20th Mar 2020 07:19
(Alliance News) - Banking and wealth management services firm Investec PLC warned on Friday a "challenging" operating environment is going to lead to a drop in annual profit.
Anglo-South African Investec, listed in both London and Johannesburg, has forecast a 7% to 14% fall in adjusted operating profit for its year ended March. Adjusted earnings per share are guided to decline by 16% to 23%.
In financial 2019, Investec posted an adjusted operating profit of GBP732 million and adjusted earnings per share of 60.9 pence.
The company blamed challenging market conditions as well as normalisation in its tax rate. The environment was particularly tough in the second half of its year, Investec said, in both the UK and South Africa.
Further, fourth-quarter operating performance is expected to have been held back by the effect of the Covid-19 pandemic on global markets.
"Investec has delivered a resilient performance in challenging market conditions. We have also made notable progress in the simplification of the business and have continued to invest in our platforms to achieve sustainable growth for the long term," said Chief Executive Fani Titi.
"In these current difficult times, we are resolutely focused on the safety of our people, the integrity of our balance sheet and supporting our clients. We remain optimistic about our longer-term potential."
Full-year core loans are expected to have risen 3.4% to GBP25.79 billion, though without foreign currency headwinds they rose 7.2%. Customer deposits fell 0.3% to GBP31.23 billion, though they rose 3.6% at constant currency.
Investec's total wealth & investment assets under management declined by 7.9%, or 6.2% at constant currency, to GBP36.81 billion. In the UK, it fell 0.4% but in Southern Africa it was down 13%.
Investec sees adjusted operating profit from the Bank & Wealth division falling 16% to 22% from the GBP552 million achieved a year before.
By George Collard; [email protected]
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