Investec says six-month profit likely to be improved
Specialist investment banking and wealth management group Investec told investors on Friday that it was likely to have improved profit for the six months to end-September. Adjusted operating profit had, however, "grown comfortably" despite tough economic conditions.
Its wealth and investment business was expected to report results comfortably ahead of the prior period, while the asset management division was expected to report results in line with the previous period, Investec said in a pre-close presentation to investors on Friday.
Group revenue improved while expenses grew in line with revenue. A tough economic outlook weighed on the results, while expenses grew as a consequence of continued planned infrastructure and franchise investments, as well as costs related to the London office’s future relocation.
The geopolitical environment had been challenging, with uncertainties both over the complexity of the Brexit negotiations, and the South African political environment, Investec said. This had been offset somewhat by a supportive global economic outlook. Earnings in SA were hit by lower activity levels, while the UK business had a strong performance.
Activity levels had remained reasonable, and the client base resilient, Investec said.
Recurring income as a percentage of total operating income was expected to be approximately 75%, compared to 72% in the previous comparable period.
To end-August, third-party assets under management increased 6.1% to £160.0bn, and customer deposits increased 1.3% to £29.5bn. Total impairments rose to just more than £60m, from about £45m.
The company’s results for the half year to end-September are expected on November 16.