Strong, well-positioned business model ready to take advantage of an improvement in market conditions
Investec, the international specialist bank and asset manager, announces today its results for the six months ended 30 September 2012
Adjusted earnings increased 3.5% to GBP168.6mn - an increase of 13.6% on a currency neutral basis.
Adjusted earnings are 78% higher than that reported in the second half of the 2012 financial year.
The group's low-capital intensive asset and wealth management businesses continued to benefit from net inflows of GBP2.1bn, with these businesses accounting for 39.3% of the group's operating profit.
Total third party assets under management amount to GBP99.5bn (31 March 2012: GBP96.8bn).
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."
Bernard Kantor, Managing Director of Investec said:
"Global markets remained volatile and challenging throughout most of our reporting period. The rand depreciated 15.2% which impacted our results in sterling terms. On a neutral currency basis our earnings increased 14%. The South African business performed well and increased operating profits by 6.6 % in rands, benefitting from revenue growth and tight cost control. In Australia revenue and costs were in line with the prior year. Our business model has been realigned and we are well positioned to take advantage of a market upturn."
Recurring income as a percentage of total operating income amounts to 69.3% (2011: 67.8%).
Impairments have decreased by 19.3%, with the credit loss charge as a percentage of average gross core loans and advances improving from 1.12% at 31 March 2012 to 0.85%.
The group maintained a strong capital position with Tier one ratios of 11.3% for Investec plc and 11.6% for Investec Limited. Liquidity remains strong with cash and near cash balances amounting to GBP 10.4bn