Profits dropped 5.8 per cent, coming in at £168.5m in the six-month period, down from £178.9m in the same period of last year.
Interest income dropped 4.74 per cent to £1.13bn, while investment income plunged 10.88 per cent to £75.8m.
But the joint UK-South African listed firm recorded a 19.3 per cent drop in loan impairments from £143.3m to £115.6m and a 5.3 per cent rise in fee and commission income.
Given the poor economic environment the group is looking to focus more on its profitable asset management business, as part of a strategic shift into low-capital intensive activities.
Analysts noted the bank has excess liquidity, which could be a drag in future.
“The problem with liquidity is you are damned if you do and damned if you don’t,” managing director Bernard Kantor told City A.M.
“Now we probably have too much. Our book is entirely funded by retail deposits, not wholesale, and we will cut back on some of the rates we pay – our £5bn surplus liquidity costs £60m to £80m a year to run.”
Return on equity rose from 8.1 per cent to 10.2 per cent, and Kantor hopes that a stabilisation of market conditions will allow Investec to raise that to above 12 per cent in the next year to 18 months.