Research archive for INP

Investec is in the process of spinning off its London-based asset management business, which has GBP 121 billion in assets under management. That operation was founded in South Africa by Hendrik du Toit in 1991, so the new name that they came up with for the company is Ninety One.

Another tough set of results for Investec. Adjusted earnings decreased by 21.4% for the year ended 31 March 2012. To put things into perspective the Investec PLC share price is down over 4% so far this year while the overall banking index is up over 16%, even after this recent fall. Wow that is a big underperformance. It seems like their exposure to boring old developed economies is slowing them down. The UK and especially Australia have really dampened earnings while South Africa is still doing fine.

Sometimes it comes across as arrogant to blow your own horn but in this case I have to say we have been right so far. I'm talking about the Investec trading update which came out yesterday morning which indicated that headline earnings per share were expected to be down by 22%-27%. This is what I said when I analysed their full year results last year in May.

Investec released an interim management statement for nine months to December. The performance overview pretty much sums up everything you need to know about diversified banks: "Against a backdrop of volatile markets and low levels of activity the third quarter of the group's 2012 financial year has proven to be challenging. The asset management and wealth management businesses continued to see net inflows however overall assets under management pre the acquisition of Evolution Group plc declined. The Specialist Banking businesses benefited from growth in both margin and fee income but earnings from principal activities decreased substantially."