Weak UK banking hits Investec’s first-half profit
Johannesburg — Anglo-SA financial services firm Investec said on Thursday its first-half profit fell 17.2% after a weak performance in UK specialist banking.
Investec, which will consist of banking and wealth management when it spins off its asset management division, had already warned in September that its profit could fall by up to 18%, putting pressure on its share price.
Headline earnings per share, the main profit measure in SA, was 22.7p in the six months to September 30, compared with 27.4p a year earlier, Investec said.
The bank’s adjusted basic earnings per share, which reflect profits made in the course of ordinary operations, were down 4% from 30.1p in 2018 to 28.9p in 2019.
Joint CEOs Fani Titi and Hendrik du Toit said in a statement that Investec was pleased it had managed to grow assets under management, its loan book and customer deposits in a challenging environment.
“We are committed to our stated objective to simplify, focus and grow for the long term, in the interest of all our stakeholders,” they said.
Investec said in September its performance had been hurt by the effect of global trade tensions and Brexit in its key markets, as well as a jump in costs related to the closure and restructuring of some of its businesses.
It said on Thursday these factors pulled down adjusted operating profit in its UK specialist banking division, which also includes operations in the Channel Islands and Ireland, by 18.9%. Profits also fell 10.8% at its wealth and investment division.
In SA, however, these rose 8.5%, with the asset management division, which will be spun off and listed in London 2020, showing a 6.3% rise in adjusted operating profit.
Investec’s Johannesburg-listed shares were down 1.65% by 7.28am GMT. The London Stock Exchange was closed at the time of the announcement.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.