Investec delivers rise in half year profits

Shares in Anglo-South African banking group, Investec, got a boost on Thursday after the company announced that pre-tax profits climbed 2.6 per cent.

Pre-tax operating profit rose from £223.4m to £229.4m year-on-year (y/y) in the six months ended September 30th. However, adjusted earnings per share fell 4.4% from 20.6p to 19.7p y/y.

The group's wealth management business performed well, accounting for 39.3% of the group's operating profit. Inflows into the business during the period totalled £2.1bn.

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Recurring income as a percentage of total operating income amounted to 69.3% (2011: 67.8%).

Third party assets under management increased 2.8% to £99.5bn (March 31st: £96.8bn) - an rise of 6.7% on a currency neutral basis.

The company noted that its overall results have suffered a negative impact from the depreciation of the average Rand.

Stephen Koseff, Chief Executive Officer of Investec said: "I am encouraged by our results and the progress we have made in the last six months, particularly compared to the second half of last year. Impairments have decreased significantly and our Australian business has returned to profit. We have continued improving our efficiencies, streamlining our processes, eliminating duplication and building scale.

"Our priority is to ensure each division and geography makes a proper contribution to our business. Driving the growth in ROE remains our main focus. We have a strong franchise which is well recognised in all our markets, our business is flexible and resilient and we have a good record of overcoming the challenges presented by the global economic environment."

The dividend was maintained at 8p per share.

NR