There was a long discussion before Investec decided to adopt the zebra as its logo. The group MD, Bernard Kantor, argued that as a herbivore, the zebra was prey, while Investec should be a predator.
He had visions of a zebra on the spit being served up at a Rand Merchant Bank (RMB) bosberaad.
But today the association between the zebra and Investec must be the closest of any company logo in SA, and in London, few people who (still) ride the underground will have failed to notice the advertising.
One thing that might have prevented Ninety One from fighting for independence from Investec was losing the zebra logo. Certainly, the new Ninety One logo is completely nondescript.
For years, many shareholders were drawn to Investec by the quality of Ninety One, known as Investec Asset Management for the first 28 years of its life.
As for the bank that Kantor and his partner Stephen Koseff built, it was a very different kind of banking operation. It did not have branches, and focused on the top end of the retail market. Even today it has just 90,000 personal clients.
Under the current CEO, Fani Titi, it has no plans to dilute its exclusivity. Compare that to newcomer Discovery Bank’s almost 400,000 clients. While Investec retains its exclusive cachet, Titi is being naive if he doesn’t see Discovery Bank as a threat.
Back in the 1980s, when Investec emerged onto SA’s investment banking scene, its main competitor was UAL. This bank had been set up by Anglo American as a clone of a City of London merchant bank, down to the pinstripes and the double gin and tonics at lunchtime.
Investec was, and still is, refreshingly entrepreneurial in comparison. So it is a pity that for most of its life it has played second fiddle to RMB, founded by three extraordinarily able bankers: GT Ferreira, Laurie Dippenaar and Paul Harris. At the turn of the millennium it was a poor third to Standard Bank’s investment banking unit under Jacko Maree.
Kantor and Koseff’s entrepreneurial flair often meant poor due diligence, culminating in the purchase of Z-grade UK mortgage provider Kensington just days before the global financial crisis. Investec has been a "value" share for at least a decade.
But a month ago, its price to book leapt from 0.8 to 1.1, meaning that it is finally trading at a premium to its tangible NAV.
In his three years at the top, Titi has rightsized the business, selling the Australian operation to focus on SA and the UK, and exiting the private equity portfolio in Hong Kong. And against the tide, he closed the Click & Invest digital investment operations to focus on old-fashioned face-to-face sales.
Investec’s wealth and investment business remains strong and has acquired robust franchises such as the HSBC private client operations in Joburg and the Carr Sheppards network in the UK.
In the five months to August 31, the private client assets in SA increased by 9.5% to R365bn, and by a similar level in the UK to £45.4bn.
In the poorer-quality specialist banking operations, demand for loans was muted in SA, increasing less than 2% to R292bn, but in the UK, where the economic recovery has been faster, it jumped 9.2% to £13.5bn.
Like its peers, Investec’s results will be flattered by last year’s low base — but its recovery is that much stronger, helped by the UK’s turnaround. Headline earnings per share will be up anything from 120% to 150%.
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