Investec PLC (LSE:INVP) said full year earnings per share surged more than 90% to just top guidance and predicted a “positive revenue outlook” for 2023.
Adjusted earnings per share for the year ending in March came in at 55.1p - exceeding 2019 levels and slightly above its earnings guidance for the period.
The investment bank raised its earnings guidance this March to 51p to 55p per share, after benefiting from lower funding costs and bigger lending books.
“Localised shocks in our core geographies included the uneven path of Brexit in the UK and the impact of social instability and power shortages in South Africa,” said Investec’s chief executive Fani Titi.
“But the hallmark of a resilient and robust business is its ability to thrive under changing and adverse circumstances.”
In March 2019, the bank reported adjusted earnings per share of 52.5p, but that sank to 37.8p the following March at the height of the Covid-19 pandemic in 2020 and fell again to 28.9p in 2021.
In its annual results statement today, Investec said that market volatility in the last quarter “negatively impacted” its funds under management.
At the time of raising its expectations for the year this March, the bank said that although it had no direct exposure to the Ukraine conflict, its outlook could be impacted by uncertainty affecting the global economy and financial markets.
Nevertheless, its core loans portfolio grew 13.2% to £29.9bn, driven by residential mortgage and corporate lending growth, and funds across its wealth business rose 9.2% to £63.4bn.
While many high-street banks estranged customers by increasing overdraft interest rates this year, investment banks such as Investec cater to high earners, often offering preferential rates.
The bank posted £1.05 billion of revenue excluding interest for the year to 31 March 2022, a 21% increase on the almost £863mln of turnover generated a year earlier.
Its adjusted operating profit was £687mln, representing a return on equity of 11.4%, which was nearly double the £378mln posted a year earlier.
Investec guided for a “positive revenue outlook” for 2023 as a result of higher interest rates and a bigger lending book, saying it expects to improve its return on equity to a target range of 12% to 16% by 2024.