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Cape Town - In its unaudited results for the six months to end-September 2016, international specialist bank and asset manager Investec [JSE:INL] on Thursday announced a 0.7% increase in operating profit to £281.4m (2015: £279.4m) – a 1.6% rise on a currency neutral basis.
Statutory adjusted earnings per share (EPS) before goodwill, acquired intangibles and non-operating items increased 1.8% from 22.3 pence to 22.7p – a 2.2% rise on a currency neutral basis. Ongoing operating profit slipped 0.2% to £314.5m (2015: £315.0m) – 0.6% down on a currency neutral basis. Ongoing adjusted EPS before goodwill, acquired intangibles and nonoperating items rose 0.8% from 25.5p to 25.7p – a 1.2% gain on a currency neutral basis.
Recurring income as a percentage of total operating income amounted to 72.4% (2015: 71.6%). The annualised credit loss charge as a percentage of average gross core loans and advances amounted to 0.19% (2015: 0.22%), with a marginal increase in impairments.
Third party assets under management increased 16.5% to £141.8bn (March 31 2016: £121.7bn) – a 10.3% surge on a
currency neutral basis. Customer accounts (deposits) went up 17.7% to £28.3bn (March 31 2016: £24.0bn) – an increase of 7.3% on a currency neutral basis. Core loans and advances increased 16.1% to £20.4bn (March 31 2016: £17.5bn) – a 4.0% lift on a currency neutral basis.
The UK legacy portfolio reduced from £583m at March 31 2016 to £535m largely through asset sales, redemptions and write-offs. The legacy business reported a loss before taxation of £33.0m (2015: £35.5m).
Capital remained well in excess of current regulatory requirements, and liquidity remained strong with cash and near cash balances amounting to £13.1bn. The board declared a dividend of 10.0p per ordinary share (2015: 9.5p), a 5.3% gain.
Investec CEO Stephen Koseff said: “We are pleased with the growth in net interest income and fees and commissions, as well as good fund management inflows. We continue to invest with confidence in our business to build even stronger franchises.”
Bernard Kantor, managing director of Investec, said: “We have built a highly regarded asset management and wealth
management business as well as a leading specialist banking business in South Africa. We are making good progress in the development of our UK specialist banking franchise. We continue to focus on enhancing our returns on capital invested.”
