Investec rakes in £1bn profit after lending and deposit boost
Investec’s profit soared to more than £1bn in its latest financial year after increased lending and deposits bolstered its revenue.
The FTSE 250 bank recorded a 7.8 per cent annual jump in operating profit to just over £1bn for the year to 31 March, 2025.
This beat the bank’s own upgraded forecast in March, where it anticipated its profit to reach highs of £956m.
Revenue totalled £2.2bn, up from £2.1bn in the previous year. This was driven by a 4.7 per cent increase in lending to £32.4bn with a strong performance in its South African division.
Investec said growth in loans to UK businesses was offset by higher repayment rates due to the high interest environment.
Customer deposits jumped 4.1 per cent to £41.2bn on the back of a strong performance in retail and non-wholesale deposits across both the UK and South Africa.
Investec awaits motor finance ruling
Operating costs increased 2.8 per cent to £1.2bn but were offset by higher revenue Investec said.
This meant the group’s cost-to-income ratio, which measures its efficiency by comparing operating costs to income with a lower figure indicating higher stability, reduced to 52.6 per cent.
Rathbones – the wealth and investment manager Investec has a 41 per cent stake in – reported funds under management at £104.1bn.
Investec has reserved £30m in provisions for the motor finance scandal, which the Supreme Court is expected to give a ruling on in the early summer.
The highest court in the UK will, in early April, decide whether to overturn the Court of Appeal’s October ruling that it was unlawful for banks to pay a commission to a car dealer without the customer’s informed consent.
Investec said: “It will continue to assess developments and potential impacts, including the outcome of the appeals, any announcement by the Financial Conduct Authority of their next steps, and any action by other regulators or government bodies.”
Fani Titi, group chief executive, said: “We are pleased to report a strong performance in a volatile operating environment, with the group generating a return on equity of 13.9 per cent, in line with guidance provided in May 2024.”
Titi added: “We are scaling and leveraging our client franchises, allocating capital with discipline and investing in clearly defined growth initiatives to enhance our existing platforms.”