DURBAN - INVESTEC, the South African international banking and wealth management group, yesterday declared an interim dividend of 5.5 pence (R1.12) a share for the six months to end September, boosted by a strong capital, funding and liquidity position, despite the Covid-19 impact on its business.
Early this year the group skipped a final dividend for the year to end March after it endorsed the objectives and guidance from the Prudential Authority in South Africa and the recommendations of the UK Prudential
Regulation Authority in relation to the preservation of capital.
Chief executive Fani Titi said the firm was encouraged by the resilience of their loan book, the performance of their core franchises against a tough backdrop and progress made on their strategic objectives.
“Tangible net asset value per share increased by an annualised 10.4 percent and a dividend of 5.5p has been declared,” Titi said.
Investec reported a 48.4 percent decline in adjusted operating profit to £142.5 million (R2.9 billion) and adjusted basic earnings per share (Eps) fell by 50 percent to 11.2p, while headline earnings per share decreased by 45.9 percent to 9.2p.
The group generated a return on equity of 5.3 percent. Its total revenue declined by 24 percent to £729m and the group said this was a result of the impact of the economic challenges driven by Covid-19 outbreak.
Impairments increased to £66m, up from £31m compared to last year and net fee and commission income declined 17.9 percent to £324.8m.
The group said fees in the Wealth & Investment business declined moderately by 3.5 percent, impacted by the sale of the Irish wealth business in the second half, lower UK funds under management and rand weakness.
Investec reported a credit loss ratio of 0.47 percent.
Titi said the first half was characterised by difficult and volatile market and economic conditions attributed primarily to Covid-19. “As a result, group adjusted operating profit was 48.4 percent behind the prior period and adjusted basic earnings per share was 50 percent behind the prior period, although ahead of pre-close guidance,” he said.
The group expected its adjusted Eps to be between 8.3p and 10.5p as per its trading update released in September.
“We are encouraged by the resilience of our loan book, the performance of our core franchises against a tough backdrop and progress made on our strategic objectives.”
Its net core loans only increased by 0.9 percent to £12bn.
“We entered this crisis from a position of strength and continue to have a strong capital, funding and liquidity position, leaving us well placed, both operationally and financially, to navigate this evolving environment for the benefit of our clients and other stakeholders,” Titi said.
Investec Ltd shares closed 6.06 percent lower at R38.12 on the JSE yesterday.
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