Investec has warned its profits will slip by up to 14 per cent for the 12 months to March due to the spreading coronavirus crisis.
In a pre-close trading statement, published today (March 20), Investec warned its adjusted operating profit would be between 7 and 14 per cent lower while adjusted earnings per share would fall by up to 23 per cent.
Profit for its bank and wealth arm was also expected to be 16 to 22 per cent behind the previous year.
Investec said the declines were primarily down to “challenging market conditions”, noting these had been exacerbated by the ongoing public health and economic effects of Covid-19.
It reported the operating environment in the second half of the 12 months to March was difficult in both South Africa and the UK, adding the effects of coronavirus were expected to dent Investec’s operating performance.
Fani Titi, chief executive of Investec, said: "Investec has delivered a resilient performance in challenging market conditions. We have also made notable progress in the simplification of the business and have continued to invest in our platforms to achieve sustainable growth for the long term.
“In these current difficult times, we are resolutely focused on the safety of our people, the integrity of our balance sheet and supporting our clients. We remain optimistic about our longer-term potential."
Highlights of the year included progress in the group’s strategy to “simplify and focus the business”, Investec reported.
This week Investec completed the spin-off of its UK asset management business, named Ninety One after the year it was founded, and it became separately listed on the London Stock Exchange.
But Investec itself still operates its UK wealth management, private banking and mortgage lending arms.
It decided to scrap plans to sell a 10 per cent stake in Ninety One as part of the floatation, due to the growing economic crisis.
However the chief executive of Ninety One, Hendrik du Toit, said it was focusing on growth despite the financial shocks to markets.
Mr du Toit said: “Current times provide opportunity for growth because those who navigate this volatility better than others tend to be rewarded — and we intend to do this.
“It’s all about remaining focused on the job at hand and looking to service your clients.”
The spreading coronavirus crisis has also caused global markets to tumble as governments across the world shut borders, locked down domestic travel and closed sports and leisure facilities.
Since February 24 the FTSE 100 has fallen by 26 per cent while the S&P 500 has dropped by 21 per cent over the same period. The Euro Stoxx 50 is down 30 per cent.
Volatile market conditions have seen indices suffer their biggest daily dives in more than 30 years this month.
imogen.tew@ft.com
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