The banking group Investec put on a brave face this week by maintaining its dividend for the year to March, despite suffering heavy losses, writes Thebe Mabanga.
At the same time, the group announced that all investment activities in the United States, which it described as “particularly vulnerable to the dramatic decline in the equity markets”, will wind down by the end of May.
During the period under review, Investec said the FTSE All Share Index fell by 32%, while the JSE All Share Index dipped 30%.
Operating profit fell from about R2,04-billion to about R1,09-billion. This was accompanied by a 21,4% decline in headline earnings to R1,2-billion and a 21% fall in headline earnings per share, to R136,71. Dividend was maintained at about R7.
CEO Stephen Kosseff (pictured right) noted that the results reflected “an exceptionally difficult investment environment for all investment banking groups”. He added: “We’ve used the bear market this year to refocus and realign our businesses to return to our core, streamlining and rationalising operations, particularly in the UK and the US.”
Last July the group established a dual listing in London, in a move that Kosseff hailed as a “landmark in Investec’s history”, which gave the firm access to international markets.
The group’s assets fell by 11,8% to about R192-million, while third-party assets under management fell from about R352,1-million to about R326,3-million.
Last week, Investec announced a 25,1% empowerment acquisition by the Tiso Group and Peu investments for R810-million, as well as an entrepreneurial development trust and an employee share scheme. Photograph: Paul Botes
Additional reporting by I-Net Bridge