Ladies and gentlemen, good morning and welcome to our FY 2021 Interim Results Presentation. I'm joined by Nishlan Samujh, our Finance Director, on the stage. Before we review the results for the period, I would like to give you a brief update on our COVID-19 response. I'm going to start with an update on our people. In South Africa, we are beginning to return to the office. In the U.K., given the second lockdown, staff continue to work from home. Clearly, the future world of work post-COVID-19 will benefit from the multiple remote working models now available to us. However, for Investec, we want to protect our culture, therefore the office will remain the center of gravity as we go forward. We continue to support our colleagues through a number of wellness programs as we go forward. Moving on to our clients.
Current COVID-19 relief provided to 6.3% of gross loans in the U.K., and at peak, that number was 13.7%. In South Africa, the current proportion of the loan book under relief is 2.2%. At peak, that number was 23%. We're beginning to see some good recovery in both geographies. We also facilitated over ZAR 20 million in donations on behalf of our clients, primarily using income generated from our private clients' charitable trust. In the U.K. and S.A., we are an accredited lender for government schemes. Moving on to our communities. As we had announced before, we committed GBP 3.6 million of relief, approximately ZAR 78 million, for relief for communities, and about two-thirds of that amount has been allocated to date.
We also did indicate earlier that senior leaders and staff donated via salary deductions to community initiatives that were primarily focused on food security, economic continuity, healthcare, education, and programs that support end gender-based violence, particularly in South Africa. Moving on to operational resilience. Managing the integrity of our balance sheet has been very primary in this period. We have conservative levels of capital and liquidity, firstly to weather the crisis, second to support our clients, and thirdly to fund growth in the long term. We have made further investments in IT infrastructure with the aim of supporting our working from home mode of work, but also to continue to enable our staff to support our clients in giving them the kind of client experience that they expect from Investec. Clearly, where our staff has gone back to work, we have instituted a number of safety protocols.
Looking at an overview of the results. It is clear that the trading environment has been very difficult where we have seen, in effect, massive economic contractions. We also have seen very volatile markets. Despite these conditions, our client franchises performed particularly well. We saw net inflows of GBP 336 million in our wealth businesses, with funds under management increasing by 15% to GBP 51.1 billion. In the specialist banking businesses, we saw good client acquisition in both geographies. Our net core loans grew by 1% to GBP 25.2 billion, with strong loan growth in our private banking business in the U.K., and that growth being offset by subdued corporate lending activity as corporates were positioned quite conservatively in a period of crisis. That happened in both geographies. We also saw corporate repayments.
Our client engagement has continued to be quite good during this period as we have used our digital platforms to continue to support our clients. As indicated, our balance sheet is very strong with robust capital and liquidity levels. Our loan book has been particularly resilient. The quality of our loan book obviously is an indication of the quality of our clients and the strength of our business model. The loan book is conservatively provided, and Nishlan will later unpack our provisioning. The credit loss ratio increased from 23 basis points to 47 basis points, driven largely by macroeconomic assumptions in our models as we calculate our ECLs using IFRS 9. Nishlan will go into that. This level of provisioning is a little lower than we had during the last half of financial year 2020, and we expect to see our CLR moderating as we go forward.
We have also seen good cost discipline, with cost well managed. Cost down by 14% during this period compared to last year, 8.1% down in neutral currency. We continue to see good execution on our strategic plan. Our plan remains clear and unchanged, and execution will remain key as we go forward. Later on in the presentation, we will indicate progress made on our strategic plans. Just going back to looking at, Nishlan, you are confusing me. Okay, starting off, just looking at the operating environment, I have already indicated that we saw very sharp GDP contractions. You can see in South Africa, our base case assumption is for a 9.2% contraction in GDP for the calendar year 2020. The impact of this contraction is obviously going to drive ECLs higher as we input assumptions in our models. Second, activity levels will be low.
That will impact non-interest revenues, but also the value of assets in contracting economies will be lower. In the U.K., our base case assumption is for a 10.1% contraction in GDP. We also saw very volatile markets. On the chart, you will see that we have had the FTSE in the comparative period at about 7,000 and in the current period that we're reporting on at about 6,000. You will expect that to impact the revenues in our wealth business in the U.K., as an example. We also will see asset valuations being down given that level of volatility in the public markets, and that will flow through also into the private markets. Looking at the second graph, we do see there the level of volatility in the average rate of the ZAR versus GBP.
Over the period, the average ZAR against GBP depreciated by 20.6% compared to the prior period. In our results, you will see the impact of that level of depreciation. Just going to the next slide. Despite this level of volatility and the contraction that we have seen in the economies in which we operate, we are beginning to see some pickup in activity. To evidence that, we have given you on this slide some numbers from our private banking businesses. Starting off with South Africa and looking at private bank lending turnover with March 2020 as a base, you can see the impact of the lockdown in April, May, and June. As the lockdown started to ease off in July, you can see turnover pick up quite significantly.
In September, we saw turnover quite impressively up, albeit that we were still not where we were in March. If you look at point-of-sale transactions as measured by the value of card transactions, again with March as a base, you can see that by September we have caught up to where we were in March. Encouraging levels of activity, and these will hopefully continue, depending of course on whether the lockdowns remain where we are. There is no stricter lockdown in South Africa. In the U.K., if you look at the graph on the left, we're looking at a high net worth mortgage monthly lending turnover. The light blue bar is 2019 and the darker blue is 2020. Again, you can see activity in the months of May and June being rather subdued, and you can see a pickup.
If you look at client acquisition in the U.K. private bank, you can see that in April, May, we saw reductions in client acquisition, but we have seen that pick up since. We are hopeful that we will continue to see activity improving, and that will inform our view of our outlook of performance in the second half. Just looking at results highlight for continuing operations. Adjusted operating profit decreased by 48.4% to GBP 142.5 million. Again, the main contributors as indicated in the economic environment and market volatility will be the compression of net interest margin, the reduction in non-interest revenue given lower activity, and trading income reducing by about 100% given some hedging losses in the U.K. bank related to our structured product. Nishlan will cover that later on. This was offset obviously by good cost control, as I have indicated.
I also have indicated that our impairments were up in the area. That led to adjusted operating profit reducing by 48.4%. That translated into adjusted earnings per share coming in at 11.2%, which is 50% behind the prior period, but ahead of the guidance that we had given. Net asset value per share increased quite pleasingly at an annualized 9.3% since March. Return on equity is reported at 5.3% versus 10.7% in the comparative period. Our cost-to-income ratio increased from 67% to 72%, largely driven by a reduction of 24% in net income. That offset, of course, by the cost reduction of 14% that I have referred to. The credit loss ratio increased from 23 basis points to 47 basis points, as I have already covered. I'm pleased to announce that we have declared an interim dividend of GBP 0.055, which is compared to GBP 0.11 in the comparative period.
I hasten to add that in the comparative period, the results included 80% attributable earnings from Ninety One. We obviously do endorse the guidance notes that have been issued by the SARB with respect to banks having to conserve capital and having to support the real economy. We did not pay a final dividend when we announced our results in May, and the current dividend that has been declared is predominantly carried by our capital light businesses. As you know, we continue to retain a 25% shareholding in Ninety One, and we have two wealth businesses that have performed particularly well in this tough environment. Within our banking businesses, while there is a contribution to the payment of dividend, we have substantially built up capital resources in this period.
If we look at the performance of the franchises very briefly, Nishlan will go into more detail, I'm going to be quite high level. Starting off with the South African business, the specialist banking business saw adjusted operating profit reduced by GBP 52 million. Again, the biggest contributors were compression in net interest margin, given the sharply lower interest rates, reduction in net non-interest income, given lower activity and lower investment income. Obviously, we spoke about increased impairments and good cost control reducing the extent of reduction. In ZAR, that reduction is 23%, which is quite a commendable performance in the current environment. Our wealth business in South Africa saw profit in ZAR increasing by 2.3%, We saw net inflows in discretionary funds under management. Our Group Investments where we have a holding of Ninety One, our investments in IEP, IAPF, IPF.
We saw a reduction of ZAR 29 million, and Nishlan will go into more detail there. All in all, the South African business recorded a reduction in profit of 45.6%, but in ZAR the reduction is 34.3%. As I indicated, there was a 20.6% depreciation of the average ZAR versus the GBP. The ROE for the South African business in total came in at 8.1% versus 13.5% in the prior period. Moving on to the business in the U.K. The specialist banking business recorded a reduction of GBP 67 million or 84%. Again, the drivers in the banking business were the same, net interest margin compression, non-interest revenue reduction, increase in impairments, and significant cost savings within that business. In this business, as I have mentioned a little earlier, we saw a hedging loss of GBP 53 million.
Of the reduction of GBP 67 million, GBP 53 million has been contributed by the hedging loss, and Nishlan will cover that a little later in the presentation. Our wealth business performed particularly well. As I indicated, the level of the FTSE in this period was about 1,000 points lower. We saw significant cost reductions as well, despite the fact that we had to spend some cost in certain restructure activities that we performed. A pleasing performance, even though that performance is behind last year's performance by 5.2%. Group Investments relates to our holding in Ninety One. I'm going to hand over the presentation to Nishlan to go deeper into the detail.
Thanks, Fani, and good morning to everyone. It's really a pleasure to deliver these half year results to you. I'm going to dig a little deeper and just pick up from where Fani left off. I think, again, if we look at the overall business from a geographic perspective, our operating income, around about 60% of our operating income was contributed from our U.K. business. From an operating profit perspective, around about 70% of the operating profit was contributed from our South African business. From a divisional performance perspective, our wealth and investment business contributed 26% to the overall operating income, with the specialist bank contributing 74%. From a profitability perspective, you see around about 8% contributed from group investments.
That includes the return on the 25% that we hold in Ninety One, and other investments that we have chosen to represent separately from our specialist banking businesses, so that you actually can evaluate the franchises independent of these group investments that we hold. The wealth and investment business contributing similar to operating income at 26%, and the specialist bank at 66%. Let's get a little deeper into the franchise businesses, and let's start with the specialist banking business in South Africa. Looking at some of the core drivers, net core loans and advances did decrease by 1.6% in the period to ZAR 284.4 billion. That was mainly driven by the fact that our private client book remained relatively fat, and I will give you some detail later on when I decompose the loan book.
We did see that corporate South Africa, in the main, remained fairly defensive from a balance sheet perspective, and also fairly cautious from an investment deployment perspective, given the economic outlook. Therefore, we did see a reduction in our levels of corporate activity over this period. In particular, one of our business lines, Investec for Business, which deals with trade finance and import solutions, did see lower activity levels given the uncertain outlook, and again, corporates being cautious on the deployment of working capital given the uncertain outlook caused by the COVID environment. Customer deposits remained strong. A reduction of 2.8% to ZAR 365 billion in the period is really part and parcel of our overall liquidity management. From an operating income perspective, overall operating income decreased from ZAR 6.3 billion for the half year to ZAR 5.8 billion in this half year.
It was quite an even impact across various line items. If I unpack that, net interest margin did contract, I think, more than we would expect at about 41 basis points in this period. When we look at it from an overall year perspective, we would expect that in the second half that this will recover by at least half, if not more, of that reduction in basis points. That's as a function of the fact that our assets have repriced earlier than liabilities, and the nature of the sharp decrease in interest rates in the market, particularly over the period January to March. If we compare to prior year, there's been an overall 300 basis point reduction in interest rates.
There is an impact that will linger, and lower interest rates does result in a lower contribution on our effective endowment capital that we hold, and the fact that we continue to hold a defensive cash position on our balance sheet. From an activity level perspective, lending and transactional fee income was impacted by the sharp slowdown that you saw on Fani's slides, particularly between April and June. In fact, as we saw the economy open up in September, we saw activity levels above the prior year. I think there will remain volatility as we see activity levels impacted by cautiousness around economic activity. I think the resilience of our client base is starting to reflect as the economy is much more active.
From an investment income perspective, within the franchise businesses, the investment assets within the pillar did generate lower dividend flow income in the period, as well as lower opportunities for realizations. Therefore, we have seen lower investment income. We did have positive momentum in terms of markets because there has been a recovery since the end of March. Some of our listed stocks did contribute positively. We have continued to adjust down some of the valuations related to our non-listed portfolios. From a cost-to-income ratio perspective, the overall cost-to-income ratio for the specialist bank in South Africa was 55.4%. That is a bit weaker from where we have operated historically, and that's notwithstanding the fact that costs have reduced by 6% in the period. That included a reduction in variable as well as discretionary spend in the period.
You will see in both South Africa and the U.K., headcount has been quite conservatively managed throughout this period as we ensure the strength of the overall business. From an operating income perspective, a reduction of 8.7% as I had unpacked that. Turning to our banking business in the U.K. Here, from a net core loans and advances perspective, we saw an increase of just under 1% for the period, so annualized at closer to 2%, growing to GBP 12 billion.
That was mainly experienced within our high net worth mortgage book, which continued to experience higher growth levels as we continue to expand that particular base. Similar to South Africa, we saw lower overall corporate lending activity. Customer deposits in our banking business in the U.K. grew by 2.4% in the period to GBP 15.6 billion. Unpacking operating income, again, very similar effects that we saw across our banking businesses.
Net interest income did decline by 2.1% over the period, with net interest margin reducing by about 25 basis points since September 2019. That reduction, I think, mainly driven by lower interest earned, again, on our balance sheet position. Similar to South Africa, we are experiencing an improvement as repricing of liabilities takes effect, as well as repricing for credit risk. From a cost to income ratio perspective, overall cost to income ratio did reduce in the current period, and that's within the context of having reduced operating costs by 12%, which is mainly driven by a combination of variable remuneration and discretionary costs. Again, we will unpack that. With operating income reduced by 21.1%, overall cost to income ratio for the period was at 80.7%. From a wealth and investments perspective, again, let's focus on the drivers.
Turning to our South African business, I think we were quite pleased in the period with net inflows into our discretionary platform of ZAR 3 billion, and positive markets mainly driving the increase of funds under management by 16.2% up to ZAR 293 billion. We did see outflows in our non-discretionary funds, but that's really off the back of clients managing their portfolios. Adjusted operating profit for the period increased by 2.3% to ZAR 264 million. That was supported by strong demand for our offshore offering, which does yield foreign currency earnings, as well as increased brokerage activity, particularly in the early stages of the period. Higher average annuity and discretionary fund, as well as cost management, continue to contribute. We did experience lower interest rates, and that has a somewhat negative impact.
From an operating margin perspective, the operating margin improved from 32.3% to 32.8%, with operating income up 1% against operating costs increasing by 0.4%. Our wealth and investments business in the U.K., here again, with positive market momentum, we saw funds under management increase by 13.3% to 37.6 billion. We did experience net inflows over the period of GBP 315 million into the portfolio. From an operating profit perspective, we did see a reduction of 5.2% to GBP 28.9 million. That was notwithstanding the fact that we did have higher funds under management. As Fani had alluded, there were lower market fundamentals affecting the level of fees earned in the period. Brokerage was strong in the period, particularly on our non-discretionary funds, as clients continue to manage the underlying portfolios.
Lower interest rates does have a negative impact, and that has been absorbed effectively into the base given the current interest rate outlook. From a cost perspective, costs were well managed in the period, but there were increases in regulatory costs, particularly the FSCS levies that we contributed. From an operating margin perspective, a slight decline from 18.8% to 18.6%, really influenced by a slightly higher reduction in operating income at 4.4% compared to a reduction in operating costs of 4.3%. This is a new pillar, which is group investments. Given our holding in Ninety One, we felt that it is appropriate to reflect these assets, which at the end of the day are assets that the group has generated through various historical activities and platforms.
The main pool of assets in these, which we have separated from our franchise specialist banking business, is our investment in Ninety One, our investment in IEP in South Africa. Our investment in the Investec Property Fund and our investment in the Investec Australia Property Fund. The Investec Property Fund delivered its results yesterday. What you see in this slide, it's really an unpack of every income statement line that is influenced by the fact that we consolidate some of these investments, and that there's a large portion attributable to minorities. For example, the Investec Property Fund, we hold 24% interest in the fund, and recognize the impact on the left-hand side of this graph on 100% basis, and then allocate the portion attributable to minorities in non-controlling interests.
The large negative valuations is driven by the fact that the funds have reduced the carrying value of their property investments, as is experienced in these markets. Lower valuations, and lower equity accounted income from IEP, which is really a function of the lockdowns that you saw, which would have affected activity within the portfolio itself. A large portion of the reduction is effectively reduced out of the numbers through our non-controlling interest. In this period, we equity accounted about GBP 18 million of income from Ninety One, who released their results two days ago. We anticipate, not anticipate, but we will receive a dividend of about GBP 14 million on about the 23rd of December from that particular investment. The rest of the portfolio effectively accounting for the net reduction from GBP 30 million contribution last year to GBP 13 million in the current period.
Now if we look at revenue, this is really bringing the picture back to the combined group. Overall operating income decreased from GBP 959 million to GBP 729 million. Net interest income, net fees and commissions really driven by the fundamentals that we have spoken through. Investment and associate income, driven by what I've unpacked in our group investments portfolio. Trading income driven by what Fani had mentioned was a GBP 53 million, effectively, loss recognized in the period, and thus a reduction in trading income of just over 100% in the current period. That is associated with our financial products business in the U.K. and effectively our structured deposit business. In this current period, what we have done, is effectively stopped any new business associated with some of the high risk profile in that particular book.
The heightened cost of GBP 53 million includes costs incurred in the current period to reduce risk in the portfolio and to exit certain elements of the portfolio. This is still effectively a deposit-taking and a successful business overall, and we continue to incur risk management costs navigating the current market. We are guiding to the fact that in the second half, we will continue to see heightened costs experienced. That's really off the back of continuing to execute de-risking of the underlying portfolio, which places us in a much better position as we enter into the 2022 financial year and the 2023 financial year. From an operating income perspective, you see the mix with annuity income increasing to 81.1% as the level of deal income in this type of environment has had a lower weighting on our overall revenue.
From an earnings driver perspective, again, a summary of what was presented from the divisions, our third party funds under management increased from GBP 45 billion up 15.5% in the period to GBP 52 billion or 14.6% on a neutral currency perspective. That was on the basis of net inflows of GBP 336 million in the portfolio. Driven by recovery of markets that we have seen since the end of March. Core loans and advances increased by 1% to GBP 25.2 billion. That is a reduction of 0.4% in neutral currency with strong performance within our private banking business, particularly in the U.K. platform. Customer accounts up 1%. If we unpack some of our loans, firstly I will start with the South African loan book. Here we saw flattish performance within our mortgage and high net worth lending books.
That includes turnover as well as new activity in the period. Our property lending as well, relatively muted on the early part of this particular period. The negative movement on the portfolio, again, being driven by corporate lending. We did see strong growth within our corporate and acquisition finance portfolios, and a reduction in other portfolios as corporates repaid and managed their balance sheet liability positions as well as lower activity levels. Unpacking the U.K. net core loans and advances, you see strong growth in our private client lending activity of 11% in the period, as well as high net worth and specialized lending of 16% in the period. This has been a core strategic area of focus for the group, and we are pleased with the level of growth achieved.
There was positive momentum also achieved with some of the regulatory initiatives in the U.K., particularly around stamp duty relief. The corporate activity in London or in our U.K. business, and other jurisdictions remaining relatively steady in the period, but with no real growth experienced. Coming back to the income statement, our cost to income ratio has weakened from 67% to 72% in the period. As Fani had highlighted, that's driven by the fact that in neutral currency, revenue was down 17.8%, with operating costs reducing by 8%. Operating income was influenced by lower net interest margin and valuations offset by continued activity levels within our underlying franchise portfolios. From a cost perspective, the main areas in which we experience reductions in costs related to personnel, where we had fixed personnel costs reducing by 6.2% in the period, as well as marketing costs.
That reduction really driven by us, the activations in the COVID-19 period reducing. We did eliminate certain sponsorship arrangements, and obviously, a tighter focus on overall allocation of resources. Looking at impairments. Impairments, it's important to note that we did report at the end of March 2020. We were already effectively in a COVID environment at that point in time, and we did see a marked increase in impairments as we reported. With overall impairments increasing from about GBP 31 million in the first half of last year to GBP 102 million in the second half. In this period, we continue to increase our impairment levels with the overall impairment charge at GBP 66 million. That, as Fani has highlighted, is mainly driven by the update to our macroeconomic scenarios.
Having applied scenarios that we generated off the back of the March results now into the September results. The reduction in the macroeconomic environment, I think, really driven within the first half of this financial year. There has been an increase in some of our stage three provisioning, as we have continued to ensure that we are well covered, taking into consideration collateral. For the past 12 months, we have raised impairments or created impairment charges to the income statement of around about GBP 168 million. Looking at it by geography and a South African perspective, our net credit loss ratio closed at 35 basis points for this period, significantly up from 18 basis points and ahead of our long-term experience. Significantly lower than what we had experienced in the second half of last year, where our credit loss ratio was 55 basis points.
From an overall charge, again, in South Africa, cumulative charge over the last 12 months of about ZAR 1.4 billion, with impairments charged for this period of GBP 573 million, markedly up from last year, September, but below our second half experience. That's a consistent experience as we move on to our results in our U.K. and other geography. Here, our credit loss ratio was at about 60 basis points, compared to 97 basis points in the second half of last year and 28 basis points in the first half. From an overall group perspective, we guide towards a credit loss ratio of between 30 basis points-40 basis points through the cycle. With the group credit loss ratio at about 47 basis points, we remain elevated.
From a balance sheet provisioning perspective, on the left-hand side of this slide, we detail our PLC or our U.K. and other geography, and on the right-hand side, our Southern African businesses or Investec Limited. Balance sheet provisioning, again, providing you a mix between our stage one, stage two, and stage three portfolios. Seen an increase in our stage two provisioning, as we did migrate a larger portion of our book into stage two, and I'll unpack that in the next slide. Overall, impairments really driven by migration between portfolios and particular write-offs that would have taken place in the current period. Our overall coverage ratios for stage one at 30 basis points, stage two at 3.4%, is down from our coverage ratio of 5.4% in the prior year. Here, we increased our stage two portfolio from about GBP 576 million to around about GBP 1.3 billion.
The migration into stage two was really driven from our forward-looking macroeconomic scenarios rather than any observed credit deterioration or credit quality deterioration. The portfolio that would have been migrated to stage two based on credit quality will continue to maintain a higher level of coverage. Given the lower probability of default on the portfolio that has migrated into that particular staging, we saw a net reduction in overall coverage ratios. Stage 3 is really a function of the specific assets in that portfolio. In the current period, we would have had some write-offs for assets that were more fully provided and closure on those particular transactions. Therefore, closure on our views. Therefore, a slight reduction in our stage three provision. From an Investec Limited perspective, we continue to see an increase in overall balance sheet provisioning with our coverage on stage one increasing 2.5%.
Stage 2, relatively stable at 2.4%, and stage three at 33.3%, again, is a function of a mixture of the assets and write-offs experienced in the current period. This slide effectively details the migration that we saw between stage one and 2 in PLC and in South Africa. Overall, our stage two portfolio at 11.5% compared to 5.1% in the prior year. In South Africa, it's 6.4% compared to 5.3%. Again, the majority of the staging is really driven by modeling factors that we have brought in. Migrations between stage two and stage three are really specific to exposures, and we haven't seen any specific trending either within areas that we may be concerned at from a COVID perspective and the overall portfolio. Trying to bring the picture to a close, a couple more slides.
ROE on this slide, we unpack it for you between the various businesses. The specialist bank in South Africa generating an ROE of 9.1% in the period and utilizing around about 39.2% of the capital base of the group, with the specialist bank in the U.K. generating a 0.7% ROE with a credible performance from the underlying portfolio offset by the reduction in trading income arising from the GBP 53 million loss that I had mentioned earlier. Our overall wealth and investment businesses continue to generate significantly to the underlying ROE of the business. These businesses, their capital requirements are really driven by their operating income. The higher your operating income, the higher your capital requirement. In the U.K., we did have an acquisition historically that has goodwill associated with it. Group investments in the U.K., that's solely the return from Ninety One.
In South Africa, it's the return from Ninety One and a positive contribution from our Investec Australia Property Fund, offset by negative movements given the valuation adjustments coming through in this particular period. Overall, ROE coming in at 8.1% for South Africa and 2.8% from a U.K. perspective. I think it's very important that these ROEs are contextualized within the environment that we are operating in and what we've seen from across the sector. From a return on tangible equity, the material difference in this ROE is really represented in our wealth businesses, which includes a higher level of intangibles. From a balance sheet perspective, overall capital ratios remaining robust in both South Africa and the U.K. I think it's important to note that we report on the standardized basis in the U.K. and on the FIRB basis in South Africa.
In South Africa, we continue on the journey to AIRB. We have received model approval on several models to migrate to AIRB, and we're currently on a parallel run process for implementation successfully in January. There is one material portfolio where we are still in discussions in terms of the overall modeling approach with the SARB. We continue to quantify that the differential to AIRB is around about 2% positive uplift on capital. From a liquidity perspective, loans and advances to customers as a percentage of customer deposits was at about 76.4%. We've continued to manage and maintain high levels of readily available, highly liquid assets with overall cash and near cash at GBP 12.9 billion. Now having presented the current results, and we haven't really done this in the past, but we have introduced a slide which gives you a view of our expectations to the year end.
I think it's in the context of it is a forecast and take it as such. Overall, we anticipate that client activity will continue to recover, and we've seen that in the months past September, and we expect that trend to continue. Net interest margin, as I've indicated, is also expected to improve notwithstanding the low interest rate environment for factors that I've highlighted.
Non-interest income is expected to improve relative to the first half, overall, we still expect double-digit, and we say early double-digit decline for the full-year given negative movements on investment income. With regard to trading income, we expect it to continue to be markedly lower, driven by the fact that we will continue to manage down risk in our structured products book, that we anticipate, if markets remain as they are, to continue to incur the same level of risk management costs that we incurred in the first half. From an expected ECL perspective, we expect to see continued moderation, costs from an overall full-year perspective are expected to decrease in the mid-to-upper single-digit in overall. Bringing all of this together, we expect to be ahead of the first half in the second half of this financial year.
Fani, I now hand back to you to bring us through.
Nishlan, thank you for that comprehensive unpacking of the results. I would now like to cover sustainability. We look at sustainability as an integral part of our business. That's why we continue to integrate it into business strategy. As we always say at Investec, we live in society and not of it. This is quite an important part of who we are and what we do. Also, we do see significant business opportunity in sustainability. We talk of creating a financial and social value by living in a sustainable way, ensuring a low carbon and inclusive world. Our framework is based, as I said, on living sustainably in our operations. We also partner with our clients on their ESG journeys and we offer sustainability products and services.
I did earlier on indicate when I talked about how we have reacted to COVID, how we have partnered with our clients to distribute certain aid to communities. We also align our community initiatives and corporate social investment to our SDG priorities. If you look at our priority areas, SDG 10 being reducing inequality and SDG 13 being climate action, are our core priorities, and secondary priorities include clean water and sanitation, affordable and clean energy, industry innovation and infrastructure, and a few others. In our corporate banking business, a number of opportunities have arisen out of some of these areas of work. Our advocacy and thought leadership is based on our active participation in the United Nations Global Investors for Sustainable Development, the UNGISD. We also work with industry in the U.K. and South Africa to ensure policy coherence around sustainability.
As there is a transition towards a more sustainable world and planet, in the transition around global warming. We use the strength of our brand to educate and promote sustainability thinking. Just looking at what we have been able to achieve in the period under review, we published our first standalone TCFD report, the Task Force on Climate-related Financial Disclosures. We tabled some resolutions at our AGM in August, where we received overwhelming support from our shareholders, 99.95%. We committed to net zero during this period and purchased carbon credits to achieve same. We were ranked number 55 out of 5,500 corporates in the Wall Street Journal Top 100 Most Sustainable Companies and ninth in the social category. In South Africa, we are rated level 1 in terms of the financial services code.
As I indicated, we have launched a number of ESG-related products, including in the U.K. To conclude the presentation, I would like to take a bit of stock as to where we are. Clearly, we have concentrated on protecting our resilient balance sheet, have kept high levels of capital, and we are lowly leveraged, and we have high levels of liquidity to continue to navigate a crisis of our lifetime, and to continue in that vein, to support our clients and to be prepared to fund future growth. That remains our position, and our confidence has been demonstrated in the fact that we have declared a dividend in this period, and our expectation of the second half is for a much improved performance. We believe the business is well positioned for the long term.
Over the last 18 months or so, we have engaged on a program of simplification. You will remember that we did exit a subscale wealth operation in Ireland. We did close Click & Invest, the robo-advisor in our wealth business, because we did not believe we would get to the kind of scale that we required. We exited the Hong Kong investment portfolio because the risk reward profile was inappropriate as far as we were concerned. We have continued to simplify our business. We will be substantially complete in terms of our simplification process by the end of the current financial year. We announced this week the conclusion of the sale of Investec Australia Property Fund Management Company with proceeds of about AUD 40 million. We also have completed a JV partnership in India with the largest bank in India to strengthen our position there.
We have announced earlier during this period, closer integration of business enabling functions in the U.K. As announced earlier, regrettably, we will have about 210 of our colleagues be made redundant as a consequence of that. If you look at what we have been able to achieve in terms of cost discipline, because that is what we have control over in this period of crisis. We have made significant strides in terms of cost discipline. In the U.K. specialist bank, fixed costs have been reduced by GBP 40 million since we presented to the market during February 2019, during our Capital Markets Day. The changes that Ruth and her team have announced will obviously impact future costs. We do expect costs to decline in the medium term within that business. Group costs, we expect to reduce to under ZAR 35 million at the end of FY 2020.
A 24% reduction to the level that we saw at the Capital Markets Day presentation. We also have had a strong focus on growth. We indicated in reporting on these numbers of the progress we have made in our high net worth mortgage lending book in the U.K., and that we are on track to reach the 6,500 clients that we needed to reach to break even. From there, we will continue to grow clients and to have that platform move into profitability. We have also launched in South Africa an online business banking platform, we expect over time to do well out of that platform. Our Investec Life proposition has gained traction. As we look forward, we will have a strong focus on growing those selected initiatives that we have chosen to invest in.
While we will be quite disciplined on cost, we will continue to invest for the future. We had also talked about capital optimization and the right sizing of our direct investment portfolio in line with our stated strategy. In South Africa over this period, we have seen that portfolio reduced by ZAR 1.1 billion. Clearly, in these markets, it is difficult to right size that portfolio because we are not in the business of throwing away valuable assets. We will not sell for the sake of selling. The progress has been much slower than we would have anticipated given the environment. We think the fundamentals of our business are particularly strong, and we're confident that our business is well positioned for the long term, and we have deep and well established relationships with our clients.
We continue to foster a client-centric entrepreneurial culture where our people live for our clients. As we say colloquially, we do break china for our clients. We remain committed to great client experience, demonstrated by our agility and increasing intensity of client engagement in a time of need. We will continue to execute on our strategic plan. While our medium-term targets are under review given the effects of the pandemic on the economies in which we operate and the markets that we operate in. We are, however, making significant progress to advance our strategic objectives, positioning the business for the long term. We are now ready to take questions. Thank you. I think we will start with Audio Africa, and then thereafter go to questions that have been emailed to us.
Thank you, sir. For those on the conference call, if you would like to ask a question, please press star and then one now. If you decide to withdraw the question, you can press star and then two. Again, if you would like to ask a question, please press star and then one. The first question we have is from John Storey from JP Morgan.
Hi, good morning. Thanks very much, Fani and Nishlan. I appreciate your time and the insight this morning. Just wanted to get a quick sense on the size of the structured book that you referenced today. Just trying to have a look at the ZAR 53 million cost relative to the size of the book, if you could just provide some insight on that. Thanks very much.
Yeah, John, we haven't disclosed the size of that book. Needless to say, we've given you guidance as to what we think the cost to reduce risk and to manage risk will be. We've given an indication for second half costs of ZAR 53 million, and given the activities to reduce cost already taken and those to be taken, we believe in the next financial year, those costs would be less than half. As Nishlan indicated, we have ceased the issuance of the complex, and high-risk products that we have seen in the portfolio. Just to give you an indication, the capital at risk product are of a kick- out nature. As an example, if the FTSE were to increase over the next 12 months to about 7,300, 7,500, the size of that portfolio would reduce dramatically.
Clearly, obviously, if you continue to have lower markets, you would have a tenure of two to three years. We've taken significant action to contain the risk. We've given the market very transparent guidance as to what we think the relevant costs are likely to be going forward.
Thanks very much.
Thank you, sir. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. Sir, at this stage, there seems to be no further questions in the question queue.
Thank you. We'll take questions from the email line. Tesh?
Okay. The first question is from Mark du Toit. He's from Oysterc atcher Investments. I'm going to read verbatim. Could you give me more detail on the hedging loss in structured products? What products caused these losses? Is it perhaps collars that you have written or what is causing these losses? Is it related to listed property stocks?
Not related to listed property stocks. As indicated, we have a structured deposit book where we issue products raising deposit at the back of that, to our clients. Obviously we have to hedge out that risk when we have these products on book. In volatile markets, it became difficult to hedge the underlying risk given firstly, the level of volatility. Second, the drying up of liquidity in terms of some of these products. As I said, some of the products were quite complex and had a number of indices, and we have substantially reduced some of those products. We will continue to do so. I think we can give further details to, what is his name?
Mark du Toit.
To Mark du Toit, if he wants to engage. Clearly, we wouldn't give any detail to one person as opposed to the whole market. I don't want to spend all the time talking about this one issue. As I said, we've given very clear guidance as to our expectations of costs going forward.
Great. The second question is from Diana Mawandegia. She's from Rezco Asset Management. As your capital position has improved, how are you currently looking at your associates? For example, your associate IPF, Investec Property Fund. Are you looking at selling your stake at the current low share price? You aim to complete the simplification plan by the year-end. I would like to know if Investec will keep holding IPF if IPF share price does not recover.
I don't want to address one specific asset. I think as a general principle, while we want to reduce the size of our investment portfolio, as I indicated, we will not do so in a manner that destroys value. That's as a general principle. You will know that we had wanted to sell 10% of Ninety One during the demerger but felt that the price that was on offer at the time during the demerger was inappropriate, and we decided to hold on to Ninety One, and it has turned out to be a good call on our part. We are not in the business of selling assets in a sub-economic way.
Okay. The next question is from Chris Stewart, Ninety One. Please, can you give a sense of the financial impact of the IAPF ManCo?
Is that the go forward financial impact?
Yeah, that should be the go forward. Yeah.
Yeah. I think in the overall context of the results, it will not have an overall material impact in terms of earnings.
The last question is from Masechaba Makura from Melville Douglas. "Thanks, Fani and team, for a comprehensive presentation. Please unpack the regulatory hurdles you were able to overcome to be able to declare an interim dividend. Many thanks.
Yeah. I tried to answer the question during my section of the presentation. As indicated, we are supportive of the regulatory objective of preserving capital, given the level of uncertainty going forward, first. Second, given the need for banking institutions to support the real economy, Investec has been in the forefront in South Africa, and we play a part in the U.K. in supporting the real economy. We have participated in the different schemes that have been set out. We support those objectives. As indicated, we did not declare a final dividend in May when we released our results, in keeping with the spirit of those guidances.
Clearly, our board looked at our capital position, looked at our outlook over the next little while, and believed that we have the capital resources both to continue to support the economy, to weather the storm, and to be able to declare a dividend. Equally, I did indicate that the majority of the dividend is supported by the proceeds that we will receive from Ninety One and also that we receive from our wealth business. The majority of the dividend will be from capital light businesses, and we believe that we will have substantial buildup of capital over this period, given that we did not declare a dividend and that, as indicated, our loan book has not grown significantly given the level of uncertainty in the market. Clearly, when we do this type of thing, we will never want to surprise our regulators.
There would have been appropriate interactions, and regulators wouldn't either approve or not approve this type of action because it is always up to the board. Our actions will not be a surprise to our regulators.
Shall we do one more question? Chris Stewart, Ninety One. "Just clarifying that you're referring to the profit on disposal of the IAPF ManCo sale, not the ongoing impact.
In terms of the gain on the sale, that will be in our second half results. It was held in the U.K. portfolio, so will be in the overall results from a U.K. perspective.
Those are all the questions.
Do we have any further questions from Audio Africa?
At this stage, sir, there are no questions.
Okay, ladies and gentlemen, thank you very much for your interest in our business and for your attendance of the presentation. We hope to see you in another six months or so when we present our final year results. As indicated, we would expect that performance in the second half will be better than the reported performance, given our expectation around a number of the areas that we spoke about. Thank you so much for your attendance.