Investec Profit Beats Analyst Estimates as Bad Debts Decline

Investec Plc, the owner of a bank and money manager in Britain and South Africa, posted full-year profit that beat analyst estimates after bad debts fell.

Adjusted earnings per share rose 5.3 percent to 38 pence in the 12 months through March, the Johannesburg- and London-based firm said in a statement today. That beat the 36 pence median estimate of eight analysts surveyed by Bloomberg. Net income rose 7 percent to 331.7 million pounds from a year earlier, the company said.

Investec said it’s considering selling its Kensington mortgage business, which it bought for 283 million pounds ($479 million) in 2007, just before the financial crisis. The company’s U.K. specialist bank boosted operating profit by almost 30 percent after a decline in impairments, it said.

“Specialist banking improved revenues, while asset management was weaker than we expected and wealth management was in line,” Jaap Meijer, head of equity research at Arqaam Capital in Dubai with a hold rating on the stock, said by telephone. “Investec provides more average upside than most South African banks.”

Investec fell 1.2 percent to 508 pence as of 2:43 p.m. in London trading, paring this year’s gain to 16 percent.

Investec is also selling units in Australia, a region which reported a full-year loss, with employees to be reduced to 90 from 500.

“The significant restructuring effort that has taken place over the past year, together with the strategic initiatives currently under way, should enable Investec to benefit from the upturn in global economic conditions and generate appropriate returns,” the company said.

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