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Johannesburg - South African investment bank and asset manager Investec [JSE:INL] fell short of expectations with a 4.5% decline in full-year profit, due to a surprise increase in bad debt costs related to the European debt crisis.
Investec, which is also listed in London, said earnings per share after adjustments totalled 40.6 pence in the year to the year end-March, compared with 42.5 pence a year earlier.
That compares with the average estimate of 47.9 pence in a survey of eight analysts by Thomson Reuters.
The bank has reduced its dependence on lending by increasing its fund management business.
Investec had said in March it expected a slight rise in full-year pre-tax operating profit, as its funds and markets businesses offset continued weak demand for loans.
Pretax operating profit increased to £434.41m from £432.26m in the previous year.
Net interest income, a measure of earnings from lending, totalled £681.47m, compared with £613m a year earlier.
Impairment charges, or bad debts costs, totalled £318.23m compared with £286.58m a year earlier.
The company may need to raise as much as £75m in new capital to meet up-coming UK banking regulations, the lender's managing director told Reuters.
"If you take it at its very worst, maybe a maximum of £60m to £75m," Bernard Kantor said in a telephone interview, when asked how much the bank might need to meet stricter capital requirements in Britian, where it also has a substantial presence.
Shares of Investec were flat at R52.78 as of 09:38, in line with Johannesburg's Top 40 - (Tradeable) [JSE:J200] index of blue chips.
Investec, which is also listed in London, said earnings per share after adjustments totalled 40.6 pence in the year to the year end-March, compared with 42.5 pence a year earlier.
That compares with the average estimate of 47.9 pence in a survey of eight analysts by Thomson Reuters.
The bank has reduced its dependence on lending by increasing its fund management business.
Investec had said in March it expected a slight rise in full-year pre-tax operating profit, as its funds and markets businesses offset continued weak demand for loans.
Pretax operating profit increased to £434.41m from £432.26m in the previous year.
Net interest income, a measure of earnings from lending, totalled £681.47m, compared with £613m a year earlier.
Impairment charges, or bad debts costs, totalled £318.23m compared with £286.58m a year earlier.
The company may need to raise as much as £75m in new capital to meet up-coming UK banking regulations, the lender's managing director told Reuters.
"If you take it at its very worst, maybe a maximum of £60m to £75m," Bernard Kantor said in a telephone interview, when asked how much the bank might need to meet stricter capital requirements in Britian, where it also has a substantial presence.
Shares of Investec were flat at R52.78 as of 09:38, in line with Johannesburg's Top 40 - (Tradeable) [JSE:J200] index of blue chips.
