Renee Bonorchis
INVESTEC, which posted a 10 percent gain in annual profit as bad loans fell, expects a further improvement in write-downs as the UK economy strengthens.
Investec, which owns a bank and money manager in South Africa and the UK, said yesterday that net income for the 12 months to March rose to £410 million (R7.5 billion) from £372m. Impairment losses on loans and advances improved to £39.35m from £64.3m.
“In South Africa, the impairments are probably as good as it gets, but in the UK legacy book they can still come down,” Stephen Koseff, the chief executive of the London and Johannesburg-based lender, said. “We do expect it to come off a bit, as long as the UK environment remains benign.”
Investec was among 11 companies being investigated for alleged foreign currency market rigging, the Competition Commission said this week.
The bank said it would co-operate with authorities. “It was something we were only notified of two days ago so we’ll have to see where it goes,” Koseff said.
While Investec had more capital than regulators required in both the UK and South Africa, the business would “primarily concentrate on organic growth” in the coming 12 months, Koseff said.
The bank has been disposing of its least profitable assets in Australia and the UK and sold its Kensington Group mortgage business this year.
Investec makes the bulk of its operating profit in South Africa, where the economy grew at the slowest pace last year since a 2009 recession.
Shares added 0.5 percent to R115.57 yesterday. – Bloomberg