Investec is rocking

Investec has increased its dividend amid strong results for the full year ended 31 March 2024 (FY24).

“The Group has delivered strong financial performance notwithstanding the uncertain operating environment that prevailed throughout the financial year,” said group CEO Fani Titi.

“This performance demonstrates the continued success in our 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.”

“Our balance sheet remains strong and highly liquid, positioning us well to support our clients in navigating the uncertain macroeconomic backdrop.”

With the average Rand/Pound sterling exchange rate depreciating by 15.1% over the financial year, there was a significant difference in reported and neutral currency performance. The rand had an average exchange rate of 23.54 to the pound over the period, up from 20.45 in FY23.

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).

With headline earnings per share increasing by 22.7% in rand terms to 72.9 pence (R17.16), the group upped its total dividend by roughly 28.07% to 34.5 pence (R8.12) per share.

Despite the overall improvement, the group’s credit loss ratio (CLR) on core loans increased to 28bps.

Although this was still at the bottom end of the group’s through-the-cycle (TTC) range of 25bps to 35bps, it was still higher than the 23bps seen in FY23.

Expected credit loss (ECL) impairment charges decreased in pound terms to £79.1 million (R1.86 billion) from £80.9 million (R1.65 billion) in FY23, but increased from R1.65 billion to R1.86 billion in rand terms

Outlook

“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,” said the group.

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.

“The Group remains well positioned to continue to support its clients amidst the uncertain macro-economic outlook. We have strong capital and liquidity levels to navigate the current environment and pursue our identified growth initiatives in our chosen markets,” said the group.

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