In­vestec banks on rand to in­crease earn­ings

The Star Early Edition - - COMPANIES - Re­nee Bonorchis

IN­VESTEC, which owns a bank and money man­ager in South Africa and the UK, said its fis­cal sec­ond-half earn­ings may in­crease from a year ear­lier as the rand be­comes less volatile.

“The rand will have a much lesser im­pact if it holds its lev­els,” Stephen Kos­eff, chief ex­ec­u­tive of the London- and Jo­han­nes­burg-based lender, said in the UK yes­ter­day.

The cur­rency con­strained In­vestec’s fis­cal first-half profit, which after con­ver­sions rose 3.7 per­cent from a year ear­lier to £169 mil­lion (R2.9 bil­lion) in the six months to Septem­ber, the lender said.

In­vestec makes the bulk of its op­er­at­ing profit in South Africa. The rand’s three-month im­plied vo­latil­ity is 11.2 per­cent against the dol­lar, com­pared with 13.2 per­cent a year ago, data show.

“The re­sults would have been even stronger but for the con­tin­ued weak­ness of the rand,” Kos­eff said.

In­vestec’s ad­justed earn­ings per share rose 3.7 per­cent to 19.7 pence and its div­i­dend in­creased 6.3 per­cent to 8.5p a share.

Ex­pan­sion in the as­set man­age­ment, and wealth and in­vest­ment units is “sup­port­ing solid net in­flows” that amounted to a com­bined £4.2bn in the pe­riod un­der re­view, In­vestec said.

“On a con­stant-cur­rency ba­sis In­vestec had a strong first half across all di­vi­sions,” James Hamil­ton, an an­a­lyst at Nu­mis Se­cu­ri­ties in London who rates the share a hold, said in a note to clients.

In­vestec was lit­tle changed at £5.93 as of 9.22pm in London trad­ing.

The bank has been dis­pos­ing of as­sets in Aus­tralia and the UK and said on Septem­ber 9 it was sell­ing its Kens­ing­ton Group mort­gage business for £180m after buy­ing it for £283m in 2007, just be­fore the fi­nan­cial cri­sis.

Bernard Kan­tor, the man­ag­ing di­rec­tor of In­vestec, said: “Our fo­cus re­mains on de­vel­op­ing our high-in­come pri­vate bank­ing business and im­prov­ing struc­tural in­ef­fi­cien­cies, which we be­lieve is key to un­lock­ing fu­ture value in the UK bank.” – Bloomberg

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