LONDON - Investec (LON:INVP) Bank PLC announced an increase in adjusted operating profit for the six months ending September 30, 2024, attributing the growth to balance sheet expansion, a strong client base, and the current high-interest rate environment. The bank, a subsidiary of Investec plc and listed on the London Stock Exchange (LON:LSEG), saw its adjusted operating profit rise by 7.2% to £241.5 million from £225.2 million in the comparable period last year.
The bank's revenue benefited from the elevated interest rate environment and growth in client franchises. The cost to income ratio showed improvement, coming in at 49.7% compared to 54.0% in the previous year. Net core loans saw an annualized increase of 2.3%, reaching £16.7 billion, while customer deposits grew by 8.8% to £21.8 billion.
Investec's credit loss ratio on gross core loans was reported at 67 basis points, consistent with the guidance provided by the Investec Group in September 2024. The bank's overall credit quality remained stable with no significant deterioration in trends observed.
Capital ratios for the bank have remained sound, with a total capital ratio of 19.9%, a common equity tier 1 ratio of 13.5%, and a leverage ratio of 10.4%. Additionally, Investec owns a 41.25% economic interest in Rathbones Group Plc, which reported Funds Under Management and Administration (FUMA) of £108.8 billion as of September 30, 2024.
In the Specialist Banking unit, pre-provision adjusted operating profit decreased slightly by 1.0% to £260.0 million. The bank's lending growth was driven by a 6.9% annualized increase in the UK residential mortgage lending book, while corporate lending remained flat in a constrained market environment.
Investec's Wealth & Investment UK unit, which had been combined with Rathbones, is now presented as a discontinued operation. The bank's share of Rathbones' operating earnings is recognized as post-taxation income from associates in continuing operations.
Looking ahead, Investec Bank anticipates revenue momentum to continue in the second half of the financial year, supported by average book growth, stronger client activity levels, and successful client acquisition strategies. The bank maintains strong capital and liquidity levels and is well-positioned to support clients and pursue disciplined growth in an improving economic environment.
This financial update is based on a press release statement issued by Investec Bank PLC.
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