Investec profits up as bad debts melt away in Britain’s recovery
BRITISH and South African bank Investec expects operating profits to leap 28 per cent this financial year, as the recovery takes hold.
The specialist lender’s revenues will rise by around 15 per cent when it unveils its results in May, while impairments will drop by around 35 per cent.
The fall in bad loans means the credit loss ratio on total average core loans will fall to 0.7 per cent, down from 0.84 per cent reported in March 2013.
However, the 20 per cent depreciation of the rand relative to the bank’s reporting currency of sterling means the reported profits will be slowed down.
Investec predicts earnings per share will rise by 22 per cent to 27 per cent on the year on a rand basis, but in sterling the earnings will be weaker, rising by below seven per cent.
The bank’s London-listed share price closed up 0.3 per cent on the day yesterday.