Investec Full-Year Profit Jumps 15% to Beat Analyst Estimates

(Bloomberg) -- Investec Plc, owner of a bank and money manager in South Africa and the U.K., posted full-year earnings that beat analyst estimates as assets under management and lending jumped.

Net income for the 12 months ended March 31 climbed to 487.1 million pounds ($630.9 million) from 423.1 million pounds a year earlier, the London and Johannesburg-based lender said in a statement on Thursday. Adjusted earnings per share increased 11 percent to 54.1 pence, compared with the 45.8 pence median estimate of eight analysts surveyed by Bloomberg.

Investec, which also has operations in Australia, makes most of its operating profit in South Africa, where the rand has risen 26 percent against the pound over the course of its fiscal year. The South African economy is forecast to grow in 2017 at about double last year’s pace, yet still remains sluggish after two ratings companies cut the country’s debt to junk status.

“Strong, sustainable levels of corporate and private-client activity are reaping rewards for the specialist bank, while both asset management and wealth and investment are benefiting from higher funds under management,” Managing Director Bernard Kantor said in the statement. Revenue broke through 2 billion pounds for the first time.

Third-party assets under management increased 24 percent to 150.7 billion pounds, while loans increased 27 percent to 22.2 billion pounds, the lender said. Investec’s credit-loss charge as a percentage of average gross core loans and advances deteriorated to 0.29 percent from 0.26 percent as impairments increased by 15.8 million pounds to 57.1 million pounds.

To contact the reporter on this story: Colin McClelland in Johannesburg at cmcclelland1@bloomberg.net.

To contact the editors responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Vernon Wessels, Andrew Blackman