Investec set for profit boost despite challenges in the UK

Investec delivered an upbeat trading update for the first half, with profit on track to increase compared to last year despite challenges in the UK.

The bank expects adjusted operating pretax profit in the six months to September to be between £450m and £482m, up from £441m in the same period last year.

Headline earnings per share could be anywhere from 1.4 per cent below last year’s 36.9p to 3.5 per cent ahead. This includes the costs of “executing strategic actions”.

Investec said revenue had been boosted by growth in lending as well as the impact of higher interest rates. This was only partially offset by having to pay depositors in the UK more in savings rates.

The firm’s non-interest revenue also grew which Investec said pointed to the “diversified nature” of the business model. “Continued client acquisition and higher activity levels underpinned non-interest revenue growth,” Investec said.

Breaking it down by geography showed that Investec’s South African business was doing a lot of the heavy lifting. Adjusted profit in the South African business is likely to be at least 15 per cent ahead of the prior period, it said.

However, in the UK, adjusted profit is expected to be at least five per cent behind the same period last year.

Investec expects to report a credit loss ratio above its guided range in the UK, which it said was driven by “certain specific impairments“.

Across the business as a whole, the credit loss ratio will be at the upper end of the through-the-cycle range, although Investec stressed “overall credit quality remained strong”.

“The Group maintained strong capital and liquidity levels and is well positioned to continue supporting our clients and build to scale our identified growth opportunities, in an improving economic environment,” it said.

Investec said it was trading in line with expectations for its 2025 financial results.