Investec rolls out £350m share buyback as revenues jump

Banking and wealth management group Investec announced it would buy back up to R$7bn (£350m) shares and hike its dividend payout today as it reported an 18.9 per cent boost in revenues in the first half of the year. 

Bosses said they continue to “successfully navigate” uncertainty in the macroeconomic backdrop, as revenues at the investor jumped 18.9 per cent, as rising interest rates helped push up takings across its loan book.

“We have made good progress on our capital optimisation strategy as we seek to return excess capital from the South African balance sheet to shareholders,” Fani Titi, group chief executive.

“Today, we announce our intention to purchase and buy back up to R7 billion of our shares. I am also pleased that the Board has proposed an interim dividend of 13.5p per share, a 22.7 per cent increase on the prior period.”

The firm said it had suffered a slide in its assets under management however, as turmoil in the markets in the first half of the year rocked its investment portfolio.

Funds under management at the South African London-listed firm fell 7.6 per cent to 359bn, which the firm said reflected the “year to date decline in global markets”, despite investors adding £202m to its funds in the period.

“We have strong liquidity and capital levels and are well positioned to support all our stakeholders, including our clients, our people, and communities around us,” Titi added.

The firm’s core loan book grew 7.1 per cent annualised to £31bn, up from £29.9bn, as corporate lending in its core geographies and UK residential mortgage lending jumped.

Bosses told reporters on a call that market turmoil in the markets would be most pronounced in the UK as interest rate are hiked fast to try and tame rampant inflation.

“​​Clearly in the UK, the increases in interest rates come from a very low base. So the impact will be much more pronounced,” Titi said.

“There is also a cost of living crisis. And as you know, there is also a fiscal problem in the UK given the short lived government of Liz Truss.”