Investec warns on interim profits as Brexit worries, costs take toll
By Frank Prenesti
Date: Friday 20 Sep 2019
(Sharecast News) - Asset manager Investec warned on interim profits as Brexit, trade wars and a company restructure were all forecast to hit earnings.
The company on Friday said headline earnings per share were expected to be 15% -18% lower year on year, with pre-tax profits taking a £42m hit.
Investec said "challenging" market conditions would see profits at its UK banking business would be "significantly lower" as the Brexit impasse and global trade impacted fees and trading income.
The company added that the UK banking business had also been forced to hold extra liquidity related to Irish deposits in another burden imposed by Brexit.
Group results were also negatively impacted by the depreciation of the average rand/sterling exchange rate of around 2.8% over the period
Investec is currently trying to streamline its operations and plans to demerge its asset management business and list it separately in London.
ahead of Britain's impending exit from the European Union.
"Market variability and persistent uncertainty relating to Brexit and global trade wars, has negatively impacted investment banking fees and trading income," Investec said as it warned that its UK specialist banking unit's profit would be "significantly" behind.
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