Investec's results hurt by weak currency exchange

6th Feb 2014 09:55

- Weak rand impacts results- Income broadly flat- Operating profit up 12 per centInvestec said it was negatively affected by the depreciation of the South African rand against the pound over the nine months through December 2013.Total operating income was broadly flat compared to the prior year, the banking and asset manager revealed in a trading update on Thursday.Impairment losses on loans and advances fell by 26%.Operating profit before goodwill, acquired intangibles, non-operating items and taxation and after other non-controlling interests was 12% ahead of the prior year. Recurring income as a percentage of total operating income amounted to about 74%, up from 71% in 2012, driven by higher average funds under management.Since March this year, third party assets under management have fallen by 2% and customer accounts have decreased by 10%.Core loans and advances were down by 9% to £16.8bn.Investec is undergoing a strategic review in which it plans to transform its Australian banking business into a boutique operation focusing on Corporate Advisory, Property Funds, Aviation, Commodity and Resource Finance, Project Finance, Corporate and Acquisition Finance, and Financial Markets. "The group's priority is to improve returns and maximise value while maintaining strong relationships with our client base," the company said.The group is also looking to sell its Kensington mortgage business in the UK and has received "certain expressions of interest".Shares rose 2.57% to 407p at 10:19 on Thursday.RD