Investec profits set for £100m hike with bank latest to enjoy a boost from rising interest rates
Banking and wealth management group said it would report a significant increase in profit compared to last year, with rising interest rates boosting the firm’s bottom line.
Releasing a statement ahead of the bank’s year-end on 31 March, Investec expects to report an adjusted operating pretax profit of between £782.8m and £833.6m.
Last year’s figure was around £100m lower at £687.4m.
Investec said this reflected continued client acquisition, the effect of rising global interest rates and higher average advances.
It expects its headline earnings per share to be between 65p and 69p, at least 22 per cent ahead of the previous year.
“The group experienced strong performance, notwithstanding the complex macroeconomic backdrop that prevailed in the period,” Investec said.
“Our diversified business model and strong balance sheet allowed us to support our clients amidst this evolving environment.”
In the UK in particular, the South African London-listed bank expects its adjusted operating profit to be at least 15 per cent higher than last year.
Revenue growth recorded in the first half of the year has continued driven by higher net interest income, Investec said, although the weakening economic backdrop impacted activity levels in equity capital markets.
In South Africa meanwhile, adjusted operating profit is expected to be at least 10 per cent ahead of last year.
It confirmed that its capital and liquidity levels are “above board approved minimums” and it is “well positioned” to support clients and grow in line with its objectives.
In its half year results released in November, Investec announced a £350m buyback programme after a 19 per cent increase in revenue.
To date, the bank has acquired around 52m shares, around 5.2 per cent of the shares outstanding before the announcement. This has returned around £245m to shareholders.