Specialist banking group Investec said on Thursday that it is on track to deliver a strong performance for the current financial year.
Investec group CEO Stephen Koseff told an investor briefing that operating fundamentals across the dual-listed group have continued the trends seen in the first half and as reported at the interim results announcement on November 16 last year.
“Although the year has not yet ended, we have had a good second half so far and are on track to deliver a strong performance for the financial year. We have seen the momentum continue in the majority of our businesses and are well placed to once again deliver on our financial targets and objectives.
“Whilst financial market conditions remain volatile, we are continuing to benefit from increased brand recognition and penetration in our core activities and geographies,” Koseff said.
Bernard Kantor, group MD, added: “We continue to work hard on building a distinctive sustainable business model. Our strategy to increase the scale in our United Kingdom and Australian operations continues to support the operational performance of the group. We are delighted with the quality of our business flows and we remain committed to delivering value for all our stakeholders.”
Koseff said that, as outlined previously, the group’s strategy of maintaining a balanced business model remains an important focus, particularly in the context of a more volatile operating environment.
“In this regard, our advances and third-party assets under management (as reported in domestic currencies) have continued to grow over the reporting period, the result of which is we have experienced strong growth in net interest income, fees and commissions. Contributions are well spread across our core activities and geographies.”
Koseff said Private Banking has recorded a strong performance across all geographies, with South Africa and Australia doing particularly well in the second half of the year. The UK has had a very strong year-on-year performance, although the second half will be marginally weaker than the first half of the year, he said.
“We’re witnessing continued penetration in all areas of specialisation and good momentum in lending turnover and transactional activity. Wealth management is also gaining momentum.”
Actual loan-portfolio growth since March last year to February 28 this year showed an increase of 7,9% to £6,6-billion. Neutral-currency loan-portfolio growth in the same period reflected an increase of 28,1% to £7,9-billion.
Private Client Portfolio Management and Stockbroking have experienced increased volatility, but are benefiting from higher asset levels and volumes. Actual funds under management growth have decreased by 2,6% to £20,4-billion, but neutral currency funds under management growth are up by 8,4% to £22,7-billion.
Turning to Treasury and Specialised Finance, Koseff said that the pipeline and levels of activity have been high across the advisory, lending and debt capital market areas, and that the division is benefiting from the integration of the NM Rothschild and Sons (Australia) business acquired in Australia and strong activity in the UK.
Actual loan-portfolio growth since March 31 last year to February 28 this year showed an increase of 10,6% to £3,3-billion, while neutral-currency loan-portfolio growth showed an increase of 26,6% to £3,8-billion.
Investment Banking and Asset Management have also reported good performances, with the latter’s earnings growth continuing to be enhanced by the momentum of the UK and international business. Actual growth of assets under management since March 31 2006 to February 28 2007 showed a decrease of 7,1% to £29,4-billion, while neutral-currency assets under management growth showed an increase of 9,9% to £34,8-billion.
On the group’s property activities, Koseff said that property fundamentals in South Africa remain strong and that a few realisations were concluded in the current period, resulting in a much stronger second-half performance.
Actual assets under administration growth since March 31 2006 to February 28 this year showed a decrease of 6,9% to £1,7-billion, while neutral-currency assets under administration growth reflected an increase of 23,3% to £2,3-billion. — I-Net Bridge