Investec posts record dividend as loan growth boosts profit

Investec will pay a record dividend for the third year after the bank’s operating profit surpassed the £1 billion (R24 billion) mark for the first time.

The specialist lender with operations in the UK and South Africa announced on Thursday morning that its “pre-provisioned” adjusted operating profit rose 7.8% to over £1.04 billion (R25.1 billion) for the financial year ended 31 March 2025.

Read the Sens here.

Read: Investec posts record interim dividend as profits climb

Headline earnings per share (Heps) retreated marginally to 72.6 pence from 72.9 pence, while return on equity eased to 13.9% from 14.6%, but remained within the bank’s 13%-17% target range, it said.

Investec declared a final dividend of 36.5 pence per share, beating the 35.7 pence-per-share estimate of six analysts surveyed by Bloomberg.

The firm has benefited from lending growth, continued client acquisition, and strong net inflows into discretionary and annuity funds under management. A lower cost of funds in southern Africa helped partly offset the effects of deposit repricing at its UK business.

Group CEO Fani Titi announced in a media call on Thursday morning that the group plans a share buyback of approximately £100 million (R2.5 billion) over the next 12 months as part of ongoing capital optimisation at its South African businesses.

The lender has spent about £300 million (R7.2 billion) since 2023 on share buybacks, Titi notes.

Net interest income rose marginally by 1.5% to £1.36 billion (R32.79 billion), while non-interest revenue showed stronger improvement, increasing by 11.5% to £832.4 million (R20.1 billion).

Deposits climbed 4.1% to £41.2 billion in the period, while the bank’s net interest income rose 1.5% to £1.36 billion, boosted by growth in lending.

The cost-to-income ratio improved to 52.6%, while the bank’s credit loss ratio was 38 basis points, within the group’s through-the-cycle range of 25 to 45 basis points.

Motor vehicle finance investigation

Investec remains exposed to regulatory uncertainty in the UK stemming from the Financial Conduct Authority (FCA)’s ongoing motor finance commission review. The group has retained the £30 million (R723.6 billion) provision it raised in FY2024, stating that it “remains appropriate” in light of ongoing legal uncertainty. No additional charges have been taken in FY2025.

While the group is monitoring developments closely, it noted that the final financial impact of the FCA investigation or potential remediation efforts may “materially vary,” pending further guidance or legal outcomes.

Read: Investec sticks to R684m provision for UK motor finance probe – for now

Outlook

Investec expects FY2026 group ROE to be around 14%.

Despite global economic uncertainty, Investec’s management remains confident in the group’s positioning. “We are scaling and leveraging our client franchises, allocating capital with discipline, and investing in clearly defined growth initiatives,” Titi notes.

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