Investec sees flat H1 profits amid mixed regional performance

(Sharecast News) - Banking and wealth management firm Investec said on Friday that it expects interim results to be broadly in line with the prior period, supported by a solid performance across its core banking and wealth operations despite a volatile macro backdrop. For the six months ended 30 September, adjusted earnings per share were expected to be between 38.7p and 41.5p, compared with 39.5p a year earlier, while adjusted operating profits before tax were seen between £451.0m and £481.8m, versus £474.7m previously. Pre-provision adjusted operating profits were seen at £509.4m to £540.3m, slightly behind last year's £541.6m figure.

In Southern Africa, specialist banking profit was expected to be up to 7% ahead in SAR terms, though overall regional profit may be flat due to weaker performance in group investments. The UK business, including Investec's stake in Rathbones, was expected to deliver operating profits between 1% behind and 6% ahead of the prior year.

Core loans rose 4.7% annualised to £33.0bn, while customer deposits fell 1.9% to £40.8bn, reflecting a strategic shift in liability mix. Funds under management in Southern Africa climbed 7.8% to £25.2bn.

The FTSE 250-listed firm added that it had repurchased £46m of its £100m buyback programme and maintained strong capital levels, with CET1 ratios of 15.3% in South Africa and 12.2% in the UK, and also reaffirmed its medium-term targets, with group return on equity expected to between 13% and 14%, and return on tangible equity seen coming in somewhere between 15% and 16%.

As of 0810 BST, Investec shares were down 0.81% at 580.24p.

Reporting by Iain Gilbert at Sharecast.com