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TOP NEWS: Investec annual profit up despite low funds under management

18th May 2023 08:24

(Alliance News) - Investec PLC and Ltd on Thursday reported a "strong" financial performance, though funds under management buckled under a challenging macroeconomic backdrop.

The Sandton-based financial services firm lifted its pretax profit to GBP979.9 million, up 41% from GBP697.3 million year earlier.

Net interest income was 38% higher at GBP1.30 billion from GBP945.3 million.

But funds under management decreased by 4.5% to GBP61.0 billion from GBP63.8 billion, largely reflecting unfavourable market movements.

Net inflows were GBP377 million, with inflows of GBP810 million in discretionary FUM was partly offset by GBP433 million in net outflows in non-discretionary FUM.

Investec said net core loans increased by 1.0% - or 7.7% at constant currency - to GBP30.2 billion from GBP29.9 billion, largely driven by corporate lending and residential mortgage lending in both of its core geographies of South Africa and the UK.

Investec declared a final dividend of 17.50 pence, up 25% from 14.00p previously, on the back of strong earnings. This brought the total payout for the year to 31.0p, 24% higher than 25.0p.

Earnings per share grew by 65% to 85.8p from 52.0p, while headline EPS was up 25% to 66.8p from 53.3p.

Chief Executive Fani Titi said the group achieved "strong" results in a challenging macro backdrop.

The group said two executive directors, Ciaran Whelan and Richard Wainwright, will step down at the annual general meeting to be held on August 3. This reduces the number of executive directors to two, CEO Titi and Nishlan Samujh, the finance director.

Wainwright also will step down from his role of chief executive of Investec Bank Ltd during the course of 2024.

The company also said Non-Executive Director Khumo Shuenyane, having reached nine-year term, will step down on August 3.

Zarina Bassa, another non-executive director, will step down on August 8, 2024, having reached nine years on board.

Going forward, Investec expects its revenue outlook to be underpinned by moderate loan book growth.

"The group is well positioned to continue supporting its clients notwithstanding the uncertain macroeconomic outlook," it said.

In Johannesburg, Investec shares were down 1.2% at ZAR102.82 on Thursday. In London, Investec shares lost 0.4% to 435.60p.

By Artwell Dlamini, Alliance News reporter

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