21st Nov 2013 08:39
LONDON (Alliance News) - Specialist bank and asset manager Investec PLC Thursday reported broadly stable pretax profits for the recent half year, but said operating results were weakened by the depreciation of the rand against sterling.
Pretax profits were broadly stable at GBP198.5 million for the six months to September 30, compared with GBP198.1 million for the corresponding period last year.
"We have delivered results at the top end of what we anticipated, despite a sharp fall in the rand without which we would have shown a 13% increase in earnings. We have worked hard to deal with many of the legacy issues within the group and will continue to take decisive action in order to ensure Investec is in the right shape to take advantage of the recovery in the world economy and markets," Chief Executive Stephen Koseff said in a statement.
The bank, which counts the UK, South Africa and Australia as its three principal markets, said its asset management business delivered strong results, with operating profit up 6.7% to GBP71.9 million, after attracting net inflows amounting to GBP1.4 billion. The wealth management business saw its operating profit rise to GBP30.8 million from GBP22.9 million, supported by net inflows of GBP0.4 billion and improved operating margins.
But Investec's specialist banking business suffered, as operating profit decreased by 13% to GBP120.0 million. Investec said the banking arm's continuing operations were profitable but suffered from GBP49.2 million in losses made by its legacy business in the UK.
At group level, Investec's net interest income decreased to GBP318.4 million from GBP349.8 million, primarily because of a lower return earned on the group's liquid asset and cash portfolio in South Africa following a decrease in interest rates, and less interest earned on the legacy portfolios which are running down.
Investec reported core/common equity tier one ratios of 9.1% for Investec PLC (per Basel II) and 9.5% for Investec Limited (per Basel III), as of September 30. The bank is targeting a minimum core/common equity tier one capital ratio above 10% by March 2016.
Investec shares were Thursday quoted at 425.10, down 0.4%.
By Samuel Agini; [email protected]; @samuelagini
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