Bank of America<\/a> is to be believed.<\/p>\n\n\n\nBank of America, the world’s second-largest bank by market cap, recently reiterated its buy rating on the stock.<\/p>\n\n\n\n
Investec generated a return on equity of 13.9% in FY25, a decrease from the 14.6% seen a year prior.<\/p>\n\n\n\n
However, Merrill Lynch, a division of Bank of America, said that Investec is undervalued compared to its circa 15% ROE potential over the next three years.<\/p>\n\n\n\n
Merrill Lynch analyst Harry Botha pointed out that Investec is well capitalised, with excess capital in South Africa and the UK.<\/p>\n\n\n\n
Merrill Lynch, a division of Bank of America, said that Investec is undervalued compared to its circa 15% ROE potential over the next three years.<\/p>\n\n\n\n
Although margin compression from interest rate normalisation in the UK may occur, Investec is well placed to grow its private client and mid-market Corporate and Investment Banking operations.<\/p>\n\n\n\n
Lower interest rates in South Africa and the UK should also support lending growth in both markets of 12% and 7-9%, respectively, from 2026 to 2028, offsetting lower net interest margins from lower rates.<\/p>\n\n\n\n
The world’s second-largest bank also expects above-consensus increases in net interest revenue in both regions in 2026-27 as client activity levels increase amid higher economic growth. <\/p>\n\n\n\n
The group can also expect expansion into new products, such as UK Private Banking, which could add roughly \u00a3750 million to revenue by 2030.<\/p>\n\n\n\n
It can also use its 10% stake in Ninety One, the nation’s largest asset manager, to support acquisitions, growth or improve shareholder returns.<\/p>\n","protected":false},"excerpt":{"rendered":"
Investec CEO Fani Titi’s total pay has taken a steep cut over the past year, but he still out-earns most of his banking peers.<\/p>\n","protected":false},"author":95,"featured_media":820716,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[5349,1498,14271,19703],"class_list":["post-829890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-bank-of-america","tag-investec","tag-merrill-lynch","tag-ninety-one-2"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=829890"}],"version-history":[{"count":13,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829890\/revisions"}],"predecessor-version":[{"id":829939,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/829890\/revisions\/829939"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/820716"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=829890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=829890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=829890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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