Investec defies weak rand. Profits up, shares down.

JOHANNESBURG, May 19 (Reuters) – South African bank and asset manager Investec reported a 4.8 percent increase in full-year profit on Thursday, helped by net new fund inflows and a strong showing at its banking unit.

Investec, which is also listed in London, said statutory adjusted earnings per share (EPS) rose to 41.3 pence from 39.4 pence a year earlier.

Investec_Asset_ManagementIt’s Wealth and Investment and Asset Management businesses together took in a net 5.3 billion pounds ($7.73 billion) of assets during the financial year and Specialist Banking’s operating profit increased by 4.3 percent to 409.2 million pounds.

“The decisive action we took within the Specialist Bank in prior years, supported by continued penetration of our target client base, has achieved strong results,” said Chief Executive Stephen Koseff.

However, macro uncertainty and volatility in the group’s key operating geographies during the financial year impacted overall results, Investec said, adding that the rand had depreciated by 16.3 percent over the period.

“Overall a good performance in a challenging environment reinforces our strategy of building a diversified business model,” said Koseff.

The South African business’s operating profit rose 12.7 percent, while the combined UK and Other businesses posted a 20.9 percent increase.

Read also: Investec AM heads $670m Emerging Africa Infrastructure Fund

Net interest income from lending, rose 6.1 percent to 571.9 million pounds.

The Johannesburg-based company increased its full-year dividend to 21 pence per share from 20 pence last time.

Investec’s Full-Year Profit Rises 3% as Bank Lending Increases

By Renee Bonorchis

(Bloomberg) — Investec Plc, owner of a bank and money manager in South Africa and the U.K., said full-year profit rose 3 percent on loan growth and fund inflows.

Net income for the 12 months ended March 31 rose to 423 million pounds ($616 million) from 410 million pounds a year earlier, the London and Johannesburg-based lender said in a statement on Thursday. Statutory adjusted earnings per share rose 4.8 percent to 41.3 pence, compared with the 43.3 pence median estimate of eight analysts surveyed by Bloomberg.

Read also: Investec in $1bn bet on four Airbus A380 “superjumbos” for Emirates Airline

Investec, which also has operations in Australia, makes most of its operating profit in South Africa, where the rand has dropped 20 percent against the pound since the beginning of March 2015. The South African economy is slowing, unemployment is rising and the country is at risk of having its credit rating downgraded to junk status. With interest rates having risen twice this year, consumers are under pressure as it gets more difficult to repay debt.

“The macro environment remains volatile due to uncertainty in global markets, the pending EU membership referendum in the U.K., and economic, political and social challenges in South Africa,” Investec said in the statement.

Investec’s specialist-banking operating profit increased 4.3 percent to 409.2 million pounds and asset management recorded net inflows of 3.2 billion pounds, according to the statement.

Investec dropped 1.7 percent to 468.9 pence as of 8:30 a.m. in London.

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