The Group has maintained strong capital and liquidity levels. Image: Bloomberg

Investec posts record interim dividend as profits climb

The lender declared an interim dividend of 16.5 pence per share.

by · Moneyweb

Investec will pay its highest interim dividend on record, after the bank’s profit advanced during the six months to September 30.

The specialist lender with operations in the UK and South Africa posted a 7.6% jump in adjusted operating profit to £475 million ($600 million). Headline earnings per share dropped marginally to 36.6 pence, while return on equity also retreated to 13.9%, but remained within the bank’s 13%-17% target range, it said Thursday.

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The dip in EPS came after an increase in the average equity base resulting from the net gain recognised on completion of a deal between its UK wealth unit and Rathbones at the end of the prior period.

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The lender declared an interim dividend of 16.5 pence per share.

‘Strong capital’

“The Group has maintained strong capital and liquidity levels, positioning us well to support our clients and pursue disciplined growth in an improving operating environment,” Chief Executive Fani Titi said in a statement.

Investec shares erased earlier gains, dropping as much as 0.3% by 9:20 a.m. in Johannesburg.

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The company has benefited from growth in lending, and as higher average interest rates offset the effects of deposit repricing in the UK. Meanwhile continued growth in customer numbers, and higher activity levels lifted the lender’s non-interest revenue.

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Deposits climbed to £40.4 billion pounds in the period, helping cut the cost of funds, while the bank’s net interest income rose 2% to £684.4 million.

As a result, the bank’s cost-to-income ratio has improved to 50.8%, while the bank’s credit loss ratio was 42 basis points, near the top of the group’s through-the-cycle range of 25 to 45 basis points.

Read the Sens here.

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