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Investec wealth assets up £8bn after Evolution acquisition

Profits dip in wealth and investment division as restructuring and unit sales costs take toll.

By Ashley Wassall | Published May 17, 2012 | comments

Banking group Investec has announced that third party assets under management in its UK businesses rose by close to £8bn over the past year, driven in large part by the acquisition of Evolution plc in December.

Investec’s total third party assets under management rose by £7.9bn from £88.9bn to £96.8bn between March 2011 and March 2012, with £7bn of this rise attributable to the integration of the Evolution businesses, which included wealth management group Williams de Broë.

However, despite the surge in assets profits in the wealth division dipped 4.2 per cent over the 12 month period from £40.4m to £38.7m, which the company said was primarily due to costs associated with restructuring and sales of “certain of the operations in the UK and Europe”.

Investec said its asset management division conversely saw operating profit increase 5 per cent to £133.7m. The unit recorded net inflows of £5.2bn over the period, helping to boost funds under management from £58.8bn in 2011 to £61.5bn.

Overall the bank recorded a drop in profit of more than 17 per cent from £434.4m to £358.6m, which much of this decline resulting from a sharp fall in investment income of 31.6 per cent to £174.3m.

Stephen Koseff, chief executive, said: “These results are disappointing but reflective of very challenging market conditions.

“Asset Management continued its strong momentum. Net interest and net fee and commission income has increased across all businesses and geographies.

“Our main businesses have continued to deliver with the overall picture being masked by legacy issues and a weaker performance from our investment activities.

“Our competitive position is strong and our platforms in place. We are well positioned to benefit from an economic recovery and the continued realignment of the global financial landscape”

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