Specialist bank and wealth manager Investec has upped its earnings forecast for its 2022 year, saying its efforts to simplify and focus the group were bearing fruit, while its performance was already in line with pre-pandemic levels.
The group spun off its investment management business, now called NinetyOne, in March 2020 even as SA grappled with its first wave of Covid-19 infections. In a pre-close update on Friday, Investec also cited the resilience of its client franchises as it said it expected adjusted operating profit before tax to rise as much as 106% to ˆ£293m (R5.9bn) in its first half ending September.
Investec said the five months to August had seen a general pickup in client activity and lower funding costs, and although corporate credit demand was muted in SA, this business line was faring better in the UK.
Based on current business momentum, for the full 2022 year, the group said it expected to report adjusted earnings per share above the upper end of the 36p to 41p range it guided for in May.
Within Specialist Banking, core loans grew by 6.5% to £28.2bn, rising 1.8% in SA, and 9.2% in the UK.
The Wealth & Investment business grew funds under management by 9.9% to £63.8bn to end-August, supported by net inflows of £1.4bn, favourable market movements and investment performance.
“This recovery in performance underscores the resilience of our client franchises, supported by improved economic conditions,” said group CEO Fani Titi.
“As Covid-19 restrictions ease, we look forward to growth alongside our clients and increased face to face engagement, which is core to our values and culture,” he said.
In morning trade on the JSE, Investec’s shares were trading 2.47% higher at R61, having risen by two thirds so far in 2021. The group's shares have risen by almost a fifth since the start of 2020.
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