platforms to ensure a seamless, integrated client service experience, now including a dedicated Investec for Intermediaries, and a business banking experience
We are focused on optimising the internal value chain, and improving productivity	We executed on a number of core platform improvements, and a dedicated digital workplace strategy is underway to support this initiative We closed our Click & Invest Service as the appetite for this type of investment service remains low and the market is growing at a much slower rate than expected
Partnering with the growing fintech ecosystem	Relationships formed through our Investec emerging companies team across the world, and a dedicated fintech partnership team has built a strong pipeline of innovation We partnered with a late-stage technology venture capital fund with a first investment focusing on low-cost 3D imaging sensors enabling tumour detection, people-tracking, vehicle automation and radiation level testing among others Through a collaboration with Bankserv Africa and uPort, we have revealed a blockchain based identity system We have launched Samsung-pay which facilitates secure and convenient mobile payments

Financial capital

We create sustained long-term wealth by growing our core businesses.

Value added statement

£'000	31 March 2019	31 March 2018
Net income generated
Interest receivable	2 641 920	2 491 009
Other income	1 587 063	1 607 007
Interest payable	(1 826 493)	(1 730 611)
Other operating expenditure and impairments on loans	(374 839)	(467 982)
	2 027 651	1 899 423
Distributed as follows:
Employees: Salaries, wages and other benefits	816 253	795 420
Communities: Spend on community initiatives	9 862	8 238*
Government: Corporation, deferred payroll and other taxes	609 927	550 610
Shareholders:	279 389	261 435
Dividends to ordinary shareholders	238 072	227 908
Dividends to perpetual preference and Other Additional Tier 1 security holders	41 317	33 527
Retention for future expansion and growth	312 220	283 720
Depreciation	40 812	28 804
Retained income for the year	271 408	254 916
Total	2 027 651	1 899 423

*Restated to include external learnerships and job creation (YES initative)

Human capital

Intellectual capital

Social and relationship capital

Natural capital

Technological capital

Financial capital

Value added statement

More information