The profit slide at specialist bank and wealth manager Investec isn't as grim as it seems. Adjust for last year's £73.5m accounting-related gain, from buying the portion of Rensburg Sheppards not already owned, and group operating profit was roughly flat.
Still, and even though the capital markets unit saw profits rise by 16.6 per cent to £155.6m, Investec is feeling the impact of market volatility. Profits at the investment banking operation slumped 91 per cent from £42.5m to £3.7m as sliding equity markets struck the listed investment portfolio. And losses in the private banking arm widened by £1m to £4.9m, reflecting its troubled property portfolio – now in rundown.
However, asset management profits soared a third to £65.6m, helped by a £3.6bn year-on-year rise in funds under management (FUM) to £53.1bn, although that's still down on the £58.8bn figure reported at the March year-end – again, reflecting market volatility. Similarly, the wealth and investment unit's FUM slipped £3.1bn to £26.3bn since the March year-end. Net fee and commission income, however, rose 30 per cent to £445m, reflecting the performance of the capital markets division in South Africa and higher average FUM.
Numis Securities expects adjusted full-year EPS of 40.1p (42.3p for 2011).
INVESTEC (INVP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 353p | MARKET VALUE: | £2.8bn | |
| TOUCH: | 353-354p | 12-MONTH HIGH: | 539p | LOW: 329p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 442p* | |||
| Half-year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2010 | 278 | 29.7 | 8.00 |
| 2011 | 214 | 19.2 | 8.00 |
| % change | -23 | -35 | – |
Ex-div: 7 Dec Payment: 20 Dec *Includes intangible assets of £585m, or 74p a share | |||
