20th Mar 2015 09:04
LONDON (Alliance News) - Investec PLC Friday said it expects its wealth and asset management divisions' results for its current financial year to beat last year's numbers, bolstered by higher funds under management and billions of pounds of net inflows, although its view on the specialist banking business is mixed.
The Anglo-South African specialist bank and asset manager said that group results for the year ending March 31 have been hurt by the South African rand's 11% depreciation against its sterling reporting currency.
The wealth and investment division's results have been helped by net inflows of GBP2.6 billion, while the asset management side has had net inflows of GBP2.4 billion, according to Investec.
Investec expects its South African specialist bank to report results "substantially ahead" of the prior year in rand, while its UK specialist bank's results are expected to come in below those reported last year.
"Against this backdrop of improved operating results and the depreciation of the rand, [adjusted] operating profit is expected to be ahead of the prior year in pounds sterling (a solid increase in rands)," Investec said.
Investec also expects its capital ratios to be within its target total capital adequacy range, with the common equity tier 1 ratio to be "slightly below" the 10% targeted for 2016. It said its leverage ratio is "sound" and "well above" the 6% target on a Basel III "fully loaded" basis.
Impairment charges are expected to be about 17% lower than the prior year, Investec said.
"South Africa has seen a normalisation in impairment trends, whilst impairments on the UK legacy portfolio remain elevated," Investec said.
Investec shares were up 0.7% at 602.00 pence on Friday morning.
By Samuel Agini; [email protected]; @samuelagini
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