19th Mar 2021 08:25
(Alliance News) - Investec PLC & Ltd on Friday said it expects to report a mixed result for its current financial year, with adjusted profit set to fall on lower interest rates and a reduction in client activity, despite a rise in managed funds.
The Anglo-South African bank also announced that Chair Perry Crosthwaite will step down at Investec's annual general meeting on August 5, alongside two non-executive directors - Mark Malloch-Brown on the same date and Charles Jacobs at the end of June.
Crosthwaite has been chair of Investec for three years since 2018, and part of the bank's board for 11 years since 2010.
Investec said it is in the process of searching for a successor.
For the financial year ending March 31, the company expects adjusted operating profit to be between 16% and 24% lower from GBP609.8 million posted for the year before. Adjusted earnings per share are guided to decline to between 24 and 27 pence from 33.9p the prior year.
However, net asset value per share as at March 31 is set to rise to between 436p and 465p, a 5.3% to 12% increase from 414.3p the same date the year before.
For the 11 months ended February 28, Investec's core loans grew 5.5% to GBP26.28 billion from GBP24.91 billion for the full financial year prior, on increases in the UK, while customer deposits rose 5.9% to GBP34.13 billion.
As at February 28, total third-party funds under management were up 27% to GBP57.03 billion from GBP45.02 billion at the end of March 2020, with net inflows reaching GBP961 million.
Concerning dividends, Investec noted the updated guidance from the Prudential Authority, an arm of the South African Reserve Bank, and from the UK Prudential Regulatory Authority.
In mid-February, the PA guided that banks may resume payouts, "provided the benefits of temporary regulatory relief measures are not used and the resultant capital position supports both the distribution and anticipated growth in the economy".
As a result, Investec will consider a final dividend as part of the normal board process leading to the publication of its annual results on May 21, it said. The group is targeting a dividend payout ratio of between 30% and 50% of adjusted EPS.
"We are encouraged by the momentum we are seeing across our business, the continued recovery of markets and the positive developments related to Covid-19 vaccines. Our expected performance demonstrates the strength of our underlying client franchises, the continued execution of our strategic objectives and the resilience of our people in what has been an unprecedented year," said Chief Executive Officer Fani Titi.
"While the general outlook is improving, the long-term impact of the pandemic is uncertain. Investec remains well capitalised, highly liquid, and well provisioned for impairments. With the simplification of the group now substantially complete, we are positioned to pursue long term growth," Titi added.
In London, shares in Investec were down 3.9% at 222.20 pence on Friday.
In Johannesburg, Investec's 'PLC' shares were 3.8% lower at ZAR45.43, while its 'Ltd' shares are down 3.7% at ZAR43.37.
By Dayo Laniyan; [email protected]
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