Investec Group (INVP) H1 2025 earnings summary

Executive summary

• Adjusted operating profit rose 7.6% to £475 million for 1H2025, with adjusted EPS at 39.5p and interim dividend up 6.5% to 16.5p per share, reflecting strong client franchise momentum and robust capital generation despite a challenging macroeconomic environment.

• ROE was 13.9%, within the upgraded medium-term target range of 13%-17%, and ROTE at 16.4%.

• Strategic actions included the completion of the Rathbones combination, property management disposals, and a significant share buy-back.

• Maintained robust capital and liquidity positions, enabling reinvestment in technology, people, and growth initiatives.

Financial highlights

• Pre-provision adjusted operating profit increased 11.1% to £541.6 million, with revenue up 5.6% to £1,102.6 million and cost-to-income ratio improved to 50.8%.

• Net interest income rose 2% to £684.4 million, non-interest revenue up 12.2% to £418.2 million, driven by higher fees and investment income.

• Funds under management grew 11.9% (8.4% in neutral currency), with strong net inflows in South Africa and Switzerland.

• Loan book expanded by just over 5% to £31.7 billion; deposits rose by nearly 5% annualized to £40.4 billion.

• Dividend payout ratio at 41.7%, within the 35%-50% policy.

Outlook and guidance

• FY2025 ROE expected at ~14% and ROTE at ~16%; Southern Africa ROE ~19%, UK & Other ROTE ~13.5%.

• Cost-to-income ratio forecasted between 51%-53%; credit loss ratio to remain within 25-45bps range.

• Revenue momentum anticipated from book growth, improved client activity, and client acquisition, partially offset by lower global interest rates.

• Anticipate improving GDP growth in both South Africa and the UK, with increased client activity as interest rates decline.