Investec Group (INVP) Trading update summary

Financial performance and outlook

• Results for the five months to 31 August 2026 and 1H2027 are in line with previous guidance, supported by disciplined execution, strong client franchises, balance sheet growth, and sound asset quality.

• Revenue growth was driven by increased client activity, higher average advances, and net inflows in the Wealth business, partially offset by lower average interest rates.

• Net core loans from Banking businesses rose 6.3% annualized in neutral currency and 10.3% in reported currency to GBP 37 billion.

• Customer deposits increased 2.8% annualized in neutral currency and 6.8% in reported currency to GBP 46 billion.

• Funds under management in Southern African Wealth and Investment grew 13.8% since March 2026 to GBP 30.7 billion, with strong inflows in both discretionary and non-discretionary funds.

Guidance and key metrics

• Adjusted EPS expected to be 3%-7% ahead of prior period, with forecast at 41.7p–43.3p; headline EPS at 38.1p–39.7p (up 4–8%), and basic EPS at 38.1p–39.7p (up 1–5%).

• Pre-provision adjusted operating profit anticipated to be 1%-4% ahead of prior period, between £531.4m and £548.4m.

• Cost to income ratio forecasted between 52% and 54%; credit loss ratio expected within 25-45 basis points.

• Group ROE projected between 13.1% and 13.5%, and return on tangible equity between 15% and 15.5%.

• CET1 ratios at 30 June 2026: Investec Limited 14.2%, Investec plc 12.7%.

Strategic and operational highlights

• Continued investment in client-facing roles, technology, and regulatory projects to support growth, with operating expenditure rising due to these investments and salary adjustments.

• Focus on growing and enhancing client propositions, efficient capital allocation, and modernizing digital platforms.

• Net interest margin remains positive despite short-term drags from lower interest rates and competitive pressures.

• Retail deposit base and cost of deposits are being actively managed for long-term benefit.

• Non-interest revenue growth driven by strong fee income in Southern Africa and increased trading activity, though investment and trading income from balance sheet management lagged.