Investec cools on acquisitions as profit drops
INVESTEC is not interested in any more acquisitions for now, managing director Bernard Kantor told City A.M. yesterday, after unveiling what he called “disappointing” results for the last year.
The results were hit by higher-than-expected impairments in Australia due to flooding in Queensland, Kantor said. “You can’t be happy with these results, that’s clear,” he said. “But we’re very confident about the future.”
Operating profit for the year to March fell by 17.4 per cent to £358.6m. But the bank is successfully growing its wealth management business: assets under management rose 8.9 per cent to £96.8bn, partly fuelled by its acquisition of Evolution Group, which owned wealth manager Williams de Broe.
Unlike other banks, Investec is struggling with a £10bn excess of deposits that it would like to put to use, giving a loan-to-deposit ratio of 70 per cent that Kantor said he would prefer to be 85-90 per cent. But he added that in current markets, he would rather have too much than too little liquidity.
Asked if the bank is interested in further acquisitions, Kantor said: “We need to grow organically now and integrate the businesses.”