Investec sees stronger H1 earnings

JOHANNESBURG (Reuters) – South African investment bank Investec expects an improved first half performance, boosted mainly by increased assets under management, the company said on Friday.

The wealth manager said its asset management division had seen net inflows of 2.7 billion pounds ($4.4 billion) as third party funds increased by 9 percent in the five months to the end of August.

Lending contracted by 3 percent in the period after the sale of some Australian assets in July and the bank said it expected impairments to drop by 12 percent.

Investec sold its Australian professional finance and leasing businesses for A$440 million ($393 million) to Bank of Queensland as part of its strategy to offload struggling non-core operations.

Impairments in South Africa were low at the moment, but could tick up should the economy remain weak, Chief executive Stephen Koseff told investors. Bad debts in the UK would fall as the bank cleared legacy loans.

"For the group, impairments can still come down from where they were because we won't have Australia anymore. They were elevated in Australia and we have cleaned that out," Koseff said.

Earlier this week, the lender said it would dispose of Irish mortgages worth 540 million pounds ($880 million) to U.S. private equity firm Lone Star.

The deal was hot on the heels of another sale of UK mortgage business Kensington for 180 million pounds.

Investec's stock had barely moved by 0850 GMT, but has gained nearly 40 percent since January, making it the best performer among South Africa's five biggest banks so far this year.

(1 US dollar = 0.6083 British pound)

(1 US dollar = 1.1197 Australian dollar)

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