Investec warned of lower profits in the six months ending Sept. 30, compared to the prior-year period, due to challenging market conditions.
In a Sept. 20 trading update, the group said it expects headline earnings per share to be lower by about 15% to 18% over the period. Adjusted operating profit in the group's bank and wealth business is expected to fall, with the U.K. specialist banking division's profit "significantly behind" the prior year amid market variability and persistent uncertainty related to Brexit and global trade wars, which have negatively impacted investment banking fees and trading income.
Investec, which comprises London-listed Investec PLC and Johannesburg-listed Investec Ltd., is making efforts to simplify its business, including the closure of the group's Click & Invest operations and changes in its Irish business model as a result of the U.K.'s impending exit from the EU, and as part of consolidation taking place in wealth management in Ireland.
The group also said it is on track with its proposed demerger and separate listing of unit Investec Asset Management Ltd., which got regulatory approval in August and is expected to complete in the first quarter of 2020.
Investec added that it anticipates its first-half pretax earnings to take a £42 million hit as a result of costs related to its planned demerger and restructuring.
"In spite of challenging trading conditions, the group remains well positioned for the long term and continues to concentrate on the execution of its strategy of simplification, focus, and disciplined growth," the group said.
Investec is set to release its interim financial results Nov. 21.
