21st May 2020 09:25
(Alliance News) - Investec PLC and Investec Ltd on Thursday reported results for the year to the end of March, showing a drop in profit as the bank decided against a final dividend.
Investec reported a reduction in net asset value to 414.3 pence as at March 31 from 434.1p a year earlier. Pretax profit, meanwhile, declined to GBP310.5 million from GBP514.5 million year-on-year.
Investec explained that the financial year was characterised by weak economic fundamentals, including Brexit-related uncertainties in the UK and geo-political tensions and persistent economic weakness in South Africa.
This was further exacerbated by the "sudden and extreme" Covid-19-related dislocation in global markets during the last quarter of the company's financial year.
Investec has decided not to declare a final dividend, resulting in a full year dividend of 11.0p per share compared to 24.5p paid a year earlier.
"In the course of the last two months, the social and economic impact of the Covid-19 pandemic on our customers and the markets in which we operate has affected the performance of the group," said Chief Executive Fani Titi.
"Earnings were characterised by growth in client-related revenue and much tighter cost containment. This was more than offset by significantly lower investment and trading revenue, and higher expected credit loss charges given the economic backdrop," added Titi.
Investec said customer deposits grew by 2.9% year-on-year to GBP32.22 billion from GBP31.31 billion, with interest income rising to GBP2.70 billion from GBP2.63 billion.
In contrast, investment income dropped to GBP39.3 million from GBP107.8 million a year ago. Trading income from customer flow declined to GBP63.3 million from GBP120.7 million, with trading income from balance sheet management and other trading activities decreasing to GBP26.7 million from GBP36.8 million year-on-year.
Investec PLC shares were trading 0.6% lower in London on Thursday at 160.10 pence each, while in Johannesburg, the stock was down 1.4% at ZAR35.22 a share. Investec Ltd shares were 1.8% lower in morning trading in South Africa at ZAR35.77 each.
By Evelina Grecenko; [email protected]
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