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1. Company Snapshot

1.a. Company Description

Investec Group provides various financial products and services in the United Kingdom South Africa, and internationally.The company offers wealth and investment products and services, including portfolio management, discretionary wealth management, financial planning, stockbroking/execution, pensions and retirement, and investment advisory services for private clients, charities, pension funds and trusts.It also provides specialist banking products and services comprising private banking products, such as lending, savings, foreign exchange, private capital, and transactional banking services; corporate and investment banking products, including lending, advisory, hedging, cash deposits and savings, and equity placement services to government, institutions, corporates, and intermediaries.


Investec Group was founded in 1974 and is based in Sandton, South Africa.

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1.b. Last Insights on INVP

Investec Group faces challenges, including a decline in interim profit due to a slowdown in its southern African unit, which offset gains in its UK operations. The company's earnings were negatively impacted by a decrease in profit for the first time since 2021. Furthermore, an Indian regulator blocked SBI's bid to increase its stake in Investec's joint venture. Despite a partnership with NACFB to support industry standards, these developments may affect investor sentiment. A dividend payment of £3.96 is set for December 30.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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How The Latest Analyst Downgrade Is Reframing Foschini Group’s Valuation Story

Dec -04

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Investec Group (JSE:INL) Is Due To Pay A Dividend Of £3.96

Nov -23

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Moodliar on Investec's Earnings in South Africa

Nov -21

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Auto & Transport Roundup: Market Talk

Nov -13

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Investec Asset Finance and Capital Solutions partner with NACFB

Nov -12

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Prokarium Appoints Ibs Mahmood as Chief Executive Officer

Nov -11

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Plus Power Secures $160 Million in Tax Equity Investments for its Landmark ISO-NE Battery Storage Projects

Nov -05

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Indian regulator blocks SBI’s bid to increase stake in Investec JV-report

Oct -31

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.89%)

6. Segments

Corporate, Investment Banking and Other

Expected Growth: 1.8%

Investec Group's 1.8% growth driven by Corporate segment's increased lending and deposit growth, Investment Banking's advisory fees from M&A deals, and Other segment's asset management and wealth management businesses. Strong risk management and cost discipline also contributed to growth.

Wealth and Investment

Expected Growth: 2.2%

Investec Group's Wealth and Investment segment's 2.2% growth is driven by increasing demand for discretionary investment services, growth in assets under management, and expansion into new markets. Additionally, the segment benefits from a strong brand reputation, diversified revenue streams, and a robust risk management framework.

Private Banking

Expected Growth: 1.5%

Investec Private Banking's 1.5% growth driven by increasing HNWI demand for bespoke investment solutions, strategic expansion into key markets, and enhanced digital capabilities. Additionally, the segment benefits from strong relationships with ultra-high net worth individuals, family offices, and entrepreneurs, as well as a robust risk management framework.

Group Investments

Expected Growth: 2.5%

Investec Group's 2.5% growth in Group Investments is driven by a combination of factors, including a strong pipeline of deals, increasing demand for alternative investments, and effective cost management. Additionally, the group's diversified portfolio and strategic partnerships have contributed to its growth, while a favorable interest rate environment has also supported investment returns.

7. Detailed Products

Wealth and Investment

Investec's Wealth and Investment division provides a range of investment products and services to individuals, families, and institutions.

Private Banking

Investec's Private Banking division offers bespoke banking services, including lending, deposits, and transactional banking.

Corporate and Institutional Banking

Investec's Corporate and Institutional Banking division provides a range of financial services to corporate clients, including lending, cash management, and risk management.

Investment Banking

Investec's Investment Banking division provides advisory services, including mergers and acquisitions, equity and debt capital markets, and restructuring.

Asset Management

Investec's Asset Management division offers a range of investment funds and portfolios to institutional and individual investors.

Specialist Banking

Investec's Specialist Banking division provides specialized lending and deposit products to niche markets, including aviation, property, and renewable energy.

8. Investec Group's Porter Forces

Forces Ranking

Threat Of Substitutes

Investec Group operates in a niche market with limited substitutes, reducing the threat of substitutes.

Bargaining Power Of Customers

Investec Group's customers are primarily high net worth individuals and institutions, giving them limited bargaining power.

Bargaining Power Of Suppliers

Investec Group has a diversified supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

The financial services industry has high barriers to entry, making it difficult for new entrants to compete with Investec Group.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.59%
Debt Cost 3.95%
Equity Weight 39.41%
Equity Cost 9.41%
WACC 6.10%
Leverage 153.72%

11. Quality Control: Investec Group passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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IG Group

A-Score: 7.6/10

Value: 6.0

Growth: 5.8

Quality: 9.1

Yield: 8.1

Momentum: 7.0

Volatility: 9.3

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BAWAG

A-Score: 7.3/10

Value: 4.5

Growth: 7.2

Quality: 7.2

Yield: 8.8

Momentum: 9.5

Volatility: 6.3

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VIG

A-Score: 7.2/10

Value: 6.4

Growth: 4.2

Quality: 6.2

Yield: 7.5

Momentum: 10.0

Volatility: 9.0

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Investec

A-Score: 6.5/10

Value: 8.0

Growth: 3.4

Quality: 8.0

Yield: 8.8

Momentum: 3.5

Volatility: 7.3

1-Year Total Return ->

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Swissquote

A-Score: 6.3/10

Value: 4.2

Growth: 8.7

Quality: 7.7

Yield: 2.5

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

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Nordnet

A-Score: 6.2/10

Value: 2.5

Growth: 7.0

Quality: 8.8

Yield: 5.6

Momentum: 7.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.26$

Current Price

5.26$

Potential

-0.00%

Expected Cash-Flows