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Thursday, 23 May 2024 17:18

Investec delivers robust profit growth in the year end-March 2024.

By Lehlohonolo Lehana.

South African lender Investec has increased its dividend amid strong results for the full year ended 31 March 2024 (FY24), the group said on Thursday.

Investec ascribed its financial performance to the continued success of its client acquisition strategies, which underpinned the increased client activity and loan book growth, which was supported by the tailwind from the high interest rate environment.

Overall, the group's revenue increased by 20.9% in rand terms from £1.99 billion (R40 billion at current exchange rates) to £2.09 billion (R49 billion).

Headline earnings per share was 9.1% higher at 72.9p compared to the corresponding period of 2023.

The bank, which is dual listed on the London and Johannesburg stock exchanges and operates in South Africa and the UK, announced a final dividend of 19.0p per share — up from 17.5p in 2023 — resulting in a final dividend of 34.5p per share for the year.

Net asset value per share grew 11% to 563.9p as at March 31 from 507.3p at March 31, 2023.

"This performance demonstrates the continued success in our client acquisition strategies which underpinned the increased client activity and loan book growth, supported by the tailwind from the high interest-rate environment," Fani Titi, group chief executive, said. 

The cost-to-income ratio improved to 53.8%, compared to 54.7% in the corresponding period of 2023.

Total operating costs increased by 3.2%, while the credit loss ratio (CLR) on core loans was 28bps, compared to 23bps in the previous reporting period.

For the year ended 31 March, it posted a 5.5% increase in funds under management in Southern Africa, driven by discretionary inflows of R16.6 billion.

Investec Wealth & Investment UK FUM are now part of the Rathbones Group, following the completion of the acquisition in September 2023.

One of Investec's strategic actions in the past year was combining Investec Wealth and Investment UK with the Rathbones Group.

Investec owns a 41.25% stake in Rathbones.

Revenue momentum is expected to continue, underpinned by book growth, stronger client activity levels and success in our client acquisition strategies, partly offset by expected cuts in interest rates, "added Titi.

The group expects its credit loss ratio to be within the through-the-cycle range of 25bps to 45bps.

Southern Africa is expected to be close to the lower end of the TTC range of 15bps to 35bps, while the UK and Other credit loss ratio is expected to remain elevated between 50bps and 60bps in the short term.