Good morning, everyone. It's always a pleasure, Nishlan and I, to represent our people in presenting another wonderful set of results. I'm pleased that we can report very strong financial results against the backdrop macroeconomically and from a market perspective that has been particularly challenging. We are reporting that we have adjusted earnings per share going up 25% to GBP 0.689. Dividends up 24% to GBP 0.31, in rands, Rudy wanted to know this rand number earlier today, up 38% to ZAR 7.01. Rudy, I hope you're happy with that. In this period, we returned circa GBP 780 million to shareholders through dividends, share repurchases... Oh, sorry. Nishlan tells me that my slide is not... Can you see the slide?
Now we can.
Thank you. Sorry. I started going because I've got my own presentation on my, on my iPad. Apologies for that. In this period, as I say... Oh my goodness me. The slide is different on this one. Let's just make sure that we've got this right. Okay. I have to look on the left, Nishlan. That's what I have to do. Apologies. Let me start. As I said, adjusted earnings per share up 25% to GBP 0.689. Dividends up 24% to GBP 0.31, and in rands, up 38% to ZAR 7.01. In this period, we returned GBP 780 million. I think it's just about over ZAR 18 billion to our shareholders through a combination of dividends, the share repurchase that we announced.
We have purchased ZAR 5.5 billion to date, and a distribution of 15% of Ninety One. I'd like to take just a step back and go back to March 2020. As you see on our graphs, that is the reference period. At that time, we de-merged Ninety One from Investec, and we've navigated over the three years a particularly difficult environment, a once-in-a-hundred-year global pandemic. There's an ongoing war that is occasioned by the invasion of Ukraine by Russia. We've had resurging inflation, consequently, we've had very high rates of interest across the world. In fact, at the moment, we are concerned about a small banks crisis in the U.S. market, and latterly, of course, we're worried about the debt ceiling.
That's the backdrop that we have had to navigate over the last 3 years or so. The performance of the business, in my view, has been phenomenal. As the graph shows, we have increased our adjusted earnings per share over that period by a whopping 82%. It really has been pleasing to be part of the story over this period. We also have refined our purpose over the last 3 years and really committed ourselves to this idea of creating enduring worth. That's for our clients, that's for our colleagues inside of the business, and that is for the society in which we live. Obviously, we want to make sure that we do well by the environment as well. As you can imagine, this is a results presentation, so you're going to have lots of numbers.
Before we go into the numbers themselves, and Nishlan will do most of the analysis, I would like you to keep some fundamentals in your mind before we go through into the numbers. The first fundamental is that over the last three, four years, we have had a discipline to allocate capital appropriately and also to manage risk appropriately as well. Discipline in capital allocation and in risk. That has led to the second point I would like you to keep in mind, and that is that our firm is very focused on very deep client franchises in specialist banking and wealth management and in two anchor geographies. We have a culture that is deeply entrenched, and it is driven by impassioned people who are entrepreneurial.
That is what the focus has led to, a clear strategic path for us going forward, guided by the need to allocate capital appropriately. Thirdly, we are committed to generating returns above our cost of capital. That was the mantra in February 2019. As we do so, we can reinvest in the business for growth in the long term, we can support our colleagues, we can support our clients, and importantly, we can pay the distributions that we have been able to pay to reward our capital providers. Please keep those in mind.
I will repeat myself, so that as we go through the presentation, we anchor on these: discipline in capital allocation and risk management, a sharp focus on building deep client franchises, specialist banking, wealth, north-south, and impassioned people who are entrepreneurial in the way we look at it, Focus deeply to generate returns that allow us to reinvest in the business and to distribute, dividends to our shareholders. As we go through, please just keep those in mind. I'm gonna go to the second slide. Tell me that, this is the right slide. I'll keep looking back to make sure we're on the same slide.
As we look at the left side of that slide, I'm not going to go back to the focus that we have strategically in terms of our business and the clients that we have, you see a growth in loan books in each geography that is quite pleasing given the backdrop. You also see a growth in deposits in each geography. This is really important because what you have seen within the U.S. market, particularly given the regional small banks crisis, a crisis around deposits that has been obviously occasioned by interest rate risk mismanagement, but it manifests in a flight of deposits. We are particularly pleased to see that in each geography we have seen a growth in deposits. In our wealth businesses, we have seen a significant level of net inflow in a tough market.
If you look at the results of a number of wealth managers, a number of asset managers, you will see that flow has been particularly difficult. Our overall funds under management are down, that is not surprising because the relevant indices that we measure ourselves against would have come down as a consequence of the markets. Here's the key takeaway I want you to just consider. The diversity of our business by virtue of geography, by virtue of business line, and by virtue of the intensity, capital intensity of our revenues gives us the ability to navigate different environments over time. Of course, it does help that we have very clearly chosen, carefully chosen client bases that are very resilient.
It really is an important point to understand this idea of a diversity of earnings, a diversity of geographies, a diversity of business lines, a capital light, capital heavy, and we also have capital light revenues within the banks as well. If we go to the middle section of that slide and we talk about capital management, I would like to point out that despite having addressed the excess capital in the SA Bank, as I said, we have executed R 5.5 billion of the R 7 billion program. Our CET1 ratio remains at a pleasing, if not elevated, 14.7%. Obviously, we have completed our migration to AIRB and that has helped, but we continue to look at optimizing our capital.
The board has revised capital ratios in terms of South Africa's CET1 11.5%-12.5% on an Advanced basis. In the U.K., we also have seen an increase in capital to 12%. Our target there, CET1 target, is to be in excess of 10%, and we have started the process of looking to migrate to Advanced. That work is underway, and obviously we will benefit from the fact that we've undertaken the same work here in South Africa.
On the right-hand side of the slide, I would just like to point out that as we look for growth over the next number of years, we are particularly excited that we have announced a combination of our UK wealth and investment business with Rathbones to form the largest DFM business, wealth business in the UK with GBP 100 billion of assets under management. GBP 100 billion. Just think about it, because I'm sitting in Johannesburg. Multiply that by 24. ZAR 2.4 trillion of funds under management.
That scale gives us the belief that we will be able to invest much more substantially in growth, in terms of the capabilities that we offer our clients, the client proposition, that we can make available to our clients, investment in technology, but also importantly, we will be a home for talent because there will be so much more we can do for our people. Over the last three years or so, we've talked about a strategy to bring the best of Investec in every client interaction across bank and wealth.
In constructing the combination transaction with Rathbones, we have made sure that we can continue to service our wealth clients in a manner that is as good as we have at the moment, and that in fact, they can access the wealth clients the best of banking from Investec. We have undertaken, we have concluded some MOUs to make sure that across the two businesses in a strategic alliance, we can continue to offer banking services and wealth services. We are particularly excited about that. Lastly, on that slide, as I said earlier on, we have an ROE now that has improved to within the target range. Again, why is that important? It allows us to reinvest in the business. It allows us to support our different stakeholders.
It allows us to be ambitious about the business and about the future. It increases our ability to be relevant in the markets that we play in. On this slide, I'm going to just touch on two of the ratios because Nishlan will go into a lot more. Pleased to see the cost-to-income ratio drop from 63.3% to 59.6%, supported by revenue growth of 14.6%. This is against an increase in costs of 9.5% in an environment that is difficult, and Nishlan will unpack that for us. Over the last three, four years or so, cost discipline has been a focus of our business.
While in this one year, costs have grown by 9.5%, you look at our costs over the last four years or so, you will see that we have entrenched a culture of cost discipline and efficiency as we move forward. The next item that I would like just to touch briefly is the credit loss ratio. We are in a difficult environment economically. Growth rates are low. You have high interest rates. In, in some cases, there is a fear that some economies could go into a recession. In South Africa, we have load shedding.
Our own goals that we score, there has been a concern around whether we've exposed ourselves to sanctions from the US and maybe even from Europe, given some of the unsavory alliances we have been exhibiting towards Russia at the moment. It's a tough macro environment, and there is pressure on our clients. It is pleasing, in that background, to see that our credit loss ratio is at 23 basis points against a through the cycle target of 25-35. We are creeping in there. You will expect it in this environment that we're in. Nishlan will talk about how we look at it going forward and how we've dealt with our models that drive some of our provisioning.
I don't want to steal his thunder. It is always interesting to look at the business through a geographic lens. What you see is a business in both geographies that has impressive scale. Look at those loan books. About GBP 15 billion each. How interesting is that? A little more in the U.K., that is impressive. In fact, each would have grown in the period that we are reporting it. Look at the deposit bases. As I said, we have very strong deposit franchises in each area. About GBP 20 billion each. Interesting, isn't it? I'm just rounding them up or down just to try and make a point. As you look at FUM, obviously our business in the U.K. is about twice the size of our business in South Africa in pound terms.
As I said, in the UK, we are now delivering, in the combination with Rathbones, the leading DFM player in that market. As I indicated, while we're at flows, which is fantastic, our total funds under management are down because of the markets. If you look at the credit loss ratio, obviously quite minimal in South Africa, and Nishlan will go into that. In the UK market, again, while there has been an increase, we are still within the through the cycle range. Look at the ROE of our business. South Africa, 14.8%, but obviously the benefits of our capital management activities will come through in 2024 and beyond. You will see, I hope, a significant improvement in that ROE in South Africa.
In the UK, we measure generally in that market on ROTE. The average ROTE of the banking industry in the UK is 12%. As you can see, we printed in terms of ROTE for the UK business, 14.5%. My eyesight is not as good as it used to be, Rich. Particularly pleasing to see the scale. I know a few years ago, people were worried about our business in the UK. You can see the growth that we are seeing in that business in terms of its profitability. You can see the scale of it. As you can see on this picture, adjusted operating profit in South Africa is about GBP 441 million. In the UK business, that's about GBP 400 million.
We've made significant progress in continuing to build our business in the UK. The last slide that I will go into before Nishlan digs deep into the numbers is a slide on sustainability. As I said, our purpose is to create enduring worth, that we look at the business through the lens of all our stakeholders. Obviously committed to making sure that we can reward our shareholders, but also quite insistent that we have to deliver to our clients through a set of colleagues that are well looked after, empowered, and are entrepreneurial. We want to do so in the context of making sure that we leave a net positive impact on society and on the environment. Over this period, we have made substantial progress across all areas of sustainability.
We have robust standard reporting inside of both our businesses, and we are ranked quite favorably by Sustainalytics, by MSCI, and by S&P. We have signed up to the Net-Zero Banking Alliance, and we have done some work that we reported on in Scope 3. We were the first bank to do so in South Africa, and then we're quite leading across the world. We took the risk to say, "This is what we understand. This is the work we're doing, and we will put it out there." This year we will improve on that work that we have done. We had a March 2022 TCFD report which was published, and you can look at that. This year we will go a little further in this area.
While progress has been very pleasing and quite substantial, this area is challenging. We have a lot more work to do as we go forward. We are excited about the opportunity to live out our purpose and create enduring worth. I'm gonna ask Nishlan to now unpack the numbers in greater detail. Hopefully, I've given you a high-level view of how we look at the business. Nish?
Thanks, Fani. I'm not sure if this is on. We are now. Good morning to you, everyone, it's always a privilege to stand up here and present the deep dive to you. I think just unpacking a bit of the background and some of the data in terms of the context that Fani has spoken about. I think if you look at this reporting period, we saw a weak economic environment in both South Africa and the UK, albeit that it was an environment recovering from obviously the negative COVID cycle that we had over 2020 and 2021. The issue I think that we are all looking at is, in the immediate term, is that the economic environment continues to be weak.
In South Africa, constraints, such as load shedding, has seen, for example, the outlook deteriorate just from December to March from around about a 1% calendar GDP growth to around about a 0.2% GDP growth for the next calendar year. I think that's the context that we're in. Similarly, from a U.K. perspective, I think, you know, we have seen weakness in the economy, albeit that there have been signs of also improvements as you've seen the world becoming more engaged and, you know, some of the constraints that existed from a global perspective starting to relieve. I think if any of you have been on a plane or any of you have been into the city of London, you'll see a lot of people around.
Compared to the COVID environment that we've had in the past, there's definitely a re-engagement of the engines around the world. That, to some extent, is cushioning the difficulties that we face, which is with high inflation and persistent inflation, we are seeing the need for interest rates to continue to remain high, you know, as we look forward. From a financial market perspective, I think to some extent markets have improved, but there's been a lot of volatility in markets, and its certain reporting dates have been weak. I think if we look across both the JSE and the FTSE, you know, it's easy to pull out the stats at the end of March, but the level of volatility that has existed over the period should be noted.
From an exchange rate perspective, I think South Africa continues to, you know, be burdened by factors, whether that is how we position ourselves as a country, whether it is some of the constraints that apply from a global supply of money, and how we partake in that environment. Right now, we sit with a significantly weak currency, but again, there are underpins that support our, you know. Overall, if you look through time. I think from an interest rate differential perspective, with interest rates having increased and we've continued to see some of that pressure, as global inflation rates start to ease, we should see this picture change as we head into the 2024 financial year.
Our expectation is for interest rates to probably increase to some extent over the period. Thanks, Rich. It's for interest rates to continue to increase in the shorter term, but to moderate as we look forward. To some extent, that might be stubborn through to the 2023 year, with moderation coming in the 2024 year. The one thing I'd like to call out is if you look at the long drawn-out period of low interest rates, right from the global financial crisis date in March 2010 right through to March 2022 of low interest rates. As we see the profitability of the banking business in the UK improve, just note that context of low interest rates.
Whilst we expect rates to reduce, we don't necessarily expect those rates to reduce to the levels that existed over the last decade or so. I think the other point to call out is that the average interest rates, given the sharpness of the curves, to some extent we've absorbed a much lower average increase in interest rates, and that momentum will continue into the new financial year. From an earnings perspective, I think, you know, over the period there has been still strategic execution. We distributed 15% of Ninety One back in May, and that results in a reduction in associated income. To an extent, we continue to have a 10% holding, so we do have some dividend flows.
We effectively switched IEP, which is a ZAR 5.5 billion investment on our balance sheet, to a position in which we seek to realize the assets over time. We have realized one of or a couple of the assets in this period, reducing the net investment from about ZAR 5.5 billion to ZAR 4.7 billion at the end of March. At the end of April to around about ZAR 4.4 billion. That will continue over time, subject to obviously the environment out there because we continue to seek to realize assets on a basis of value. Yesterday, IPF announced to the market that the shareholders have approved the internalization of the management company, and we think that that really positions IPF well for the period going forward.
We continue to hold a 24% interest in IPF. For those of you that analyze the data, you'll see that it has created some noise on our revenue lines, just given the fact that we consolidate 100% of the platform, but at the end of the day, have only 24% of the economic rights to the platform itself. In that environment and in that context, you know, adjusted operating profit increasing to GBP 68.9, which is a 25% growth. If we start unpacking our divisions, just some highlights on each of them. I think if we look at the wealth investment in the UK, operating profit increased by 1.3% to just under GBP 92 million in the period.
We experienced net inflows of about GBP 608 million in the current period. Some of those flows have come through from our banking business and our high net worth client base that we continue to build in the U.K., and I think those flows were about GBP 370 odd million in this period. FUM obviously decreasing based on markets, and we had a small acquisition in the period that accounted for some increase in the underlying FUM. The South African business, I think, continues to expand its global investment offering, and I think is well-positioned in South Africa for the current market and for the future. Discretionary and annuity funds, we had inflows of about ZAR 5.9 billion in the period.
We did have some outflows from our non-discretionary portfolio, but that was clients managing their positions. Operating profit increased by 1.8% in the period to ZAR 672 million. You'll see from our disclosure, we have now incorporated the Switzerland wealth platform into our reporting platform for the South African business because that forms part of the South African international strategy. If we turn to the specialist banking businesses, in the U.K., adjusted operating profit increased by 56.7% to GBP 303 million.
That was really underpinned by growth in our client base, underpinned by growth in our loan book in the prior year and the current period, experienced growth of about 7.9%, increased levels of activity from our clients, particularly in some of the products that we offer in our trading platforms. From a South African perspective, adjusted operating profit increased by 22% in the current period to just under ZAR 8.7 billion. We did see strong growth, particularly associated with corporate credit demand.
I think both geographies, you have experienced some levels of higher redemptions from clients as they manage and navigate higher interest rates, but at the same time, you know, fundamentally, seeing a growth in the client base itself. Looking at ROE, I think well represented in the geographies that we operate in. As Fani has indicated, the balancing of the contribution of revenue and profitability from the geographies are now starting to reflect in the group, with South Africa contributing 52% of operating profit, against a backdrop of 43% of operating income, and the UK contributing 48%. From a divisional perspective, our wealth business has contributed 21% to our revenue base and 14% to our operating profit.
You'll continue to see the group investments portfolio starting to have a lower level of contribution as we reduce that portfolio. Just pausing on each of our businesses, the next few slides will just give you a few elements of a snapshot on those businesses. The wealth business in South Africa, I think a thing to call out is that the operating margin for our South African business is around about 31%. As we incorporate the Switzerland wealth platform, that operating margin is reflected at about 27.3%. In the current period, operating income grew by 4.1%.
To, you know, to an extent, there have been negatives from the fact that clients have remained probably in South Africa a lot more cautious, so we haven't necessarily seen the same level of trading flows as we saw in prior periods. Given the fact that there's a high degree of the portfolio also managed on an international basis for the clients, you continue to benefit from those flows. The operating costs increased by 5.3%, and that really does re-reflect continued investment, albeit that it is, you know, below inflation. At the end of the day, continued investment in the platform and to some degree normalization of costs as those have come through. Our U.K. business, operating income grew by 2.8%.
To some extent, the lower fees generated in the period have been masked by higher interest income in the period. All of those positively positioned from what we've seen from a market perspective. Funds under management, as I've indicated, net inflows of GBP 608 million over the period really being offset by market movement. Net organic growth achieved in the period on FUM of around about 1.4%. The operating margin at 25.8% is slightly lower than the prior year, and that's really as costs increased by 3.3% against operating income increasing by 2.8%. The banking business in South Africa, the specialist banking business, obviously has a diversified revenue base. Let's just look at some of the drivers.
Core loans and advances increasing by 7.5%. I think as you look at the detail, the corporate loan book has grown by just over 20 odd percent in the current period, so strong growth in the corporate platform. Our mortgage book, I think, has grown by about 2.6%, or private client lending at about 2.6% over the period. Our deposit base is up by 6.8% to GBP 448 billion. Again, if you look at revenue, yes, net interest is up, and that's on the base of higher book and higher interest rates in the period. We've also seen good momentum in fee generation in the period as client transactional activity in our private banking business has significantly picked up year-on-year.
We also saw an increase in trading flows from client activity, utilizing our skills and ability within the trading platforms as well. Cost-to-income ratio improving from 51.1% to 48.2%. The banking business in the UK, core loans and advances grew by 7.9% in the period. High net worth mortgage lending was up around about 12.7% during this period. In fact, at the end of, I think, January, that was running at about 14 odd %. To some extent, there is some pressure as we look forward, but we continue to acquire clients, and we continue to drive penetration in that market, which will, you know, really create an underpin. If we look at operating profit, here we've seen a marked improvement in cost to...
the cost-to-income ratio from 69.6% to 60.4% off the back of strong growth in revenue. The strong growth in revenue driven by net interest income growing by about 47% in the period, as well as flows from trading activities that clients undertake growing by about 45% over this period. Costs, as we saw in the South African bank as well, costs have grown above inflation and growing at about 12.4%. Again, if you look at our cost base, given some of the strategic actions taken back in 2020, it's actually slightly below the levels that we had, you know, really departed from back in 2020. Our group investments portfolio, Ninety One, we continue to hold 10% on our U.K. balance sheet.
Investec Property Fund, 24.3%, and our investment in IEP, as I quoted, at about ZAR 4.4 billion to date. We hold around about a 47% interest in the overall vehicle. The average required capital for the vehicle is at about GBP 432 million pounds. That has decreased from, you know, around about GBP 500 million to a closing average required capital of about GBP 300 million, given the reduction in the portfolio itself. This portfolio returned an ROE of 3.9% this year, and that's really a consequence of strategic actions and distributions that have taken place. Bringing the picture together, the South African business, including group costs, operating profit grew by 15% and our UK business by 30%.
Strong growth in our banking businesses. Our wealth businesses holding up strongly in the market that we face. Group investments, really strategic execution coming through over the period and the consolidation of the investment of IPF. I think focusing on the fact that all of both geographies have generated strong growth in return on equity. In South Africa, we have also instituted some capital management, so the buyback has come through, but a fair amount of that buyback took place over the last quarter of this financial year. You will continue to see a positive impact on ROE as we look forward in time. Overall, adjusted operating profit increasing by 28% to GBP 917 million.
If we look at a consolidated picture in terms of revenue, strong growth in net interest income, net fees really impacted by current markets, but underpinned by client growth, and investment in associate income really driven by distributions that have taken place over the period. To some extent, these revenue lines are influenced by consolidation. Our net non-interest revenue has grown strongly in our underlying businesses overall. The operating income increasing by 14.6% to GBP 2.28 billion. To some extent, if we hadn't consolidated and treated IPF as a single line, that operating income has actually grown by 16.4% in the period.
Looking at operating costs, I think obviously with operating costs increasing by 9.5%, we will all want to see that normalize as we look forward in time. In this period, a fair amount driven by personnel costs, and that's really driven by inflationary pressures as well as increased investment in people, and more broadly speaking, increased costs. You know, just to give you an example, in South Africa, we've seen an increase in our costs associated with running backup systems from about ZAR 3 million to about ZAR 23 million this year. There are some absorption that is taking place in the cost base itself. I think we've touched on our earnings drivers. I'm not going to over-labor the point.
I think looking at our core loans across the geographies in South Africa, our mortgage book grew by about 6% in the period, with other high net worth lending growing by 3%. You're seeing strong growth in our corporate and acquisition finance books as well as our fund finance books in this period. We are quite happy with the asset quality and the spread and the diversity of the book itself. Looking at the UK book, again, underpinned by client acquisition, we've seen our mortgage book grow by 13% in the period. High net worth lending reducing by 7% in the period as clients become more defensive, and we've seen a higher degree of redemptions in the period.
Again, through the corporate base, experiencing growth on a diversified basis across our book. I think the important thing with the lending books is if you look at the credit loss ratio, it's these credit loss ratios are underpinned by a highly collateralized book. That's why our expected credit loss ratios through the cycle is about 30 to 40 basis points. Obviously, you know, as we move through time, it's not a perfect science to predict that number, but that's where we expect to operate as a group. Overall, the credit loss ratio at 23 basis points. I think we, you know, looking at the environment in front of us, we do expect ourselves to be in the 25 to 35 basis points levels as we look forward into the next financial year.
Over this period, our impairments rates in the model context has increased as our forward-looking macroeconomic scenarios are a bit weaker than what our outlook was 6 months or 12 months ago. We have released some of our overlays, that's on the basis that those overlays have now been absorbed into the models, therefore, the need for an external layer of overlays no longer exists. Whilst we've seen an increase in some specific impairments, we continue to see higher recoveries for previously impaired assets. Just looking at the geographies, in South Africa, the credit loss ratio remains low at about 8 basis points. Now, there are recoveries in that number that is at elevated levels. Adjusting for that, it's probably closer to 20 basis points.
We expect that to continue to run on that basis. From a UK perspective, our credit loss ratio increased from 17 to 37 basis points. Again, from this perspective, we've seen some increase in specific impairments, but really associated with a handful of exposures. We've increased our modeled impairment requirements and off the backroom have released some of our overlays that we've held. We do anticipate, we guide to the market that our credit loss ratio in the UK is expected to operate at 30-40 basis points towards the higher end of that particular level, given the nature of the book and the mix that we have. Our balance sheet provisions remain robust and our overall coverage ratios remain robust.
There have been some movement between the stages, but nothing really to call out. I think if we look at, you know, the return on equity and the return on tangible equity, a really positive story. You see that capital is almost equally split between the two geographies. To some extent, the South African capital will continue to reduce as we have implemented capital action. Next year, that capital level is expected to be at around about ZAR 1.9 billion, whereas the UK will continue to grow as we position ourselves for growth. From a capital and liquidity perspective, I think we've held around about GBP 16.4 billion of cash and near cash. Our balance sheet remains defensive in a period like this. I think some of the risks that we saw in the UK, which...
I mean, in the US, particularly around interest rate risk, management in the banking book, we have been very conscious and we, you know, whilst we hold positions, we ensure that we effectively, close out interest rate risk, particularly interest rate risk that is more than a year is fully hedged in the group. From a leverage ratio perspective, at 9.4% in the PLC, supporting a capital level of 12% that is measured on a standardized basis. From a South African perspective, we ditch, we did move one of our final portfolios, which resulted in a 242 basis point increase in our CET1 ratio, and the buybacks has reduced the CET1 ratio by about 200 basis points.
Both South Africa and the UK have also absorbed the distribution of Ninety One in these capital ratios. Capital ratios remaining quite strong over the period. I think just to contextualize, we had to look at this number a few times because we thought it was a fudged outcome, but net asset value remained at GBP 5.10 from the opening balance to the closing balance. Really what that represents is GBP 0.69 of growth in, as a result of profitability, holistically offset by the levels of distributions that took place in the period, which is the buybacks, and the distribution of Ninety One and coupled with dividends that we've had.
The South African contribution to net asset value in this period, a little bit weaker because of the weakening of the ZAR by about 14% over the period. That really leaves us with the net asset value at a strong level of GBP 5.10. Now, from an outlook perspective, I think we can't overemphasize the macroeconomic backdrop. We can't overemphasize the impact of load shedding. We can't overemphasize the difficulties that we face in the South African market. I think from a UK market perspective, the high inflation cost of living impact, which we are living through right now, will continue to play out, and some risk to economic recovery. I think in both geographies, there's still an underpin as the economies continue to drive forward out of the pandemic cycles itself.
In that backdrop, we expect revenue to be growth to be underpinned by moderate book growth, continued elevated interest rates, which is net positive from a revenue perspective, and we'll continue to seek to grow our business and our client bases. Overall costs, we expect our cost-to-income ratio to remain in the region of 60%. We also expect our expected credit loss ratios to be in the 25-35 basis points guidance. I think from a capital optimization perspective, we have executed a fair amount, but there's an element that is left, and we'll continue to realize IEP. With regard to a one-year outlook, we expect our return on equity to be in the mid-range of 12%-16%. Fani, I can see you're ready to rock and roll, so I think it's up to you to take us home.
Thank you, Nish. I gave you the more laborious part to do, and thank you for delivering it with that clarity that you have delivered it. Where are we? I'm gonna try just take it home because Nish gave you a sense of how we look at the next year, a difficult environment, and yet a positioning from a market perspective that is competitive, strong capital and liquidity, and the people in a culture that allows us to navigate an environment. That's why we would hope to see an improvement in ROE, as we said, from the 13.7 to circle the midpoint of the 12%-16% range. That's the attitude that we take.
Richard often says that, while the South African environment is tough, we have to continue to have a mindset of progress and growth as we support our clients. Taking it home on this slide, I'm gonna focus just on the grow part of it. I want to pick out four specific things I want you to take away with you as we go home. The first is obviously that we are extremely excited about the Rathbones combination. For the scale it produces, the underpin to growth that I talked about a little earlier, and the fact that we can continue to service in the UK our clients from a banking and a wealth perspective. It really is important to understand that that transaction gives us greater relevance within that particular market.
The second point I want you to take away is that we will continue within the U.K. context to increase the scale of that business. You saw the income participation versus the profit per conversion. As we increase scale, we will do well there. My confidence in that business is driven probably by 3 simple ideas. The first is that we have a very clear strategic positioning. We have client segments that we have chosen where we can be competitive. The second is that over the last 3, 4 years or so, we have showed that we can deliver profitable growth. You have seen a growth of 30% in our profits there to just under GBP 400 million sterling operating profit.
You also have seen that our banking business has increased its profitability by about 57%. The last area of competitiveness is that we remain entrepreneurial, we are nimble, we are close to our clients, and we can work with them through the difficult times. Continuing to increase scale and relevance in that business. The third thing I want you to take away is that we have an opportunity in both geographies to deepen our penetration in the corporate mid-market. In South Africa, you will know about IFB. You will know about our business banking proposition, so on and so forth. In the UK, this is the space that we have really occupied in a competitive manner in that we have become a full-service player against specialists.
You saw Numis was taken out, a Peel Hunt who will compete with us in the investment banking space, particularly advisory. You will have the likes of Shawbrook and others competing with us in certain aspects of lending. We have an asset finance book, so on and so forth. For that mid-market in the U.K., we have a special position, and that position has been translated into the numbers that you see. The mid-market opportunity in both geographies is something that we will pursue with vigor, focus, and discipline in terms of execution. The fourth point is that we will pursue further growth at the high net income segment of our private clients business, both private banking and wealth, with collaboration between bank and wealth within the South African environment.
We will pursue greater penetration in the high net worth end of our market, both in South Africa and the UK, both across bank and wealth. At that high net worth end, we will also pursue private lending opportunities in between the geographies. Those are the four very distinct growth elements that I would like you to keep in mind as we move over into the next two, three, four years or so. In closing, I just want to reiterate our strong position strategically, capital and liquidity, as I said, and the scale and relevance in the markets that we have chosen.
As indicated in the previous slide, we think we have executable growth initiatives, and we will continue, despite the environment, to be led by entrepreneurially minded people that are very client-centric, and we will stay close to our clients in an environment that is tough. The word I leave you with is the ability to navigate complexity and difficulty in the kind of markets that we are in. Thank you for attending and for listening. We're happy to take questions. Where do we start with respect to questions? The U.K. Sorry, the presentation has been a bit long, Nishlan. Was it me or was it you? I'm not sure. The presentation has been long, Nishlan. Was it me or was it you? Maybe both of us. I'm not sure. Maybe both of us.
Any questions?
Nish, you're probably going to have to come through here so that we can... Hey, Ruth. Yes.
Hi, Fani. We have a question coming through now.
Morning, everyone. Alex Bowers from Berenberg. I just have three questions from me. number one, looking forward, can you talk a bit about your expectations for the economic environment in both the UK and South Africa, and what sort of underlying assumptions or base case you have used for your forward guidance? That was the 1st one. 2nd one, on cost and investment, what areas of the business are you looking to focus your investment and where are you looking at potentially control or cut back spending? Lastly, on Rathbones, how significant is the opportunity for client referrals between the two businesses? Sort of 2ndly, how will you look to manage integration risk? Thanks.
Okay, let me take the last question, and I'll leave the first two to Nishlan. We think the opportunity in Rathbones is pretty significant. You will know that over the last 18 months or so, from my existing activities within Investec, we have referred about GBP 750 million of funds under management from the bank into wealth. With the enlarged Rathbones, we obviously will be able to ramp up the work that we're doing. Ruth has been in touch already with Paul Stockton, and they've been working on ways to really ramp up our ability to do both. You will know that from their side, they've had Saunderson House, which focuses at the high net worth end of the market.
Between those units and the bank, we have our teams working to make sure that we can realize that opportunity. Very excited about it. At the high net worth end, obviously the bank will be able to service an enlarged client base, and we're quite confident that given our flexibility, given our entrepreneurial flair, given our closeness to clients, we will be able to offer banking services to the existing high net worth Rathbones clients. We're quite excited about the revenue opportunity. As we indicated at the time of the announcement, there will be other opportunities on the revenue side.
On the cost and integration side, we did a lot of work before we came to agreement with Rathbones on the combination. We have indicated to you that we think there is GBP 60 million of identifiable synergy benefits. We will be pursuing these identified benefits over the next little while. Our degree of confidence in delivery of these benefits is particularly high. As you know, on the technology side, we were on our side going down the route of re-platforming of Objectway, and they have already gone down significantly on that path. That is an area where you not only decrease risk and contain it, but you increase speed of execution as you take clients onto that particular platform.
Regulation is a big issue within the financial services sector, in particular, the wealth sector. Having this scale allows us to handle those issues with much more capability. I talked about many other benefits. I can refer you back to where we were. We see significant opportunity in the combination. Nish?
Yeah. I think on the economics, there's actually a slide that gives you the forward look, Alex. I'll refer you back to that slide. Broadly speaking, for the 2023 calendar year, we're expect very subdued economic growth in South Africa. I think that's 0.2%. From a UK perspective, around about 0.1%-0.4%. I think in both geographies, we expect the GDP to improve as we look forward into 2024 and beyond. That is, in a South African context, some of the constraints that we're quite deeply in right now should start relieving as we get into the 2024 financial year.
Similarly, I think we have a projection of about 0.9% for economic growth in the UK for the 2024 financial year. With regard to costs, I think I've guided to, you know, to the fact that we expect to remain at or around a cost-to-income ratio of 60%. We definitely expect some moderation to come through in costs as the inflation elements that have been absorbed. You know, there's still elements that we've got to absorb, but that should start relieving itself. We'll continue to positively invest across our platforms because it's not an area that you can let up on. I think as businesses grow, we will continue to grow with those businesses. All of that is in the context of managing the platform to deliver an outcome of a cost-to-income ratio that is well within the 60% level.
Thanks, Nish. Again, as Ciaran Whelan, my colleague, will say, a tough economic environment affects everyone. Our responsibility is to outcompete the others because they face the same headwinds. While the outlook for the economy is tough, we would hope that we can compete as effectively as possible. Alex, you had a go at three questions. Let's get the next one.
Any further questions? It's all from the UK, Fani. Thank you. Thanks, Alex.
Thank you. Alex and Berenberg have been very helpful in helping us to try penetrate both certain aspects of the U.K. market, shareholder market, and Europe. Thank you for your support. Tesh, where else do we go? Here. Oh, we're in the room. Really? I thought you were so happy with the dividend, you were not going to ask a question. Let's go.
Thank you. Thanks, Mr. Titi. The table on page 25 shows that the income yield on the property fund is a dash. In other words, nothing. On page 41, on your last remarks, you mention the internalization of the Investec Property Fund Management company. Now, given the difficulties in the property market, what can you be doing in the future to improve the return on the income yield that currently is not being obtained? What are your plans specifically?
Thank you for the question. The property neighborhood is obviously very difficult, as you know. When you look across a number of these sectors, industrial, commercial, so on and so forth, in particular in South Africa, given the problems around load shedding, costs of Increase quite significantly. Going forward, we will be a shareholder. We won't be owning the management company. That is what the internalization achieves. We will back that management team within IPF as they roll out their strategy and they look. As you know, at the moment, they have exposures in a number of interesting sectors in Europe, particularly in the logistics area. They do a lot of that work here.
We will support as a shareholder, not as people that are responsible for management. We will support their activities. We have a high degree of confidence that they can navigate this current environment as other property companies, property funds, fund companies have had to do. It's been a difficult space. I don't want to steal their thunder. I think they are in this room in the afternoon to answer these questions, but we'll be a supportive shareholder. Your observations are spot on.
Forgive me, Mr. Titi, I still fail to see how your support is going to enhance an income yield.
Yeah. As I said, we are no longer going forward, not responsible for that management. I think it would be inappropriate for me to say what Andrew Wooler should be doing. I can arrange a meeting for him with you, but I can't talk for another listed company given that they are separate. I have to respect those boundaries.
Thank you.
I know I'm sounding defensive. I don't intend to be.
I understand.
I think it's a protocol we have to respect.
Thank you.
Just a quick point is that, we've actually had good dividend yield from the platform.
Are you off, Nish?
Yeah. Thank you.
Can we get Nish back on? Nish?
Are we back on? All right. I think just to note that over time, we have had good dividend yield from the platform and continue to experience good dividend yield in the underlying numbers. The problem with the way we represent it in our accounts is it's consolidated. What you also have is a fair amount of movement in valuations that offsets this flow, and that's particularly elevated in this current period. You know, that's accounting.
Andrew will be happy to take you a bit further into it. Thank you. Any more questions from Johannesburg? You can always count on Rudy for a bouncer, right? Any more questions? Shall we go to the chorus call? I'm sure we'll get a question from Chris Stewart. Is he on the call? No, he's not. Okay.
There are no questions on the conference call at this moment.
No questions. Sounds like you've got off on the, on the easy side, Nishlan.
Cool.
Let me thank you all for your interest in this business and... Oh.
[crosstalk]
Okay. My predecessor, Stephen Koseff, says to me, "Don't invite a question when you get to the end of the presentation. Just close and move on." I'm sure Stephen will laugh that I was just about to close it off. Thank you.
Chris Stewart has got two.
Of course.
Given that policy rates in FY 2024 could easily be 11.5% in SA versus 9.4% in FY 2023 and 4.5% in the UK versus 2.3% in FY 2023, would it be fair to say that the group is likely to experience significant NII run rate tailwinds once again in FY 2024?
Jonas to answer that. We've given a sense of sensitivity around interest rates. Obviously, we've given an outlook of how we see interest rates. For every 25 bps in the UK, there's about GBP 13.7 million or so of interest income. For every 25 bps movement in SA, the equivalent number I think is ZAR 107 million. That we're happy to disclose. We won't guess where those rates will be other than what we have forecast in terms of our economic outlook.
Given the very volatile environment for asset markets, what gives you the confidence to grow fund finance advances by mid-teens in both geographies?
We are specialists in what we do, very close to our clients, we continue to work very closely with our clients. The numbers that you are talking to are obviously historical. They may well be if the level of economic activity continues to constrain a moderation of growth. I think we have indicated that whether you talk about mortgage growth in the UK, that there has been a level of moderation. Despite that moderation, we are comfortable that we could give you the kind of outlook that we have given because we are well-positioned in fund finance in the UK and here. In fact, while I was sitting here, listening to Nish, Rich was whispering in my ear that we should be able to do more in this space.
Okay. Stefan Potgieter from UBS. Having largely executed the announced buyback and the CET1 ratio in SA is still high at 14.7%, are you considering an extension of the buyback?
Look, we have very difficult market environments. We have been very decisive in dealing with the current buyback program of ZAR 7 billion. We still have some way to go. We don't want to rush the goalie. Both with respect to buybacks and performance targets, we want to give ourselves time to see how this volatile environment settles. At the right time, we'll talk to the market again. We're very comfortable with where we are and pleased actually that having spent ZAR 5.5 billion on buybacks, we still have that elevated level of CET1 ratio. In these times, liquidity, capital, and a people that can navigate an environment and a proximity to clients, really important.
Final question, Fani.
Nishlan , you have to work. Nishlan 's sitting there and is letting me beg through. Final question, yeah.
Final question from Risk Insights. It's great to see an increased level of commitments made on the sustainability side. Currently, your Scope 3 emissions for 2022 are around 15% of total emissions. Is there a plan to competitively position Investec by measuring Scope 3 more effectively?
As I said in the presentation, we took a leap of faith because we believe in this issue of sustainability and climate change. We went out with a baseline. We are learning a lot more and doing a lot more across the organization. When we report at the end of the year, you will see what progress we have made. We are quite committed to this space. As we said in the presentation, there's a lot more to do in this space. There are significant opportunities, but there are risk as well, because we don't ever want to be accused as either greenwashing or not being accurate in the measurements that we put out. Lots more work in this space. Pleased with progress, but definitely understanding that there's lots more work. You said that was the last question, right?
Yes.
Okay. Let's go back to the script then. Let me thank you again for your interest in the business and for your participation in this year-end results presentation. We are in tough markets, but we love the position that we have. Our people are excited about the opportunity to compete in the market, to stay close to clients, and to continue to create enduring worth. Thank you very much.