SOUTH African bank Investec said yesterday it expects to post a slight increase in profits for the current financial year due to a strong performance from its UK, European and Australian arms, adding that the pace of rising defaults has started to slow.
In a pre-close briefing ahead of its year-end at the end of March, Investec said operating profits at its international operations were “well ahead” of the prior year, but that this would be offset by a weaker performance in its native South Africa.
The bank added that defaults continue to rise, though at a steadier rate.
Investec received a boost from its asset management arm, which saw assets under management surge 50 per cent over the year to £43.4bn, a record level for the business.
Funds under management at its private client business rose 33 per cent to £21.6bn, including a £12.3bn contribution from its London-based Rensburg Sheppards arm, while the private banking division saw deposits jump 42 per cent to £11bn.
But that was offset by impairments and lower activity in Investec’s capital markets division due to low interest rates and declining market volatility.
“Things are clearly looking up,” said managing director Bernard Kantor, “but I don’t predict any fireworks – the economy will probably just cruise along for the next 18 months or so.”