By Liesl Peyper.
Investec CEO Fani Titi said the group remains confident that its provisions on book for the UK motor finance probe are appropriate.
Titi made the comments during a pre-close media call on the group’s trading update for the five months ended 31 August 2025.
Last year, the lender, which has a dual listing in South Africa and the UK, set aside R720 million to pay possible compensation in light of the ongoing investigation into lending practices in the UK.
Vehicle finance probe
Asked to comment on the recent UK Supreme Court ruling – that banks should only pay compensation to claimants in the most serious cases – Titi said there was a “great degree of balance” in the judgment.
The UK’s Financial Conduct Authority previously indicated that compensation payouts as part of a redress scheme could amount to between £9 billion (R211 billion) and £18 billion (R422 billion). An announcement on the redress scheme is expected in October.
FirstRand announced on 11 September at its annual results posting that it had made a provision of R2.96 billion, in addition to the R3.3 billion allocated in 2024, as a possible compensation payout.
Titi said on Friday that Investec does not understand the basis of the FCA’s estimation for the payouts of up to £18 billion and therefore looks forward to more clarity on the matter.
Trading update
For the six months ended 30 September, Investec expects headline earnings per share to be between 4% lower and 4% higher than the corresponding period in 2024.
Pre-provision adjusted operating profit is forecast to be between £509.4 million (R11.9 billion) and £540.3 million (R12.6 billion) – 6% lower or flat compared to the prior year.
Group ROE is expected to be between 13% and 14%, within its medium-term target range of 13% to 17%.
Investec’s credit loss ratio is expected to be within the group’s through-the-cycle range of 25 to 45 basis points, with overall strong credit quality.
Titi said the results for the first half of 2026 are expected to be in line with the same period last year. He acknowledged that the market, particularly in the UK, had been challenging, with lower interest rates and insufficient compensating activity for the easing of rates.
He stressed that the group has robust capital and liquidity levels to manage the impact of external challenges.
Investec will announce its interim results on Thursday, 20 November.