Investec says it is well placed to support clients
Financial services firm Investec said on Thursday it has strong liquidity and capital to support its clients, but warned that lending will be muted, impairments will rise and interest income will be hit by the coronavirus crisis.
Investec, which has struggled in recent years with tough market conditions, reported a 16.8% drop its full-year profit as a result of the coronavirus crisis.
It had said in March that the coronavirus pandemic would dent its fourth quarter performance, highlighting the impact on areas including its lending, and forecasting a decline of 16-23% for the financial year as a whole.
The year ahead will be challenging. And [the] impact of Covid-19 will be protracted
“The year ahead will be challenging. And [the] impact of Covid-19 will be protracted,” Fani Titi, Investec's chief executive said during a media call after its results.
Investec's group adjusted operating profit for the year ended March 2020 was 608.9 million pounds (about R13.5bn), a drop of 16.8% from a year earlier when it was 731.9 million pounds (R16.2bn).
Investec said its adjusted earnings per share, which reflect profits made in the course of ordinary operations, were 46.5 cents in the year, versus 60.09 cents a year earlier.
It attributed the fall to a weak economic environment in its two operating countries, South Africa and Britain, which was further exacerbated by the impact of the coronavirus crisis.
Investec had been hit by lacklustre growth in South Africa, which tipped into recession in the final quarter of 2019, and Britain's departure from the European Union, with its specialist UK banking arm in particular struggling.
It said the coronavirus outbreak had an impact of 105 million pounds (R 2.3bn) on its adjusted operating profit. — Reuters