REG - Investec PLC - FY26 Pre-Close Trading Update

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RNS Number : 2039X  Investec PLC  19 March 2026

 Investec Limited                               Investec plc
 Incorporated in the Republic of South Africa   Incorporated in England and Wales

Registration number 1925/002833/06
Registration number 3633621

JSE share code: INL
LSE share code: INVP

 JSE hybrid code: INPR                          JSE share code: INP

ISIN: GB00B17BBQ50
 JSE debt code: INLV

                                              LEI: 2138007Z3U5GWDN3MY22
 NSX share code: IVD

 BSE share code: INVESTEC

 ISIN: ZAE000081949

 LEI: 213800CU7SM6O4UWOZ70

Investec Group pre-close trading update
 

19 March 2026

Investec Group today announces its scheduled pre-close trading update for the
year ending 31 March 2026 (FY2026). An investor conference call will be held
today at 09:00 UK time / 11:00 South African time. Please register for the
call at www.investec.com/investorrelations.

Commentary on the Group's financial performance in this pre-close trading
update represents the eleven months ended 28 February 2026 and compares
forecast FY2026 to FY2025 (31 March 2025).

 

FY2026 earnings update and guidance

 

The Group is expected to deliver a resilient performance, reflecting the
strength of our client franchises and diversified revenue streams.

 

We are making progress on the strategic growth agenda outlined in May 2025.
The investment in our Corporate mid‑market, Private Client segments and the
ongoing modernisation of our operating and digital platforms is on track.

As part of our capital management, the Group's R2.5 billion / c.£110 million
share buy-back programme announced in May 2025 is complete.

 

Our strong capital generation has enabled us to continue supporting our
clients in an uncertain and evolving environment.

 

For the year ending 31 March 2026, the Group expects:

·      Adjusted earnings per share of 81.6p to 84.0p (FY2025: 79.1p) or
3% to 6% ahead of prior year

·      Headline earnings per share of 72.6p to 74.1p (FY2025: 72.6p) or
flat to 2% ahead of prior year

·      Basic earnings per share of 76.9p to 79.2p (FY2025: 72.8p) or 6%
to 9% ahead of prior year

·      Pre-provision adjusted operating profit to be between £1 066.9
million and £1 092.5 million (FY2025: £1 039.2 million) or between 3% and 5%
ahead of prior year

·      Credit loss ratio to be within the through-the-cycle (TTC) range
of 25bps to 45bps. The overall credit quality remains solid

·      Cost to income ratio to be between 52% and 54%, in line with
guidance

·      Adjusted operating profit before tax to be between £940.3
million and £965.9 million

(FY2025: £920.0 million)

o  The Southern African business adjusted operating profit is expected to be
at least 4% ahead of the prior year in Rands (FY2025: R 10 775 million,
£463.0 million). The Specialist Bank adjusted operating profit is expected to
be at least 5% ahead of prior year in Rands (FY2025: R9 976 million, £428.7
million). The credit loss ratio is expected to be around the lower end of the
TTC range of 15bps to 35bps. The Southern African business ROE is expected to
be around 18.0%, within the 16% to 20% medium-term target range. The Investec
Limited CET1 ratio at 31 December 2025 was 14.2%(1) (31 March 2025: 14.8%)

o  The UK business, including our interest in Rathbones, adjusted operating
profit is expected to be at least in line with the prior year (FY2025: £457.0
million). The UK Specialist Bank adjusted operating profit is expected to be
between 1.0% and 5.0% behind the prior year (FY2025: £410.4 million). We
expect to report a credit loss ratio around the upper end of the previously
guided range of 50bps to 60bps. The UK business ROTE is expected to be between
13.3% and 13.7%, within the medium-term target range of 13% to 17%. The
Investec plc CET1 ratio at 31 December 2025 was 12.3%(2) (31 March 2025:
12.6%(3))

·      Group ROE to be between 13.3% and 13.7%, within our medium-term
target range of 13% to 17%. Group ROTE is expected to be between 15% and 16%,
within the 14% to 18% medium-term range. We remain committed to advancing
returns towards the upper end of our medium‑term target range by FY2030.

The year-to-date performance that formed the basis for the guidance provided
above is summarised below:

·      Revenue growth was supported by increased activity levels, higher
average advances, and positive net inflows in discretionary and annuity funds
under management (FUM). This was counterbalanced by the negative impact of
lower average interest rates

o  Net interest income reflects growth in average lending books, and success
in our strategic execution to optimise the funding mix in Southern Africa.
This was offset by the endowment effect of declining global interest rates and
margin compression from competitive pricing

o  Non-interest Revenue (NIR) growth was underpinned by strong fee generation
from our Banking businesses in both geographies, as well as higher annuity
fees from our SA Wealth & Investment business. Increased client hedging
activity in response to global market volatility supported customer‑flow
trading income in both geographies. The Group's share of Rathbones post-tax
underlying profit attributable to shareholders increased year on year

·      Fixed operating expenditure growth reflected continued investment
in people and technology particularly in building and modernising
transactional banking capabilities, as well as driving strategic and
regulatory projects to enhance business resilience and support growth.
Variable remuneration was in line with underlying business performance.

( )

(1) Investec Limited is predominately on the advanced approach for credit and
market risk. Investec Limited's capital information includes unappropriated
profits. If unappropriated profits are excluded from capital information,
Investec Limited's CET1 ratio would be 162bps (121bps) lower.

(2) Investec plc reports capital ratios measured on a Standardised capital
measurement approach. Investec plc's December 2025 CET1 ratio excludes
quarterly profits and associated foreseeable charges and dividends for the
period 1 October 2025 to 31 December 2025. In accordance with the Prudential
Regulation Authority rules, quarterly profits may only be included in a firm's
capital position once the profits have been independently verified by an
external audit firm.

(3)Investec plc's March 2025 capital disclosures follow Investec's normal
basis of presentation and do not include the deduction of foreseeable charges
and dividends when calculating the CET1 ratio as required under the Capital
Requirements Regulation.

 

For the eleven-month period ended 28 February 2026:

·      Within Specialist Banking, core loans increased by 7.4%
annualised in neutral currency and by 13.3% annualised in reported currency to
£36.3 billion (31 March 2025: £32.4 billion) benefitting from the 9.5%
appreciation of the Rand to Pound sterling compared to 31 March 2025. Growth
was seen across the private client lending books and corporate lending books
in both geographies

·      Customer deposits increased by 5.7% annualised in neutral
currency and by 11.5% annualised in reported currency to £45.5 billion

·      FUM in our Southern African Wealth business increased by 26.7%
since 31 March 2025 to £29.6 billion at

28 February 2026 (31 March 2025: £23.4 billion). Strong net inflows in our
discretionary and annuity funds of R22.8 billion (£979 million) were
supplemented by R6.4 billion (£276 million) additional FUM from a strategic
acquisition by our Swiss operations in September 2025. This was partly offset
by non-discretionary outflows of R8.2 billion (£353 million)

Investec's associate, Rathbones reported funds under management and
administration (FUMA) of

£115.6 billion as at 31 December 2025 (31 December 2024: £109.2 billion).

The Group has robust capital and liquidity levels to deliver on our clear and
executable strategy to enhance

long-term shareholder returns. We are focused on growing market share,
deepening client relationships and driving incremental returns, while
maintaining cost discipline and capital efficiency.

 

Other information

The financial information on which this trading update is based, has not been
reviewed and reported on by the external auditors.

 

An investor conference call will be held today at 09:00 UK time / 11:00 South
African time. Please REGISTER HERE
(https://events.teams.microsoft.com/event/beb0cd0e-f0a4-4756-bfaf-f6dc39490d68@6d6a11bc-469a-48df-a548-d3f353ac1be8)
for the call.

 

Year end results and Business update

The year end results for the year ending 31 March 2026 are scheduled for
release on Thursday, 21 May 2026. Following the results presentation, the
Group will provide an update on our Private Client growth initiatives.

Webcast details will be provided in due course.

 

On behalf of the board

Philip Hourquebie (Chair), Fani Titi (Group Chief Executive)

 

For further information please contact:

Investec Investor Relations

General enquiries: investorrelations@investec.co.za
(mailto:investorrelations@investec.co.za)

 

Results:

Qaqambile
Dwayi

SA Tel: +27 (0)83 457 2134
 

 

Brunswick (SA PR advisers)

Tim Schultz Tel: +27 (0)82 309 2496

 

Lansons (UK PR advisers)

Tom Baldock Tel: +44 (0)78 6010 1715

 

About Investec

Investec Group is a leading international bank and wealth manager, with a
regional focus in Southern Africa and the United Kingdom, complemented by a
strategic presence in Continental Europe, Channel Islands, Dubai, India,
Mauritius, Switzerland, and the United States.

 

Investec partners with private, corporate, and institutional clients, and
delivers tailored solutions with exceptional service in the areas of private
banking and wealth management, and corporate and investment banking. Investec
is driven by its purpose to create enduring worth for all its stakeholders.

 

The Group was established in 1974 and currently has approximately 8,000
employees. Investec has a dual-listed company structure with primary listings
on the London and Johannesburg Stock Exchanges.

 

Johannesburg and London

 

JSE Equity and Debt Sponsor: Investec Bank Limited

 

Key income drivers

 

    Core loans

 £'m           28-Feb-26  31- Mar-25  Annualised % change  Annualised

                                                           Neutral currency

% change
 UK and Other  17,704     16,814      5.8%                 5.8%
 South Africa  18,634     15,573      21.4%                9.1%
 Total         36,338     32,387      13.3%                7.4%

    Customer deposits

 £'m           28-Feb-26  31- Mar-25  Annualised % change  Annualised Neutral currency

% change
 UK and Other  22,392     21,449      4.8%                 4.8%
 South Africa  23,100     19,715      18.7%                6.6%
 Total         45,492     41,164      11.5%                5.7%

 

 Funds under Management (FUM)
 £'m                                        28-Feb-26  31-Mar-25   % change   Neutral currency

% change

 Wealth & Investment - Southern Africa      29,618     23,385     26.7%       16.0%
 Discretionary                              17,724     13,944     27.1%       16.1%
 Non-discretionary                          11,894     9,441      26.0%%      16.0%
                                            115,617    104,052

 Rathbones Group plc*

Note: Totals and variances are presented in £'millions which may result in
rounding differences

*  The balance of £115.6bn reflects total FUMA as reported at 31 December
2025 by Investec's associate, Rathbones.

 

 

Notes

 

1.     Definitions

·      Adjusted operating profit refers to profit before tax of
continuing operations, adjusted to remove goodwill, acquired intangibles and
strategic actions, including such items within equity accounted earnings, and
non-controlling interests. Non-IFRS measures such as adjusted operating profit
are considered as pro-forma financial information as per the JSE Listings
Requirements. The pro-forma financial information is the responsibility of the
Group's Board of Directors. Pro-forma financial information was prepared for
illustrative purposes and because of its nature may not fairly present the
issuer's financial position, changes in equity or results of operations. This
pro-forma financial information has not been reported on by the Group's
external auditors

·      Adjusted earnings attributable to ordinary shareholders is
calculated as earnings attributable to shareholders adjusted to remove
goodwill, acquired intangible assets, strategic actions, including such items
within equity accounted earnings, and earnings attributable to perpetual
preference shareholders and Other additional tier 1 security holders

·      Adjusted earnings per share is calculated as adjusted earnings
attributable to ordinary shareholders divided by the weighted average number
of ordinary shares in issue during the year

·      Headline earnings is an earnings measure required to be
calculated and disclosed by the JSE and is calculated in accordance with the
guidance provided by The South African Institute of Chartered Accountants in
Circular 1/2023

·      Headline earnings per share (HEPS) is calculated as headline
earnings divided by the weighted average number of ordinary shares in issue
during the year.

·      Basic earnings is earnings attributable to ordinary shareholders
as defined by IAS33 Earnings Per Share

·      Core loans is defined as net loans to customers plus net own
originated securitised assets

·      The credit loss ratio is calculated as expected credit loss (ECL)
impairment charges on gross core loans as a percentage of average gross core
loans subject to ECL.

 

 

2.     Exchange rates

 

The Group's reporting currency is Pounds Sterling. Certain of the Group's
operations are conducted by entities outside the UK. The results of operations
and the financial condition of these individual companies are reported in the
local currencies in which they are domiciled, including Rands, Australian
Dollars, Euros and US Dollars. These results are then translated into Pounds
Sterling at the applicable foreign currency exchange rates for inclusion in
the Group's combined consolidated financial statements. In the case of the
income statement, the weighted average rate for the relevant period is applied
and, in the case of the balance sheet, the relevant closing rate is used. The
following table sets out the movements in certain relevant exchange rates
against the Pound Sterling over the period:

 

                     Eleven months to       Year ended

                     28 February 2026       31 March 2025
 Currency            Period end  Average    Period end  Average

 per GBP1.00
 South African Rand  21.49       23.33      23.74       23.25
 Euro                1.14        1.16       1.20        1.19
 US Dollar           1.35        1.34       1.29        1.28

 

 

3.     Profit forecasts

·      The following matters highlighted in this announcement contain
forward-looking statements:

§  Adjusted earnings per share (EPS) is expected to be between 81.6p and
84.0p which ahead of FY25

§  Headline earnings per share is expected to be between 72.6p and 74.1p
which is flat to c.2% ahead of FY25

§  Basic EPS is expected to be between 76.9p and 79.2p which is ahead of
FY25

§  Pre-provision adjusted operating profit is expected to be between £1
066.9 million and £1 092.5 million

§  Adjusted operating profit is expected to be between £940.3 million and
£965.9 million

§  The UK business' (including our interest in Rathbones) adjusted operating
profit to be at least in line with the prior year. The UK Specialist Bank
adjusted operating profit is expected to be 1% to 5% behind the prior year.
The UK business ROTE is expected to be between 13.3% and c.13.7%, within the
medium-term target range of 13% to 17%

§  The Southern African business adjusted operating profit is expected to be
at least 4% ahead of the prior year in Rands. The Southern African Specialist
Bank adjusted operating profit is expected to be at least 5% ahead of prior
year in Rands. SA business ROE is expected to be around 18.0% within the 16%
to 20% medium-term target range

§  Group ROE is expected to be between 13.3% and 13.7%, within the Group's
medium-term target range of 13% to 17%.

(collectively the Profit Forecasts)

·      The basis of preparation of each of these statements and the
assumptions upon which they are based are set out below. These statements are
subject to various risks and uncertainties and other factors - which may cause
the Group's actual future results, performance or achievements in the markets
in which it operates to differ from those expressed in the Profit Forecasts

·      Global uncertainty is currently heightened. Our guidance is based
on current conditions, further escalation in the Middle East could impact key
macroeconomic assumptions, including sentiment, trade, inflation, interest
rate expectations and growth

·      Any forward-looking statements made are based on the knowledge of
the Group at 19 March 2026

·      These forward-looking statements represent a profit forecast
under the Listing Rules. The Profit Forecasts relate to the year ending 31
March 2026

The financial information on which the Profit Forecasts are based is the
responsibility of the Directors of the Group and has not been reviewed and
reported on by the Group's auditors.

Basis of preparation

·      The Profit Forecasts have been compiled using the assumptions
stated below, and on a basis consistent with the accounting policies adopted
in the Group's March 2025 audited financial statements, which are in
accordance with IFRS and are those which the Group anticipates will be
applicable for the year ending 31 March 2026.

·      The Profit Forecasts have been prepared based on (a) audited
financial statements of the Group for the year ended 31 March 2025, and the
results of the Specialist Banking and Wealth & Investment businesses
underlying those audited financial statements; (b) the unaudited management
accounts of the Group and the Specialist Banking and Wealth & Investment
businesses for the eleven months to 28 February 2026; and (c) the projected
financial performance of the Group and the Specialist Banking and Wealth &
Investment businesses for the remaining one month of the year ending 31 March
2026.

·      Percentage changes shown on a neutral currency basis for balance
sheet items assume that the relevant closing exchange rates at 28 February
2026 remain the same as those at 31 March 2025. This neutral currency
information has not been reported on by the Group's auditors.

 

Assumptions

The Profit Forecasts have been prepared on the basis of the following
assumptions during the forecast period:

 

Factors outside the influence or control of the Investec Board:

·      There will be no material change in the political and/or economic
environment that would materially affect the Investec Group

·      There will be no material change in legislation or regulation
impacting on the Investec Group's operations or its accounting policies

·      There will be no business disruption that will have a significant
impact on the Investec Group's operations

·      The Rand/Pound Sterling and US Dollar/Pound Sterling exchange
rates remain materially unchanged from the prevailing rates detailed above

·      The tax rates remain materially unchanged

·      There will be no material changes in the structure of the
markets, client demand or the competitive environment.

 

Estimates and judgements

In preparation of the Profit Forecasts, the Group makes estimations and
applies judgement that could affect the reported amount of assets and
liabilities within the reporting period. Key areas in which judgement is
applied include:

·      Valuation of unlisted investments primarily in the private
equity, direct investments portfolios and embedded derivatives. Key valuation
inputs are based on the most relevant observable market inputs, adjusted where
necessary for factors that specifically apply to the individual investments
and recognising market volatility

·      The determination of ECL against assets that are carried at
amortised cost and ECL relating to debt instruments at fair value through
other comprehensive income (FVOCI) involves the assessment of future cash
flows which is judgmental in nature

·      The Investec Group notes the FCA announcement and consultation
paper on an industry wide redress scheme for motor finance published on 7
October 2025, following the Supreme Court judgment handed down on 1 August
2025. As previously stated, in establishing our existing provision the Group
created a range of scenarios to address uncertainties on a number of key
inputs, including regulatory responses and outcomes in relation to redress.
The FCA consultation paper provided further detail on its proposed redress
approach, in particular the products in scope, situations where it considers
inadequate disclosure would give rise to an unfair relationship, proposed
redress methodology, engagement approach and time bar. Based on the FCA
consultation in its current form the Group has concluded that the existing
£30 million provision, including both redress and operational costs, remains
appropriate based on information currently available. This represents the
Group's best estimate of the potential impact of this matter. The current FCA
proposals remain under consultation and we await the final redress scheme
rules, which the FCA has stated it expects to publish in late March 2026. The
redress exposure is still uncertain, subject to variability arising from any
changes made by the FCA in the final scheme rules, customer take-up rates and
the potential impact these may have on operational costs. Investec commenced
lending into the UK Motor Vehicle Finance market in June 2015 and motor
finance gross core loans amounted to £11 million at 31 March 2016.

·      Valuation of investment properties is performed by capitalising
the budgeted net income of the property at the market related yield applicable
at the time

·      The Group's income tax charge and balance sheet provision are
judgmental in nature. This arises from certain transactions for which the
ultimate tax treatment can only be determined by final resolution with the
relevant local tax authorities. The Group recognises in its tax provision
certain amounts in respect of taxation that involve a degree of estimation and
uncertainty where the tax treatment cannot finally be determined until a
resolution has been reached by the relevant tax authority. The carrying amount
of this provision is often dependent on the timetable and progress of
discussions and negotiations with the relevant tax authorities, arbitration
processes and legal proceedings in the relevant tax jurisdictions in which the
Group operates. Issues can take many years to resolve and assumptions on the
likely outcome would therefore have to be made by the Group

·      Where appropriate, the Group has utilised expert external advice
as well as experience of similar situations elsewhere in making any such
provisions

·      Determination of interest income and interest expense using the
effective interest rate method involves judgement in determining the timing
and extent of future cash flows.

 

 

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