Welcome to this presentation of the annual results of Investec for the year ended 30 March 2019. I will start off by giving a broad overview of the results. Thereafter, Nishlan will take you through the detail of the results, and Hendrik and myself will come back to give you a brief update on the businesses and review of the past year. After that, we will be ready to take your questions. I am just trying to navigate this. Okay, there we go. All of us are aware that we are in the process of implementing a strategy to focus the business and to simplify it as we go forward. This strategy entails a planned demerger and separate listing of the Investec Asset Management business on the one hand, and on the other, the repositioning of the bank and wealth business for a sustained growth over the long term.
If we look at the results very briefly, operating profit increased by 9.4% to GBP 664.5 million Rand. Pound, sorry. Thank you. Adjusted earnings per share increased by 3.6% to GBP 0.511. Dividend per share grew by 2.1% to GBP 0.245. ROE improved from 12.1% to 12.9%. Capital ratios remained sound in both South Africa and the U.K., I wish to highlight that the group has received approval to go to FIRB in South Africa, this results in a pro forma core equity Tier 1 ratio of 11.6%. This solid performance was supported by substantial net inflows of GBP 6.1 billion in the Investec Asset Management business. Really great performance. This led to higher average funds under management and annuity fees. Secondly, we saw good clients acquisition and loan book growth in the banking businesses with very pleasing increases in net interest income. The loan book grew to GBP 24.9 billion.
We saw a significant improvement in the performance of the U.K. specialist bank, with impairments significantly down as we have now dealt with the legacy book. Within the wealth business, we saw positive discretionary inflows, with total net inflows of GBP 366 million. This performance was offset, on the other hand, by weaker market and deal-driven income reflecting the tough environment in which we operate. In the banking business, we saw investment income being significantly lower than the previous year. In the wealth and investment business, there was a non-recurrence of investment gains in the wealth and investment business in the prior year, which we did disclose, and in the current year, we had a write-down of the Click & Invest capitalized software development as we have decided to discontinue the Click & Invest platform.
If you look at these once-off items around the wealth business, the core wealth business actually recorded earnings growth in the year. It really is important to give that context to the wealth business. While our operating costs were up ahead of revenue for the full year, we have, as you probably know, committed to a program of cost containment and revenue growth as we go forward. We are confident that we will be able to meet the cost to income targets that we have communicated to the market. These results, in our view, were achieved within the backdrop of challenging operating environment with both the two core markets, being the U.K. on one hand and South Africa on the other, experiencing significant weak economic growth. As you know, the equity markets were very mixed as well.
Sorry, before I go there, let me just give you a bit of a perspective on where we are since we announced the demerger, because it is important that we take into cognizance the fact that the group is in transition. In the meantime, we operate as one group and we are making some progress. With respect specifically to the demerger, you may recall that the demerger was announced on the 14th of September last year. At that time, we did announce that we expected that we would be able to complete the process of demerging asset management within a year. At the moment, we are still on track to achieving that demerger by the end of September. We are on track. Secondly, you will know that the group has gone through a leadership transition. That transition have I got the right slide on the board? Okay. Sorry.
There we go. That transition happened both at the group with respect to the founding executives retiring, but also inside of a number of the divisions. More specifically, I would like to announce again that we have appointed Ruth Leas as Chief Executive of the bank here in the U.K. We're quite excited about that. Along with Ruth, we've made other appointments. As an example, Ciaran Whelan will be the Chief Operating Officer of the bank and wealth business. David van der Walt, who was CEO of the bank here in the U.K., will become CRO, Chief Risk Officer, of the group. Lyndon Subroyen will be the Global Head of technology and digitization. Even as we discontinue Click, our commitment to digitalization and to technology remains particularly strong.
The wealth business will be run by Henry Blumenthal and Jonathan Wragg as Steve Elliott will be retiring at the end of the current financial year. That is March 2020. Steve, thank you very much for your great service to this business. The selected growth initiatives that we are pursuing are on track. As an example, in the private bank, we are seeing great traction with respect to client acquisition. In other areas where we have indicated we are pursuing growth, we are seeing traction. We can talk about that a little bit later. We have, in the meantime, also taken a number of actions as we proceed to simplify and focus the business. As an example, we have disposed of our Irish wealth business as we did not have the sufficient scale in that market. Similarly, we have restructured our prime broking business in Ireland.
As indicated earlier, we discontinued our Click & Invest platform because after a review of the market opportunity and the relative cost of operating Click, we decided that we will discontinue Click. We will, however, continue to invest quite strongly in digital platforms across the group. Further simplification has occurred with us winding down the Hong Kong non-core investment portfolio. Just to be clear, our asset management business continues to operate within the Asia region. I did indicate that our cost-to-income ratio remains elevated at the moment. I'm sure if you look at the results, you will see that we have begun to make some inroads into group costs with a reduction in this period of GBP 4 million. As I indicated at the Capital Markets Day presentation, we have identified more savings as we go.
We continue to focus on capital allocation and improving shareholder returns. We remain confident that we will achieve the performance targets that we have communicated to the market. We have positioned our businesses to ensure that they meet growth objectives and deliver long-term shareholder returns. Nish, over to you. Thanks. I'm going. Thanks.
Okay. Thanks, Fani. Let me get into the financial review for the last year. Just as a reminder, this is the entire group. I think the first contextual area to look into is the backdrop of the economic environment. In particular, if I look at the equity markets, I draw your attention to the third quarter of last year, where we had seen quite a significant drop-off on markets, which would have had an impact on effectively the momentum on revenue build across some of the businesses. The exchange rates remained volatile over the period. We saw political uncertainty in the two key geographies that we've operated in, resulting in market volatility that impacts the results.
I think if we look at the overall results, however, our return on equity for the combined group at 12.9%, improving from 12.1% at the end of last year. Our cost-to-income ratio at 69.9% is higher than our target of 65%. I draw your attention to the point that I made on revenue in the period. In fact, if I look at the underlying cost base, the bank and wealth grew its cost base by 2.4% in the current period, notwithstanding certain benefits in the prior year. The asset management business grew its cost base by 8.9% in the period, reflecting investments in the platforms as well as implementing MiFID and various other regulatory requirements in the current period. Our capital ratios remained healthy across the businesses.
Fani has mentioned that we've adopted FIRB, which is effectively a risk-based measurement for capital in South Africa. That adoption is our permission applies from one April. We have presented pro forma numbers, and it will be the measurement basis for capital going forward for the South African business. The U.K. business continues to measure capital on the standardized basis. The adoption of FIRB has added just over 1% to the capital ratio for South Africa, with the CET1 ratio at 11.6% and the PLC at 10.8%. Based on our total dividend for the period of GBP 0.245, our overall dividend cover ratio is about 2.2 times.
If we have to unpack operating profit, which grew from GBP 607.5 million to GBP 664.5 million, you would see that overall, the U.K. business grew operating profit by 36.1% over the period, South Africa grew operating profit by 1.8% over the period. If we had to further unpack that in terms of businesses, the specialist banking businesses saw good loan book growth across the geographies. There was a significant impairment reduction in the U.K. business as legacy has now been dealt with fully. We have, across both geographies, low investment income given the economic environment. That extends across our unlisted and listed portfolios, as well as our property portfolios in the group. Our wealth and investment businesses experienced positive net inflows, particularly within the discretionary funds. We did have a reduction in some of the non-discretionary funds, with elements of that intentional.
However, the earnings were impacted by non-recurring items, in particular, again, in the prior year on a realization of an investment, and in the current year, additional software write-offs of around about GBP 6 million with relation to the Click platform. The asset management business experienced substantial net inflows of GBP 6.1 billion over the period, That has resulted in growth in AUM and annuity fees. However, market volatility would have impacted the volume growth, particularly from the third quarter, and lower performance fees in the current period, as well as the increased cost base that I mentioned earlier. Specialist bank in the U.K. grew profits by GBP 17.6 million. In South Africa, growth of 2% in ZAR terms. The wealth businesses, as I had mentioned, down during the period. Group costs, we have reduced it by GBP 3.2 million over the period, I've discussed the asset management businesses.
In terms of the core drivers, I think it's important to contextualize that the ZAR had depreciated by 13.1% over the period, That has an impact on the closing balance sheet and closing fund numbers. However, notwithstanding that, fund has grown to a record level of GBP 167.2 billion across the book, with a growth of 4.1% and net inflows experienced in the period of GBP 6.5 billion. Customer accounts and core loans and advances growing by 1%, core loans dropping by 0.8%. In neutral currency, core loans is up by 6.8%, with the specialist bank in the U.K. experiencing a growth of about 8.5% over the period, supported by both corporate lending as well as private client lending over the period. In South Africa, the book growth was 5.8% over the period. In terms of operating income, operating income grew from GBP 2.44 billion to GBP 2.49 billion over the period.
Net fees, which makes up about GBP 1.4 billion of that number, in the period, growing by 1%. If we had to just unpack some of the key line items, net interest income grew by 7% over the period, supported by the book growth that I mentioned in the current period and the prior period, as well as a positive endowment effect resulting from higher interest rates that have been applicable. Net fee income growing by 1%. In fact, if you had to unpack that number, the annuity fees had good growth over the period, offset by a reduction in performance fees, brokerage fees, and transactional fees earned within our wealth businesses as clients effectively slow down their activity levels. The investment and associate income line item dropping by 33%.
If you had to unpack that, a higher level of associate income as our investment in IEP had experienced a good realization in the period and lower net investment income, given the market environment that we faced. Trading income increasing by 21% or GBP 29 million. That does have a currency impact, which to some extent is related with our investment portfolio. Customer flows are slightly down in the current period. Our jaws ratio with the higher cost income ratio has tightened slightly over the period, with operating income growing by 1.8% and operating costs growing by 3.8% over the period. As Fani has iterated, the group remains committed to revenue growth and cost containment over the next while. In fact, that's embedded into the business.
From a cost perspective, I think there's two key lines to talk about, which is our premises cost, which was up 31% in the period or up by GBP 18.7 million. We had a combination of asset management moving into new premises, and there's an element of double rental, a concept that you would have heard of last year as we shifted our specialist banking business in the U.K. into new premises. We do anticipate some of those costs reducing in the next financial year. The other line is business expenses, which was up by 8% or GBP 15.2 million in the period. That really represents the change in the regulatory landscape as we implemented it across the businesses. I also draw your attention to the fact that personnel cost was up 2% over the current period. Depreciation, as well, up by 47%.
That really represents a shift from premises cost to Sorry, it actually is the investment in our platforms as well as that includes the additional GBP 6 million of write-off that we have processed on software in the current period. From an expected credit loss perspective, if we spoke about this last year, it's incurred loss, and the new IFRS 9 terminology expected credit loss. The reality is it's all got to do with impairments at the end of the day. Our impairments have dropped from GBP 148.6 million to GBP 66.5 million. You see the drop-off of the gray bar, as the bulk of the legacy book, which closed the year at about GBP 130 million from dropping about GBP 125 million since the end of March last year.
The credit loss ratios across the book remaining relatively at our lower end of the cycle at 31 basis points for the overall group. I think it's worth also noting that our stage 3 book reduced by 29% over the period. That is about GBP 520 million reduction. When I refer to stage 3, that's really what we call the default book, as you would have understood it in the past world. That makes up about 1.3% of our overall book. If you analyze equity has dropped from GBP 4.2 billion at the end of March to GBP 4.1 billion at the end of March 2019. We had already communicated one element of that drop as we adopted IFRS 9, which reduced equity by GBP 260 million. The other negative impact in the period would have been the 13% depreciation in the rand.
Notwithstanding those movements, we've had good retention across the businesses and maintaining a dividend payout ratio of about 44% in this period. Our earnings per share of GBP 0.551 against GBP 0.532 last year with a dividend payout ratio of 2.2 times and a total dividend of GBP 0.245 for the period. From a capital perspective, I think we've been through these numbers. I'm not going to reiterate any of them. I think capital remains sound across all of the balance sheets and the geographies. We've maintained our target ratios. Obviously, with the adoption of FIRB, we will shift those target ratios, and we've indicated that that will be in the region of 11% going forward. Our solid leverage ratios across the balance sheet is well represented. Liquidity levels with cash and near cash at GBP 13.3 billion for the group. I think that's the numbers.
You obviously have a detailed book, I'll stop there for now and hand over to Fani again.
Thanks, Nish. I hope you don't have to applaud again when I get off the stage, I'm going to be back, and Nish will be back a little later. I was remiss in not saying that Nish has been appointed as a Finance Director to replace Glynn. This is the first set of results where Glynn is not Finance Director. Well done, Nish. What do we have on this screen? Nish, you're going to have next time to help me. Okay, there we go. Okay.
Next slide.
Next slide, current slide. You can see why you need a younger Finance Director. He can show us the values a little bit how to use technology. We're going to look specifically at the Bank and Wealth group. Nish, what's happened here? Have I clicked too many times?
Yeah.
Enter. What do I do now? Come help me. Nish may have to stand here and help me out. Where are we?
Now you-
Please come help me operate this thing.
Sorry.
Okay.
This is the advice as well.
Yeah, I have some special notes on this one, so I operate both of them. Where are we? Okay, let's go back.
This is our slide at the moment, 23.
23. I want to go back to that slide there.
Okay.
Okay, thank you. We're going to go through both the asset management business and the wealth business, but a lot of what Nish has discussed in the detail will also relate to the bank and wealth business. I'm not going to go over all the detail that you may see on the slide. I'll try to go through fairly quickly as we go through the presentation. The bank and wealth business has a balanced mix of income across both geographies, business lines, and income streams. Operating income was marginally up to GBP 1.9 billion. Operating profit was up 13% to GBP 485 million. Operating profit in South Africa was up 1.8% in ZAR. That operating environment there was very tough. The results you see, I'm really very proud of because it was a tough environment to operate in.
In the U.K., the business showed an increase in operating profit of 36.1%, a well-balanced mix of income, as I said when I started. Looking at the wealth and investment business, again, Nishlan has covered most of the key issues here, being that we had an increase in funds under management. We saw an increase in discretionary funds under management, and this was partially offset by discontinued non-core, non-managed U.K. services. The operating profit seems to be down substantially, as we explained before, at 16.2% down to GBP 82 million. Below those results, the headline results, we saw pleasing growth in annuity revenue. Similarly, the performance of the underlying wealth business was particularly strong given where the markets have been and the economy is at the moment. I'm not going to go over the two issues that affected that business. We've mentioned them.
The investment gain in the prior period and the write-down in Click. The operating margin was at 20.6%, reflecting the impact of the losses in Click that we have disclosed in our results. Moving to the specialist bank, we'll start off with the specialist bank. In the U.K., revenue was supported by client activity with core loans up 8.5% to GBP 10.5 billion, as Nishlan indicated. Good growth in the high net worth mortgage book. For those who doubted our strategy around investing in the U.K. private bank, that strategy is beginning to pay, and you're beginning to see the impact of it. We also have a very diversified corporate client book. When we had our CMD presentation in February, David was able to show the distinctive positioning of our corporate bank and the fact that we actually have franchises that have developed over time.
We begin to see good growth in that diversified corporate loan book. As I said, we have had good client support both in the private bank and in the corporate bank. Now turning to operating income. Net interest income was up with solid lending activity and endowment impact as Nishlan explained. We had weaker performance in the investment portfolio. I'm not going to go into the cost-to-income ratio. I think Nishlan went into that and gave us practically what the movements were there. Needless to say, as he said, we are committed for the bank and wealth business to achieving a cost-to-income ratio by 2022 of below 63%. If you see where it is now at 70%, and in the next two to three years, we expect that to be at 63%.
That will be a consequence of both revenue growth, stopping losses in certain areas like, for instance, as we have talked about the momentum that the private bank is gaining. We're quite confident that we can get there in the time that we have indicated. Looking at the specialist bank in South Africa, the only point I will highlight here is that we had good growth in the private bank there. We saw good private client activity and muted growth in our corporate business. If we look at the operating income, again, growth in the private client interest and fee income. We've seen weaker performance, as Nishlan indicated, in our equity and property portfolios. The cost-to-income ratio in the South African Bank is already within the band that we have announced for 2022. The target there is 49%-52%, so we are already within that particular target.
Just moving on. This is an interesting slide as we look at the ROE trend within the bank and wealth business. Our medium-term targets are 12%-16%. Remember that our current targets with asset management in the business are 12%-16%. The improvement in performance post-demerger that we expect will be significant because we have very strong franchises and we have specific things that we can do to improve performance. At March 2019, our ROE was 10.4%. In February, we announced specific actions that we will take, and largely the enhancement will come out of revenue growth initiatives that are very targeted. It will come out of discipline around cost. I've already indicated some of the ratios that we intend to achieve with respect to cost to income.
We will be optimizing capital allocation, I will give you an example, I think in the next slide, of the impact of capital allocation. We will be looking to offer our clients across bank and wealth, and across north and south, products and services that the whole group offers so that we can capture a bigger proportion of their wallet. This is what we call One Investec, where we bring all the products and services and the power of the platform to our clients. In terms of cost to income, I'm not going to repeat what we have said already. If we go into slide 25, this is really an important slide because it tries to tell you why we believe the targets that we're looking at are achievable.
If you look at the bank and wealth cost to income ratio of 70% going to 63%, if you look at the ROE of the business going from 10.4% to 12%-16%. I'm going to deal specifically with ROE. If we start off on the left, looking at the South African specialist Bank, where the reported performance is 12.8%. I've mentioned that we have a low performing investment portfolio there, which is returning 8.1%. The client franchises within the specialist bank in South Africa are already returning 14.2%. The target for the SA specialist banking business is an ROE of 14%-16%. As we reshape the investment portfolio by exiting certain parts that are non-core, as we reduce the overall size of that portfolio and reinvest into the client franchises, we will see the increase in performance in terms of ROE.
We know where the drags are, and we are dealing with them. Look at the U.K. specialist banking business. The overall business returns 8.1%, as reported. If you exclude the investment we have decided to make in the private banking platform, remember I told you that we've seen significant loan growth and a lot of that came from our private banking platform, that we have great support from our high net worth individuals. This is the piece that is still making a loss. You can see there initially indicates a return on equity there of -41.8%. We are on track with our strategy ahead in terms of reducing those losses and on track in terms of client acquisition. When we get to breakeven and profitability there, you can see the overall business, except for that platform, is already making 10.5%.
Our target for the U.K. specialist bank is 10%-13%. That's why we believe that the platform is strong, performance will be there. We've identified what we need to do specifically. In the long term, obviously, we've got to grow revenue, we've got to serve our clients, and we've got to be competitive within the market. If we go to outlook, we have very strong and leading market positions in terms of our client franchises. We're really positioned for long-term value creation despite markets being challenging. We look at value creation for our clients, we look at value creation for our staff, we look at value creation for the communities in which we operate, and we look for value creation for our shareholders, importantly. We will also continue to focus on our clients, our people, and our distinctive entrepreneurial culture.
What makes us different and what makes us as special to our clients as we have been. Our clients love who we are and what we do and how we do it. Our culture is particularly important as we move forward. Lastly, to repeat, we are committed to achieving our performance targets in the short to medium term. What are our strategic priorities? I'm not going to go through all this again because we have a very detailed capital market presentation, which you can find on our website, and we have very specific actions and activities that we will be engaged in. What I can say is, with respect to capital discipline, we are already seeing certain benefits in terms of repositioning of, in particular, the investment portfolio. With respect to building momentum in selected growth initiatives, I've spoken about the private banking platform in the U.K.
I can talk about the progress we're making in Investec for Business, which is our mid-market corporate offering in South Africa. I can talk about the progress we're making in the life business in South Africa. There are many identified activities that are tangible that we are pursuing. Cost management we've spoken about. We also have spoken about our commitment to deliver a shared value proposition to our clients across bank and wealth, as well as across geographies. Consequently, that will enable us to capture more value. We continue to invest in technology because we do believe that it will enhance client experience, it will leverage efficiencies, and it'll enhance innovation. We think the business is well positioned. We have a clear path forward in terms of delivery to shareholders. Hendrik, over to you. Thank you.
I'm going to be coming back, no applause, please.
He articulated the bank and wealth very, very clearly and the strategic priorities. I hope to do the same for the asset management business. Essentially, on an overview basis, we've been pushing forward, is the summary. Pretty tough markets in the second half of the year started with Q3, then improved conditions towards the end of the financial year, which obviously results into a revenue line, which was slightly disrupted. We're at record levels in assets under management, GBP 111 million. AUM up 7.3% over the period. We've had operating profit growth, again, inching forward, but at a historic high. An operating margin in line with reported at half year, really challenged to an extent by specific expenditure such as double premises, MiFID expenditure, and of course, continued investment, because this is a growth business and we're positioning it for growth.
We had some performance fees, which in comparison with previous years, didn't come through, which may recur or may come through in future again, depending on how we deliver. Essentially, a very healthy and robust platform looking ahead and in growth mindset. Just to remind you about the business' positioning. More than half, almost 60% or in the high 50s of assets, and it changes daily, what we run is invested in emerging markets. We haven't changed that. I remember a few years ago when emerging markets were down, people said, "What's your change in strategy?" There is no change in strategy. Strategy is clear. We're in line with the investable universe of the world, and we're pursuing that and doing it properly.
A substantial developed markets investment portfolio and business, which is driven around global investing as opposed to in-country investing, and a strong, well-established client reach in all the major pools of capital. You'll see this year, the net flows, which recorded GBP 6.1 billion, which in industry context I think is pretty decent. Those net flows came from different parts of the world than last year. The stars this year were our European and Africa platforms. European, including U.K. U.K. did particularly well. Of course, the African business did very well. We can reach different client bases depending on appetite and provide them with relevant offering.
From an outlook point of view, we think the long-term growth fundamentals of the asset management business are a great deal better than the current narrative, simply because of the volume growth in the market and the need for investment return. Of course, there are some headwinds and challenges in a maturing industry, which we need to manage. Our business has positive momentum. I can still report, and I can report as I've done many years in the past, that we have a very motivated and stable staff complement, well supported by a strong and established culture, which can carry us through tough times. Concluding with strategic priorities, I've specifically mentioned priorities in the context of the articulation of the broad long-term priorities at the pre-result update. I remind you of those. Our long-term priorities are to concentrate our efforts on our existing offering.
No change, no M&A, none of those things. Deepen and strengthen investment and client capabilities for the long term. That's what we do as a business every day. Scale our offering through our global distribution model. Very, very simple. We've got an offering, we've got GBP 111 billion, we can run significantly more of our platforms, we will ensure that our offerings are client relevant and therefore can grow over time with our clients. This business is positioned for growth. In the context of that, what are we focusing on? We're focusing on growing our advisor business. Why advisor business? This is professionally intermediated advisor business through bank, and insurance platforms, as well as in our core regions, independent financial advisors. Because discretionary savings pools are growing, because of the move from DB to DC in the pension game, people have to provide for their own retirement.
Of course, wealth businesses are growing clients of ours. Continue to invest in our investment platform, particularly multi-asset, which is an opportunity for this discretionary savings pool. Of course, China. Asia is really important. In all our lives, we know Asia will dominate. The economic center of gravity is moving by the day to the East. We know the China opportunity. Initially, it's an investment opportunity. Later it is a money raising opportunity. A significant new universe will be coming into the index. It's edging into the indices we are measured against. If China is fully into the emerging market index, it will completely dominate it, and you have to be prepared. We have relevant and good investment product we're building and growing by the day. That is a longer term thing.
Of course, the North America institutional business is the opportunity for the next few years. We've invested significantly in that capacity in terms of reaching that market, we hope that that bears fruit over the next few years. We also know business, and the Investec Group is ready for it, but particularly the asset management business, can avoid or should not embrace the trend towards sustainability. Also, as for investment opportunities, more and more capital wants to be allocated to this huge growth opportunity in the world, transitioning the world to a clean and green economy. Also because our clients require it, because our clients care about their children in the future. That's an important trend we'll talk about. It's not a near-term commercial opportunity, but it's very relevant in our strategic thinking. Finally, we need to achieve a successful demerger and listing of Investec Asset Management.
As Fani said, we're on track to doing that. Noting, again coming back to what Fani presented, everything we do is for the long term and in the interest of our clients. We are not running these businesses for annual earnings or six-monthly earnings. What we've done over the last few months and the last year since we've taken leadership of this group, is to think really long term. We are confident that that will pay off in future. That's really what we're about. Now I'd like to close. Thank you very much for listening to us. As I also get a hand, thank you, Fani. We are here to take questions. Shall we start as usual with Johannesburg, Fani? Is that right? Do you want to say something?
No, let's start with you a bit, yeah.
Okay. Morning, gentlemen.
We've been listening for a long time.
Can you hear us? Yes. Yes.
Yeah.
Richard, good morning. Hi. Are you talking?
We can't see you. Okay, there you are.
I'm here.
I know.
Okay. Well, you're there. You're looking neat. Are there any questions from Johannesburg? It's very quiet here, Fani.
Unbelievable. Ruby is around?
I think everybody's happy. Are the numbers right? I can't see him in the audience.
Okay, Rich, I think let's pivot to London. We will give you another chance.
Okay.
Any questions from the floor here in London? Hendrik, what did we do? No questions.
All right. If we can Well, Fani, I don't think I want to ask you a question. Stephen, you mustn't ask questions. I'm going to ask you a question. Oh, no.
No. Ian.
This is our founder, Ian Kantor. He is not allowed to ask questions.
He's not allowed to ask questions.
You can go for it, Ian. Go for it, Ian. Use the mic, please.
Sorry.
The talk was good on sustainability. What does that mean to me in practice? It means that, firstly, you must get your organization-
Give him the mic, Ian.
Firstly, the organization as a whole should take notice of what society expects. That means the way we engage, the way we live, the way we operate as a business, the way we measure ourselves. Hopefully you'll see over the next few years in both businesses, much improved disclosure and reporting to our stakeholders. That's not the only thing. There are opportunities because if you know the commission, that amongst others I served on and was led by Paul Polman, identified a $12 trillion new economy. That's the size of China. The transition towards sustainability. We in the Investec Asset Management business in particular, the bank has already been involved in clean energy for years. In the Investec Asset Management business, we are starting to launch specific investment offerings to people who want to participate in that growth opportunity.
In fact, we launched two very specific funds earlier this year. I think that is an opportunity. I was very clear to say this is not only because you can raise a few more dollars to manage. This is because your communities expect, there's an inherent liability if you don't think very deeply on these issues. That means engaging with not only our clients, but also the companies we invest in a proper way and understanding what they do and fulfilling our stewardship role. Similarly, as a lender, we have to think about these issues. This is a big story. It's not an earnings driver for the next year. Is that right, Fani?
Yeah, absolutely. Any further questions? I took the mic away from Ian.
Thank you.
Thanks, Ian. Well, I think let's go back to Johannesburg.
Yeah
In case there is a question from there. Any question from Johannesburg, Rich?
Let's see now. Anyone brave enough?
Still none. Okay.
Yeah. We have someone.
Oh, there is. Okay. Almost wrapped it up.
Hold on one second, Fani.
Hopefully.
Good morning. Morning, guys. Thanks for the presentation. It's Bankole Ubogu from Bank of America Merrill Lynch. Just two questions from me. If we look at the performance of your investment income that was down, call it 50%, were there any specific counters there that we should look out for? That's the first. The second question would be, if you're looking to potentially reduce your investment portfolio over the next three years, are there going to be any potentials for accelerated write-offs, kind of before you get that off your book, so reduce your size to a more sustainable level? Thank you.
Okay. Let me start with the second question. We have been very clear that we will reduce the portfolio in a responsible manner. We are in the business of creating value and not destroying value. That's why we've given ourselves about three years or so to reshape that particular portfolio. We have identified a number of specific areas where we need to take action and work is on the go there. We are not going to try to exit stupidly. Exits are also dependent on markets. In the current environment and market, it'll be very difficult to accelerate exits. We are exiting for value, not the other one. The first question, which is, were there specific write-offs? Of course, in a portfolio you will have both gains and losses. In particular, in an equity portfolio, there is a level of volatility.
One of the reasons we have decided to pivot slightly away from proprietary investment is that over the life of our investing in this area, we've done very well. There are times when you get significant realizations, and there are times when you can get some knocks. That volatility we do not like as a principle. Second, we want to invest behind our clients so that we can support our clients as they grow. Thirdly, we want to be granular as opposed to taking big strategic positions. Yes, there were certain specific write-offs as there were realizations. I think you talked initially about a realization in IEP, which was particularly significant. Yes, there has been some specific ones. That is the nature of a portfolio of that nature.
Any further questions? I think we're all good here, Fani.
Thanks, Rich. Any last question from London before we close? Okay, thank you. I think what I'd like to do is just say a few words to, thanks in particular, Jane, who's run Click & Invest and build a platform over the last few years, a platform that works. As I said, the market position for Click, the opportunity rather, is not where we had hoped it would be. We have a number of our colleagues who have been very good and loyal to Investec, and we've had to take a tough decision. Jane and the team have been absolutely professional, and we would like to recognize you. As we go through this process, we obviously will treat our partners and colleagues with dignity and fairness, and we will go through that process carefully. Thank you, Jane.
Generally to the people of Investec, it's been tough the last 12 months or so. There's been the de-merger that we are in the process of executing. Thank you for concentrating on our clients over this period. It would be very easy for us to look internally, concentrate on our own issues, and neglect our clients. Thank you for being long-term in your view. Thank you for caring as you do for our clients. These results I'm very proud of, and I'm sure Hendrik is very proud of, given how tough the environment has been. Going forward, we obviously have to continue to do what we have done, look after our clients, care for each other, care for our societies and environment, and produce returns in the long term for our shareholders. Thank you so much for the work that you have done.
Hendrik, do you want to say anything?
Fani, I just want to go to the final point. I think it is important that you take note of the fact that we have now shaped two independent businesses ready for long-term growth and value creation. We've done that in a period while we kept our eye on the ball. When next we stand here, we'll probably have different presentations. You will be the owners of two businesses which are more simple, highly focused, and ready to grow. Thank you very much for your support.