Investec is looking to build on the momentum achieved in the second half of the 2021 financial year, after it was hurt by the Covid-19 disruption in the first half in the year to end March.
The financial services group reported a 14.7 percent decline in adjusted earnings per share from continuing operations to 28.9 pence a share, with second half earnings outperforming the first half by 58.1 percent.
The group said it expected financial year 2022 adjusted earnings per share to improve from the reported 28.9p to between 36p and 41p.
Chief executive Fani Titi said the 2021 financial year was a tale of two halves.
“The first half performance was characterised by difficult and volatile market and economic conditions attributable primarily to Covid-19. The second half showed strong earnings recovery, supported by our resilient client base, a rebound in economic activity and a greater sense of optimism spurred on by global vaccination campaigns,” Titi said.
Its wealth and investment business reported a 30.4 percent increase in funds under management (FUM) to £58 billion (R1.24 trillion), reflecting market recovery, good investment performance and continued net inflows of £1.1bn.
However, its adjusted operating profit fell by 9.9 percent to £377.6 million and total operating income before impairments declined by 9.2 percent to £1.64bn as the positive impact of higher average interest earning assets, growth in FUM and the first-time inclusion of the equity accounted earnings of the group’s share of Ninety One was negatively impacted by lower interest rates, reduced client activity and elevated risk management and risk reduction costs related to its UK structured products book.
Tangible net asset value per share increased by 12.7 percent to 425.7p and the group declared a final dividend of 7.5p, bringing the full year dividend to 13p.
Titi said the group was delighted to report record funds under management and operating profit in their wealth businesses.
“The South African Specialist Bank produced an excellent performance in a difficult environment by reporting flat profits in rands. This performance highlights the quality of our client franchises and our commitment to outstanding client service,” he said.
The UK Specialist Bank client franchises performed strongly showing continued traction in their client acquisition strategy across the business, by reporting loan book growth of 8.7 percent.
“The investment in our UK Private Banking business is bearing fruit and performing ahead of expectations,” Titi said.
Looking ahead, Investec said it remained encouraged by the momentum they were seeing across the business.
“The short-term outlook is dependent on progress in containing the pandemic and the extent of economic recovery in the geographies in which we operate,” the group sai
The share price slipped 0.61 percent on Friday to close at R57.15.