21st Nov 2024 10:22
(Alliance News) - Investec PLC and Ltd on Thursday attributed its "solid" interim financial performance to higher interest rates and swelling lending books.
The Sandton, Johannesburg-based financial services firm said pretax profit from continuing operations was GBP352.2 million for first six months that ended September 30, up 12% from GBP315.3 million a year earlier.
In September last year, Rathbones Group PLC completed an all-share combination with Investec Wealth & Investment Ltd, which had been a UK division of Investec. Investec Wealth & Investment UK is now reported as part of Rathbones. Investec owns around 41% of Rathbones.
In July last year, Burstone acquired asset management businesses from Investec for ZAR850.0 million, as part of an internalisation.
These two businesses, Investec Wealth & Investment UK and asset management businesses, are classified as discontinued.
Following these corporate actions, Chief Executive Officer Fani Titi said the group had delivered a "solid" performance in the first half of the 2025 financial year.
Total revenue was up 5.8% to GBP1.10 billion from GBP1.04 billion, benefitting from balance sheet growth, the breadth and depth of its client franchises, as well as elevated interest rates.
Net interest income from total operations was 2.0% higher at GBP684.4 million from GBP670.9 million, driven by higher average lending books and higher average interest rates.
From total operations, non-interest revenue rose 12% to GBP418.2 million from GBP372.9 million, reflecting increased capital-light income from the Banking businesses, as well as strong growth in fees from its SA Wealth & Investment business.
Investment income also boosted non-interest revenue. Investment income more than doubled to GBP63.2 million from GBP25.4 million.
Funds under management in Southern Africa grew by 12% to GBP23.4 billion on September 30 from GBP20.9 billion on March 31.
Rathbones funds under management and administration totalled GBP108.8 billion at September 30.
Investec improved its interim dividend to 16.5 pence, up 6.5% from 15.5p.
Earnings per share slumped 47% to 36.6p from 69.6p, while headline EPS edged down to 36.6p from 36.9p. Headline earnings reflected the impact of Rathbones and Burstone transactions.
Looking ahead, Investec expects its revenue momentum to be underpinned in part by average lending book growth, and stronger client activity levels given expected improvement in economic growth.
Shares in Investec were up 0.1% to 607.00p in London on Thursday morning. In Johannesburg, Investec Ltd shares were down 0.2% at ZAR139.84, and Investec PLC shares were down 0.6% at ZAR139.20.
Rathbones was down 0.7% to 1,664.00p in London.
By Artwell Dlamini, Alliance News reporter
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