Investec Group (LON:INVP) executives said the company expects a “resilient” performance for the year ending 31 March 2026, supported by client activity, loan growth and wealth inflows, while acknowledging pressure from lower average interest rates and competitive margin dynamics—particularly in the U.K.
Speaking on the company’s pre-close conference call, Chief Executive Fani Titi said the trading update reflects performance for the 11 months ended 28 February 2026 and the company’s expectations for the full year. He was joined by Group Finance Director Nishlan Samujh, U.K. CEO Ruth Leas and South African CEO Cumesh Moodliar.
Strategic progress and capital actions
As part of its capital management, the group has completed the ZAR 2.5 billion (GBP 110 million) share buyback program announced in May 2025, according to management.
11-month trends: activity-driven revenue, rate pressure, and investment spending
Management said revenue over the 11-month period was supported by increased client activity levels, higher average advances and net inflows in the wealth business. That performance was “counterbalanced” by the negative impact of lower average interest rates.
Fixed operating cost growth reflected continued investment in people and technology, with Investec highlighting work to build and modernize transactional banking capabilities as well as execute strategic and regulatory projects intended to enhance resilience and support growth.
- Net core loans increased by 7.4% annualized in neutral currency and 13.3% annualized in reported currency to GBP 36.3 billion. Management attributed the reported growth in part to a 9.5% appreciation of the rand versus the pound compared to 31 March 2025, and said growth was driven across private client and corporate lending in both geographies.
- Customer deposits increased by 5.7% annualized in neutral currency and 11.5% in reported currency to GBP 45.5 billion.
- Funds under management in the South African wealth and investment business increased by 26.7% since 31 March 2025 to GBP 29.6 billion at 28 February 2026. Investec reported strong inflows in discretionary funds, partly offset by outflows in non-discretionary funds.
FY2026 outlook: modest earnings growth and ROE within target range
For the year ending 31 March 2026, Investec said it expects:
- Adjusted earnings per share to be between 3% and 6% ahead of the prior year
- Cost-to-income ratio of 52% to 54%
- Pre-provision adjusted operating profit to be between 3% and 5% ahead of the prior year
- Credit loss ratio within its through-the-cycle range of 25 to 45 basis points
- Group ROE of 13.3% to 13.7% (within its medium-term target range of 13% to 17%)
- Group ROTE of 15% to 16% (within its medium-term range of 14% to 18%)
In Q&A, Titi addressed a question about what appeared to be slightly lower ROE guidance. He noted that prior guidance referenced “circa 13.7%,” and said the new range has a midpoint of 13.5%, implying a 20 basis point moderation at the midpoint.
U.K. net interest margin: compression offset by fees, mortgage pickup after the budget
Responding to questions on the U.K. net interest margin (NIM), Leas said Investec has seen “good levels of client activity” and increased loan growth in an uncertain U.K. macroeconomic backdrop. As expected, she said lower average interest rates across the period affected NIM, and noted credit margin compression in the market.
However, Leas said Investec has been “making up for reductions in NIM through increased fee income,” citing strong activity “through the fee line” and market demand for “attractive transactions” and “good credits and good deals.”
On lending growth, Leas said demand for mortgages picked up “post the budget” late last year and the mortgage pipeline “has grown very well,” with book growth running at around 9% to 10%. She added that corporate and other lending growth has been diversified across “different pockets of the business,” supported by transaction velocity and demand for strong credits, while weaker credits have faced funding constraints.
Titi also said that, from a U.K. perspective, margin compression and lower average rates have been factors. He added that Investec had guided that impairments in the U.K. would be toward the upper end of a previously provided 50 to 60 basis point range. Looking ahead, he said the interplay between lower rates, activity levels and impairments has not yet been enough to offset pressures during the current period, and he emphasized uncertainty tied to the war in Iran and potential impacts on oil prices, inflation and the interest rate outlook.
South Africa: private client and CIB growth, currency effect on ROE
Moodliar said South Africa saw good growth across core client franchises, including mortgage activity in private clients and “very good growth” in corporate and investment banking (CIB), where Investec delivered double-digit loan growth.
On South Africa ROE, Titi said Investec is “looking at approximately 18%” on a pound-denominated basis, and highlighted that the rand has appreciated by about 10% versus the pound. He said that on an average basis ROE is flat, but currency movements affect capital when translated, which can make the guidance “look like” a lower ROE for the South African business in pound terms.
Titi also said that South Africa’s macroeconomic environment has “turned somewhat upwards” amid reforms, and described fiscal and monetary policy management as more stable than during the COVID period, while cautioning that the outlook could be complicated by the war-related environment.
Motor finance redress: provision unchanged ahead of FCA scheme details
Asked about the motor finance redress situation and an expected FCA scheme announcement, management said no further provision has been made and that it remains comfortable with its provisioning levels. Executives said the company is operationally ready based on earlier consultation papers and is awaiting the final scheme details.
Titi added that Investec entered the business “quite late,” around 2015, and described the exposure as a small percentage of the overall book and a small market share, citing figures including about GBP 11 million on the books by 2016 and around GBP 555 million by 2021.
Closing the call, Titi said Investec’s business remains resilient despite a “choppy” environment and uncertain outlook, pointing to its client base and historically high levels of capital and liquidity, including dollar liquidity in South Africa. He said management believes the group is prepared to navigate the current period and invited analysts and investors to engage with the company for follow-up discussions.
About Investec Group (LON:INVP)
Investec Group engages in the provision of various financial products and services in South Africa, the United Kingdom, and internationally. The company provides private banking services; wealth services, including wealth and portfolio management, stockbroking, and offshore and retirement investment, and intergenerational wealth solutions; savings accounts; personal and property financing, and finance for practice; and insurance solutions covering severe illness, disability, life, mortgage and income protection, and business overloads.
