“Over the past year the group has focused on simplifying and reshaping its specialist banking business with a view to improving returns and has successfully restructured and sold certain businesses,” it said.
“These transactions include the sale of Investec Bank Australia Limited to the Bank of Queensland Limited, which became effective on 31 July 2014, and the pending sales of the UK Kensington business and the Irish Start mortgage business.”
The specialist bank and asset manager added that upon completion of these pending transactions the group is expected to, among other things, bolster its common equity tier one ratio in Investec plc from 9.5 per cent to approximately 11.0 per cent.
The group’s operating profit before taxation grew 26.9 per cent to 4.2 billion rand for the six months ending 30 September 2014 from 3.3 billion rand for the same period in 2013.
Stephen Koseff, chief executive officer of [DATA INL:Investec] said, “These results demonstrate that we are delivering on our promises. The results would have been even stronger but for the continued weakness of the rand.”
“The investments we have made in the asset management and wealth and investment businesses are supporting solid net inflows. The performances in our South African bank and the corporate and institutional bank in the UK demonstrate the strength of our franchise,” he added.
However, earnings attributable to shareholders declined by 30 per cent from 2.4 billion rand for the six months ended 30 September 2013 to 1.7 billion rand for the 2014 period.
[DATA INLP:Investec Bank Limited], a subsidiary of Investec Limited, posted an increase in headline earnings attributable to ordinary shareholders of 29.6 per cent, while its balance sheet remains strong with a capital adequacy ratio of 15.6 per cent.
Group basic earnings per share decreased 36.4 per cent to 157 cents in 2014 from 247 cents in 2013 and its net asset value per share decreased 0.7 per cent to 6 557 cents from 6 603 cents.
“The group has reshaped its business model, both through the sales of businesses referred to above and the restructuring that has taken place over the past few years. Whilst economic conditions have improved in the developed world, volatility and uncertainty remain a feature,” Investec said.
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“Additionally, South Africa’s economic growth has been weak with a difficult outlook, which could negatively affect growth prospects. Notwithstanding, the group believes that these strategic initiatives place Investec in a favourable position to make progress in its core client-and geographic- markets.”