Investec Net Rises 2% as U.K. Business Counters Weakness in South Africa

Investec Plc, the South African private bank and wealth manager, said fiscal first-quarter net income climbed 2 percent as weak equity markets at home and in Australia countered a stronger U.K. performance.

Net operating income rose 11 percent in the three months through June, from a year earlier, the Johannesburg-based bank said in a statement today. Investec will provide further details on its performance on Sept. 16.

“South African and Australian operations were affected by weak equity markets and low levels of economic activity posting results behind the prior year,” Investec said in the statement. “The U.K. business performed well with particularly strong results recorded by the asset management and capital markets divisions.”

South Africa’s fifth-largest bank by assets has traded in London since 2002 and last month completed the purchase of the 53 percent of Rensburg Sheppards Plc it didn’t already own to build its wealth business in the U.K. Increased savings levels in the developed world should continue to “underpin growth” in wealth and asset management, Investec said today.

Investec Plc’s capital adequacy ratio was 16.1 percent on June 30, according to U.K. Financial Services Authority rules, compared with 15.6 percent for Investec Ltd., using South African Reserve Bank regulations.

Impairments remained at “elevated levels,” with a credit- loss charge as a percentage of annualized average gross loans and advances at 0.83 percent during the quarter, the bank said. That was down from 1.16 percent three months earlier.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

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