Investec Readies for Life After CEO Koseff as Profit Rises

(Bloomberg) -- Investec Plc Chief Executive Officer Stephen Koseff, who is stepping down in October after 40 years of helping build the bank and money manager, delivered his final set of full-year results on Thursday with profit numbers that fell just shy of estimates.

Adjusted earnings per share for the 12 months through March rose 10 percent to 53.2 pence from a year ago, the London and Johannesburg-based lender said in a statement on Thursday. That compares with the 53.9 pence average estimate of four analysts surveyed by Bloomberg.

Investec Readies for Life After CEO Koseff as Profit Rises

Koseff, 66, and Managing Director Bernard Kantor, 68, said in February they would relinquish their roles this year. They’re handing over to Hendrik du Toit, the founding CEO of Investec Asset Management, who will oversee the business from the U.K., and Fani Titi, who will step down as Investec’s chairman to take the helm from the South African side.

“We are handing over a business that is well placed to continue to grow both its market position and profitability,” Koseff said at a presentation, after which he received a standing ovation from the audience, including members of his family.

Economic Uplift

While the complexities of Britain’s exit from the European Union continue to cause uncertainty in the U.K. economy, the final quarter of Investec’s fiscal year “started to see an uplift in the South African economic outlook,” the company said in a statement.

Investec fell as much as 5.1 percent before paring losses to trade less than 0.3 percent down at 567.4 pence as of 2:10 p.m. in London. The six-member FTSE/JSE Africa Banks Index dropped 2.2 percent.

Investors could initially have reacted negatively to guidance on capital adequacy levels in Investec’s annual earnings, because this hadn’t been communicated to the market previously, said Harry Botha, an analyst at Avior Capital Markets in Cape Town.

The transition to IFRS 9 accounting rules shaved almost 50 basis points off Investec’s Common Equity Tier 1 capital ratio for its U.K. operation, taking it down to 10.5 percent from April 1, while the metric declined 20 basis points to 10 percent at the South African unit, it said, adding both are in excess of regulatory minimums. The lender in November said it expects most of its financial assets to be largely unchanged once the rules are applied.

(An earlier version of this story corrected the measure of profit used in the headline, first and second paragraphs to match what was used in analyst estimates.)

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