South Africa’s most exclusive bank breaking records

Investec will pay a record dividend for the third year in a row after the bank’s operating profit surpassed the £1 billion (R24.1 billion) mark for the first time.

The specialist lender with operations in the UK and South Africa posted a 7.8% increase in “pre-provision” adjusted operating profit to £1.04 billion (R24.1 billion), buoyed by a 5% jump in revenue, it said in a statement on Thursday.

Headline earnings per share retreated marginally to 72.6 pence from 72.9 pence, while return on equity eased to 13.9% from 14.6%, but remained within the bank’s 13%-17% target range, it said.

Investec declared a final dividend of 36.5 pence per share, beating the 35.7 pence-per-share estimate of six analysts surveyed by Bloomberg.

The firm has benefited from growth in lending, along with continued client acquisition, strong net inflows into discretionary and annuity funds under management.

A lower cost of funds in southern Africa helped partly offset the effects of deposit repricing at its UK business.

The bank is planning a R2.5 billion share buyback to optimise capital at its South African businesses over the next 12 months. The lender has spent about £300 million since 2023 on share buybacks.

Deposits climbed 4.1% to £41.2 billion in the period, while the bank’s net interest income rose 1.5% to £1.36 billion, boosted by growth in lending.

Cost-to-income ratio improved to 52.6%, while the bank’s credit loss ratio was 38 basis points, which was within the group’s through-the-cycle range of 25 to 45 basis points.