Investec reports higher annual earnings, larger dividend
By Josh White
Date: Thursday 21 May 2026
(Sharecast News) - Investec reported higher annual earnings and a larger dividend on Thursday, as growth in lending, deposits and funds under management helped offset margin pressure and continued investment in the business.
The banking and wealth management group said operating income rose 4.2% to £2.28bn for the year ended 31 March, while adjusted operating profit increased 3.4% to £951.0m.
Adjusted earnings per share rose 4.8% to 82.9p, basic earnings per share increased 5.9% to 77.1p, and headline earnings per share edged up 0.7% to 73.1p.
The board proposed a final dividend of 21.0p per share, up from 20.0p, taking the total dividend for the year to 38.5p, compared with 36.5p in 2025.
The payout ratio was 46.4%, within Investec's 35% to 50% policy.
Revenue growth was supported by client acquisition, lending growth, higher fee income and net inflows into discretionary and annuity funds under management.
Net interest income fell 1.6% to £1.34bn, as growth in average lending books and lower funding costs were offset by lower interest rates and competitive pricing.
Non-interest revenue rose 13.6% to £945.7m, helped by higher fee and commission income, investment income, trading income from customer flows and a larger contribution from associates.
Net core loans increased 9.6% to £35.5bn, while customer deposits rose 8.7% to £44.7bn.
Funds under management in the Southern African wealth business increased 15.4% to £27.0bn, supported by net inflows in discretionary and annuity funds and a strategic acquisition by its Swiss operations.
Investec's associate Rathbones reported funds under management and administration of £113.6bn at 31 March, up from £104.1bn a year earlier.
The cost-to-income ratio was 52.9%, compared with 52.6% in 2025, as operating costs rose 4.7% to £1.21bn.
Investec said the increase reflected continued investment in people and technology, targeted transformation projects, resilience spending and inflation.
The credit loss ratio on core loans improved to 36 basis points from 38 basis points, remaining within the group's through-the-cycle range of 25 to 45 basis points.
Expected credit loss impairment charges rose to £124.2m from £119.2m, while overall credit quality remained strong.
Return on equity was 13.6%, compared with 13.9% a year earlier, and return on tangible equity was 15.7%, compared with 16.2%.
Both remained within the group's medium-term target ranges.
Investec said it remained well capitalised, with Investec Limited reporting a common equity tier 1 ratio of 13.6% and Investec plc reporting a CET1 ratio of 13.0%.
Cash and near cash increased to £18.2bn, representing about 40.7% of customer deposits.
In Specialist Banking, adjusted operating profit rose 2.2% to £857.1m. Southern Africa increased adjusted operating profit by 6.0% in rand terms, while UK and Other reported a 2.1% decline to £401.6m as growth in franchise activity was offset by margin compression and continued investment.
Wealth and Investment adjusted operating profit rose 13.9% to £127.9m, supported by growth in the Southern African wealth business and Investec's share of Rathbones' post-tax underlying profit.
Investec said it had completed the roughly R2.5bn, or £110m, share buyback announced in May 2025.
It also said it had facilitated £3.1bn of sustainable and transition finance in the first year of measuring progress towards its £18bn target by 2030.
Chief executive Fani Titi said the group had delivered a resilient performance in an uncertain macroeconomic environment, reflecting the strength of its diversified business model and balance sheet.
"We are making good progress with our strategy to enhance our platforms, leverage our franchises, and deliver long-term value for our stakeholders," he said.
"We are on track to achieve returns at the upper end of our target range by FY2030."
For the year ending March 2027, Investec said it expected return on equity of 13.0% to 14.0% and return on tangible equity of 14.8% to 15.8%, reflecting significant investment in growth initiatives.
It said it expected the cost-to-income ratio to be between 52.0% and 54.0%, and the credit loss ratio to remain within its 25 to 45 basis point through-the-cycle range.
By March 2028, the group expects return on equity to improve to between 13.8% and 14.6%, and return on tangible equity to between 15.8% and 16.6%, as it leverages existing franchises and benefits from investment in its South African corporate mid-market business and UK private client and corporate mid-market propositions.
Reporting by Josh White for Sharecast.com.
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