Investec falls on details of asset management demerger

Investec reported weak earnings for the six months to end September, hit by a poor performance in the UK. Supplied
DURBAN – Investec’s share price at one stage declined by more than 5.4percent on Friday after the financial services group announced further details of the demerger of its asset management business.

Investec said it expected to raise about £189million (R3.58billion) from the sale of about 10percent of Investec Asset Management, which will be renamed Ninety One when it is spun off in March.

The demerger was first announced in September. Joint chief executives Fani Titi and Hendrik du Toit said in a statement on Friday that they continued to make good progress with respect to the proposed demerger and listing of Ninety One.

“We remain excited about the benefits of this transaction and are determined to drive simplification across the group, focusing on enhancing the long-term prospects of Ninety One and Investec Bank and Wealth for the benefit of all our stakeholders. “Our shareholders are set to benefit from the resulting value creation through their direct ownership of two distinct businesses, well positioned for long-term growth,” the chief executives said.

The Investec Bank and Wealth management team have committed to deliver improved returns on equity, with the Investec Bank and Wealth target of 12 to 16percent to be achieved by the financial year to end March 2022 compared to 10.7percent achieved by Investec Bank and Wealth for the six months to the end of September.