Investec has reported a surge in profit to over £1bn for its latest financial year, bolstered by increased lending and deposits.
The FTSE 250 bank posted a 7.8 per cent annual rise in operating profit to just above £1bn for the year ending 31 March, 2025, as reported by City AM.
This exceeded the bank’s own revised forecast in March, where it predicted profits would peak at £956m.
Revenue reached £2.2bn, up from £2.1bn the previous year, driven by a 4.7 per cent increase in lending to £32.4bn, with a robust performance from its South African division.
Investec noted that growth in loans to UK businesses was balanced by higher repayment rates due to the high-interest environment.
Customer deposits saw a 4.1 per cent increase to £41.2bn, backed by a strong performance in retail and non-wholesale deposits across both the UK and South Africa.
Investec awaits motor finance ruling
Operating costs rose 2.8 per cent to £1.2bn but were offset by higher revenue, according to Investec.
This resulted in the group’s cost-to-income ratio, a measure of efficiency comparing operating costs to income, with a lower figure indicating greater stability, reducing to 52.6 per cent.
Rathbones, the wealth and investment manager in which Investec holds a 41 per cent stake, reported funds under management at £104.1bn.
A ruling from the Supreme Court on the motor finance scandal is expected in the early summer.
The UK’s Supreme Court is poised to determine in early April whether to reverse the Court of Appeal’s judgement from October, which deemed it illegal for banks to remunerate car dealers with a commission without obtaining the customer’s informed consent.
Investec has commented: “It will continue to assess developments and potential impacts, including the outcome of the appeals, any announcement by the Financial Conduct Authority of their next steps, and any action by other regulators or government bodies.”
The group’s chief executive, Fani Titi, remarked: “We are pleased to report a strong performance in a volatile operating environment, with the group generating a return on equity of 13.9 per cent, in line with guidance provided in May 2024.”
Additionally, Titi stated: “We are scaling and leveraging our client franchises, allocating capital with discipline and investing in clearly defined growth initiatives to enhance our existing platforms.”
