Investec results to be hit by weak rand, volatile markets

Dual-listed bank and asset manager Investec said on Friday that its results have been hit by the slump in the South African rand and equity market volatility, but operating profit will be a touch ahead of the previous year.

In a pre-close trading statement, Investec said results at its asset management arm will be behind last year.

On a brighter note, it expects results at the UK specialist banking business to be substantially ahead of the previous year, while results from the South African Specialist Banking business are expected to be comfortably ahead.

Investec’s wealth and investment arm is expected to report results slightly ahead of the previous year.

Overall, the group said its operating profit is likely to be marginally ahead.

Revenue is seen slightly lower than prior years in sterling but ahead in neutral currency, while recurring income as a percentage of total operating income is expected to be around 71% versus 74% in 2015.

Impairments are expected to be around 20% lower than the prior year while expenses will likely be lower, but higher in neutral currency.

For the period from the end of March 2015 to the end of February 2016, third party assets under management fell 6% to £116.2bn, while customer accounts deposits increased 2% to £23bn and core loans and advances rose 4% to £17.9bn.

At 0945 GMT, Investec shares were up 0.4% to 503.50p.