Investec considers selling UK unit

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InvestecCEO

Independent Newspapers

Investec chief executive Stephen Koseff. Photo: Simphiwe Mbokazi.

Johannesburg - Investec Plc, the owner of a bank and money manager in South Africa and the UK, said it’s considering the sale of its London-based mortgage business after a recovery in the British home-loan market.

Investec has appointed Fenchurch Advisory to conduct the sale, the Johannesburg- and London-based company said in a statement today. Investec’s exposure to Kensington’s loan book totals 814 million pounds ($1.33 billion).

Investec bought Kensington in August 2007 for 283 million pounds as the subprime market ground to a halt after record US mortgage defaults.

Loan losses at the business rose by more than two-thirds to 93.2 million pounds in the 12 months through March 2009.

Investec said the unit, which has posted a cumulative pretax profit since 2007, is attracting potential bidders.

“Having received certain expressions of interest and with the ongoing recovery in mortgage lending and wholesale funding markets, Investec believes that Kensington is now well placed to continue growing and Investec believes that this growth potential may be better realised under different ownership,” said Ursula Nobrega, the bank’s head of investor relations.

Investec said it will provide an update in March on the possible sale in Australia of its asset finance and leasing business and professional finance division, which lends to doctors, dentists and lawyers.

Operating profit rose 12 percent in the nine months through December from the year-earlier period, Investec said, without giving details.

Assets under management fell 2 percent to 108 billion pounds after a weaker South African currency eroded the value of funds managed in rand.

Investec stock rose 2.5 percent to 406.7 pence as of 9:45 a.m. in London. - Bloomberg News


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