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Johannesburg - If you stop Investec [JSE:INL] CEO Stephen Koseff in the street and ask him about the global financial crisis and its impact on the banking sector, there is one point he will raise without question: Investec never once needed any form of bailout or financial support from governments or regulatory authorities, even at the height of the crisis.
This is a point he has raised at every results presentation and operational update over the last two years and continues to emphasise.
Arrogance perhaps, but there have always been lingering concerns about Investec.
Was it just a bull market stock? Could it cope with tough international competition in the UK and the subsequent fallout in the European banking sector? Could it survive just being a high-end private and investment bank?
Analysts point out that Investec has done more than simply survive the crisis - it has thrived.
At a time when it needed to buff up its business model and diversify its income and funding base, the bank worked hard on growing the asset management business as well as its deposit taking offering.
Its asset management business now contributes 19.3% of group profit, and assets under management have risen to a record level of £49.5bn with the majority of these gains coming in the UK.
Where Nedbank Group [JSE:NED] and Standard Bank Group [JSE:SBK] have floundered in the investment banking and capital markets space in the last year, Investec has made gains.
Both Investec's listed entities have seen a flat 12 months, but Investec Limited and Investec Plc are catching the eye of certain "value" asset managers.
Double delight
The team at Cannon Asset Management has about 4% of both its Core Companies and Equity funds invested in Investec Limited, while Allan Gray added Plc to its Optimal fund during the last quarter after holding none before that.
Investec has two other factors which count in its favour in 2011 despite a gloomy outlook in Europe, particularly Ireland where it has some exposure.
Not having had to go to banking authorities with a begging bowl means it has few if any restrictions on remuneration for high-flying deal makers. This gives it the freedom to poach skilled bankers from other banks still beholden to government masters.
The second factor is a sea of liquidity desperately seeking investments which produce yield as interest rates stay at record lows. This is likely to fuel infrastructure spend in resource rich markets such as Africa and Australia, where Investec has a strong presence.
European banks such as Barclays, RBS and SocGen have been marked down as investor concerns around growth prospects weigh on the market.
Investec has been lumped together with these groups, despite showing resilience through the crisis and an ability to adapt and grow in the toughest cycles.
Considering that Investec has a mix of both European and emerging market exposure and a solid dividend track record, this rating may not be justified.
- Fin24.com
This is a point he has raised at every results presentation and operational update over the last two years and continues to emphasise.
Arrogance perhaps, but there have always been lingering concerns about Investec.
Was it just a bull market stock? Could it cope with tough international competition in the UK and the subsequent fallout in the European banking sector? Could it survive just being a high-end private and investment bank?
Analysts point out that Investec has done more than simply survive the crisis - it has thrived.
At a time when it needed to buff up its business model and diversify its income and funding base, the bank worked hard on growing the asset management business as well as its deposit taking offering.
Its asset management business now contributes 19.3% of group profit, and assets under management have risen to a record level of £49.5bn with the majority of these gains coming in the UK.
Where Nedbank Group [JSE:NED] and Standard Bank Group [JSE:SBK] have floundered in the investment banking and capital markets space in the last year, Investec has made gains.
Both Investec's listed entities have seen a flat 12 months, but Investec Limited and Investec Plc are catching the eye of certain "value" asset managers.
Double delight
The team at Cannon Asset Management has about 4% of both its Core Companies and Equity funds invested in Investec Limited, while Allan Gray added Plc to its Optimal fund during the last quarter after holding none before that.
Investec has two other factors which count in its favour in 2011 despite a gloomy outlook in Europe, particularly Ireland where it has some exposure.
Not having had to go to banking authorities with a begging bowl means it has few if any restrictions on remuneration for high-flying deal makers. This gives it the freedom to poach skilled bankers from other banks still beholden to government masters.
The second factor is a sea of liquidity desperately seeking investments which produce yield as interest rates stay at record lows. This is likely to fuel infrastructure spend in resource rich markets such as Africa and Australia, where Investec has a strong presence.
European banks such as Barclays, RBS and SocGen have been marked down as investor concerns around growth prospects weigh on the market.
Investec has been lumped together with these groups, despite showing resilience through the crisis and an ability to adapt and grow in the toughest cycles.
Considering that Investec has a mix of both European and emerging market exposure and a solid dividend track record, this rating may not be justified.
- Fin24.com
