Investec expects profit decrease

Investec Plc, which owns a bank and money manager in South Africa and the UK, declined the most in more than four years after it said fiscal first-half operating profit will drop on rand weakness and market turmoil.

Adjusted earnings per share for the six months ending Sept 30 are expected to be as much as 10% lower than a year earlier, the Johannesburg- and London-based lender said in a statement yesterday

Investec, which reports results in November, fell as much as 8.6% in London trading.

“The returns are not acceptable,” CEO Stephen Koseff said in a presentation in Johannesburg. “We’re firing on two and a half cylinders out of three. There’s an element of the business that is still a work in progress.”

Investec earnings came under pressure after the rand depreciated 14% against the dollar this year, making it the worst performer of the major currencies tracked by Bloomberg. Profit at the company’s global private banking business won’t match the year-earlier period, weighed down by the performance of its UK and Australian units, Investec said.

Investec shares were down 3.2% yesterday.

Impairments are expected to be about 25% lower than a year earlier, while expenses will increase “moderately,” the bank said.