Investec Wealth and Investment Management has made a recovery from a challenging first financial half, adding £2bn to funds under management (FUM) since 30 September, yet the business is expected to hamper profits in the wider group.
FUM in the UK wealth and investment business climbed back to £61m as of 28 February according to a recent trading update, offsetting some of the damage done during H1, when FUM fell 7.6% to £59bn amid falling markets.
Despite the loss in funds, the wealth arm retained net inflows of nearly £400m across the 11 months, partially offsetting the impact of negative market movements.
The trading update forecast that adjusted operating profit for the UK business, which also includes Investec Specialist Banking, would be at least 15% higher than the £303m in FY2022.
It added that the banking arm’s adjusted profit was expected to be at least 30% more than the £194m recorded in the prior year, implying Investec’s wealth business is expected to contribute negative 15 percentage points to profits in the UK.
The report said the weakening macro backdrop negatively impacted activity levels in equity capital markets.
The firm also provided an update on the progress of the £350m share buyback policy it announced in November.
The company has bought back around 52 million shares, or 5.2% of the outstanding share capital before the November announcement, returning £245m to shareholders in the process.
Shares in Investec plc bounced more than 4.5% since trading opened on 16 March, hitting £4.59 by midday.
The South African half of the business was expected to grow operating profits by 10%.
