Investec capitalises on slight market recovery

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Investec capitalises on slight market recovery

Operating profit for the year to March 31 2014 increased 28 per cent to 7.3 million rand from 5.7 million rand in 2013, and recurring income as a percentage of total operating income amounted to 70.7 per cent from 68.6 per cent in 2013.

Headline earnings per share increased to 550 cents for the period under review from 425 cents in the previous year, and the dividend per share also took an upswing at 327 cents from 256 cents in 2013.

“These are good results and very much in line with expectations, despite the weakness of the rand,” Stephen Koseff, CEO of Investec, said in a statement.

“We have made significant strides to reshape and simplify the group to focus on our core businesses with the restructuring and sale of part of our Australian businesses, the sale of our Trust businesses, Lease Direct and strong interest in Kensington.”

(READ MORE: Investec shares up on hopes for Kensington mortgage unit sale)

[DATA INL:Investec Limited] is an international specialist bank and asset manager that provides financial products and services the United Kingdom, South Africa, Australia as well as certain other countries.

Operating income increased to 6.5 million rand from 5.7 million rand 2013, and profit before taxation increased marginally to 2.4 million rand for the period under review from 2.1 million rand.

Impairments on loans and advances decreased from 868 million rand to 638 million rand in 2013, and the credit loss charge as a percentage of average gross core loans and advances has improved from 0.65 per cent at 31 March 2013 to 0.44 per cent.

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The percentage of default loans (net of impairments but before taking collateral into account) to core loans and advances amounted to 1.50 per cent from 1.93 per cent in 2013. The ratio of collateral to default loans (net of impairments) reportedly remained satisfactory at 1.55 times from 1.44 times in 2013.

Revenue for Investec’s asset management Southern Africa segment decreased to 76.2 million rand from 81 million rand in 2013, but all other segments saw positive revenue increases.

The wealth and investment Southern Africa segment grew to 20 million rand from 16.7 million rand, and the specialist banking segment for the region from 201.1 million rand from 189.7 million rand in the previous year.

“The South African Specialist Banking business reported operating profit 29.2% ahead of the prior year in rands, whilst the United Kingdom Specialist Bank benefited from a significant decline in impairments, reporting an increase in operating profit of 29.9 per cent,” said Investec.  

“The Australian business reported a loss impacted by strategic restructuring. Consequently, the overall Specialist Banking business reported operating profit marginally ahead of the prior year.”

Ongoing business revenue for the region increased to 201.1 million rand for the period from 189.7 million rand.

Total group revenue for Southern Africa amounted to 297.4 million rand for the period from 287.5 million rand from 2013.

“Economic conditions in the developed world have continued to improve. The United Kingdom economy has gained momentum which is evident in the increased activity levels experienced by Investec’s businesses. The South African economy is going through a period of weakness,” Investec explained.

“However, the group is still seeing encouraging levels of activity across its client base.”