INVESTEC SHAREHOLDERS CAN EXPECT A WINDFALL

INVESTEC could soon have a cash pile to give to shareholders. The bank, with offices in Johannesburg and London, is readying a spin-off of its asset-management business in March and also plans to sell some private-equity investments. The lender wants to reduce its R25 billion of private-equity holdings to R15bn, Richard Wainwright, the chief executive of Investec’s South African bank, said in an interview at the lender’s local headquarters. “If we are successful in releasing the capital, it’s probably unlikely that we could grow into it,” he said. “There’s a very real opportunity for us to give it back to shareholders.” The exact “capital relief” Investec can expect from hiving off its asset-management unit, which oversees about $160bn (R2.33 trillion), will depend on how much of a stake it retains. The separate listing of the division, scheduled for March 13, will leave Investec with a private bank, a wealth manager, a unit providing business-banking services, and an investment-banking division. Like all South African business sectors, the financial industry faces the challenge of a reduction in economic growth to a forecast

1.2 percent this year, a continuation of the longest downward cycle since 1945. This means that selling the private-equity investments “in this market is tough”, Wainwright said. “In the medium term, we will reallocate capital away from that investment portfolio and into our franchise businesses as they grow.” | Bloomberg