Investec expects profit bounce in full-year results
Investec has said it expects adjusted operating profit to be ahead of last year’s figures, coming in as high as £956m.
In a trading statement, the FTSE 250 bank and wealth manager said adjusted operating profit for the year was forecast to come in between £888m and £956m, compared to last year’s figure of £884.5m.
Investec also said that pre-provision adjusted operating profit was expected to be between £1.01bn and £1.08bn, five to 12 per cent ahead of the previous year.
This was due to the firm reducing its cost-to-income ratio, which is expected to be below the 53.8 per cent from the prior year, as revenue has grown ahead of costs.
The bank’s full-year results are due to be released on 22 May.
However, Investec’s basic earnings per share are expected to have plummeted between 30 and 36 per cent, to between 67.2p and 73.5p.
“The prior year was positively impacted by the significant net gain from the implementation of the UK Wealth & Investment combination with Rathbones which was partially offset by the effects of Burstone’s deconsolidation; and the amortisation of intangible assets associated with the Rathbones combination in the current period,” Investec said.
Investec’s 41.25 per cent stake in Rathbones contributed £69.1m in post-tax underlying profit, compared to £66.9m in the previous year.
Meanwhile, funds under management in its Southern African arm jumped from £20.9bn to £23.9bn, while Rathbones’ assets rose from £107.6bn to £109.2bn.
Investec also said that customer deposits in its bank have increased by 4.4 per cent in the last 11 months, or three per cent when currency is adjusted.
“We are pleased with the performance of our client franchises, which continued to report progress against our strategic priorities and support revenue growth in a challenging operating environment,” said Investec chief Fani Titi.
“Our diversified business model and strong balance sheet allows us to continue supporting our clients and achieve results within our financial target ranges.”