Investec sees FY in line despite UK, SAfrica challenges

Despite Brexit uncertainties and political turmoil in South Africa, wealth manager Investec on Friday said full year operating profit was expected to be in line with 2016.

The company warned that impairments in South Africa and the ongoing UK business were expected to rise although the credit loss ratio remained at the lower end of the group's long term range at approximately 0.30%.

Investec said group revenue was expected to be ahead of the previous year, with recurring income set to make up 76% of total operating income.

Third party assets under management rose 9.1% in the year up to February 28 to £164.5m. Customer deposits increased 5.5% to £30.7bn while core loans and advances were up 12% to £25.4bn.

“The group has achieved satisfactory operating performance against a challenging backdrop in its two core geographies,” Investec said in a statement.

“The UK economy has continued to be influenced by the complexities of Brexit, while the result of the December elective conference has since driven an improvement in the South African economic outlook, which should positively impact activity levels going forward.”

“Operating fundamentals across the group have largely continued the trends seen in the first half of the financial year, with performance underpinned by sound growth in the group's key earnings drivers and a solid recurring income base.”