Although the year has not yet ended, specialist banker Investec has had a good second half so far and is on track to deliver a strong performance for the financial year ended March 31 2005, Investec CEO Stephen Koseff said on Monday.
“We have benefited from our continued strict focus on driving profitable growth in our key business areas and geographies, as we deliver innovative solutions for our clients and respond to their needs at a time of strong fundamentals for our business.
“We have built on our good first-half performance and are seeing the momentum continue in all areas of our business. In addition to this, we continue to make significant progress towards achieving our state of growth and financial return objectives,” Koseff told an investor briefing.
He said operating fundamentals across the group have continued the positive trends seen in the first half and as reported at the interim stage in November last year.
In the second half of the financial year, the group has seen performance in line with its expectations from the Private Client, Treasury and Specialised Finance, and Property Investment Banking divisions, he said. In addition, the group has seen stronger performance from the Investment Banking, Asset Management, Central Funding, and Assurance divisions.
Koseff said the Private Banking operations have continued to perform exceptionally well, driven by healthy growth advances in the United Kingdom and South Africa as well as high levels of transactional activity leading to strong growth in non-interest income. The Private Banking loan portfolio has grown by 29% to £4,2-billion since March 2004.
Referring to the group’s Private Client Portfolio Management and Stockbroking division, Koseff said performance continues to benefit from increased levels of activity while third-party assets under administration, although only up slightly in the UK, are up 48% in South Africa.
Funds under management are up 16% to £9,9-billion since March last year.
Treasury and Specialised Finance’s loan portfolio has grown by 17% to £1,4-billion in the same time.
According to Koseff, the performance reflects the focus on customer flow as opposed to proprietary trading. Lending and advisory activities continue to perform well, he added,
Turning to investment banking, Koseff said direct investments are stronger than the first half of the financial year but still not at the level of the previous year, while Private Equity is performing exceptionally well with some significant realisations.
While the UK has a robust pipeline, the current pipeline in South Africa is stable with improved market volumes. Australia is delivering a solid performance on the agency and advisory side, however, on the back of a continued strong merger and acquisition and initial public offering environment.
Koseff added that a strong asset management performance is being witnessed in South Africa and the UK, with funds under management up by 17% to £24-billion.
“Clearly, this has been a very good year. I think that we have succeeded in building a sustainable business as opposed to a volatile business,” Koseff said.
Added the group’s MD, Bernard Kantor: “We have continued to work hard on building a distinctive sustainable business model.
“We believe that the overall quality of our business has improved significantly over the last few years, and we will continue to concentrate on the fundamentals of growing revenues, improving efficiency and maintaining credit quality in order to deliver value to our shareholders.” — I-Net Bridge