Investec’s profit rises 3%

Loan growth and fund inflows helped boost Investec’s full-year profit.

Johannesburg - Investec, owner of a bank and money manager in South Africa and the UK, 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.

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 UK, 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 8.30am in London.

BLOOMBERG