Investec warns on profits as it navigates ‘challenging’ market
Investec has warned of a fall in profit as it navigates “challenging market conditions”, exacerbated by the coronavirus outbreak.
The specialist bank said operating profit for the year to 31 March 2020 is expected to be 7 to 14 per cent behind the previous year, while adjusted earnings per share would be down between 16 and 23 per cent behind 2019’s 60.9p.
Net asset value is expected to be between 425p and 450p and tangible net asset value is expected to be between 385p-405p. Investec said net asset value had been positively impacted by profitability and the demerger and negatively by the depreciation of the Rand.
Operating costs across the group are expected to reduce from the £1.67bn in 2019.
Investec’s asset management arm Ninety One completed its demerger and listing which it said increased capital levels and reduced risk. The group said it had decided not to proceed with the sell down of a 10 per cent stake in Ninety One given market volatility and its “already comfortable capital position.”
Earlier this month, Ninety One said it would push ahead with its float despite a sell-off that sent global stocks down 10 per cent.
Chief executive Fani Titi said: “Investec has delivered a resilient performance in challenging market conditions. We have also made notable progress in the simplification of the business and have continued to invest in our platforms to achieve sustainable growth for the long term.”
“In these current difficult times, we remain resolutely focused on the safety of our people, integrity of our balance sheet and supporting our clients and optimistic about our longer-term potential.”