Profits at Anglo-South African bank Investec edged up by just over one per cent this morning, causing the bank's share price to slide.
For the year ending March 2017, Investec managed to generate statutory operating profit of £607.5m – a 1.4 per cent increase on the previous year, but a 3.5 per cent drop on a constant currency basis.
Meanwhile statutory earnings per share were up 10.1 per cent to 53.2p, or 4.1 per cent on a constant currency basis.
Investec's UK legacy portfolio of assets from before the financial crisis made a steep loss of £93.5m, as the value of some assets was written down to zero in anticipation of "accelerated exits".
But there was better news in Investec's asset management business, where operating profit rose eight per cent to £178m as funds under management passed the £100bn threshold to hit £103.9bn.
The bank lifted its dividend to a full-year total of 24p, from 23p last year.
Why it's interesting
Investec has been warning of the effect Brexit may have on its business, and said again today that the "complexities of Brexit continue to cause uncertainty in the UK economy".
However, the bank did note that the economic outlook was improving, which should help to balance any risk.
Investec advised Steinhoff on its 2016 purchase of Poundland, but late last year the South African conglomerate was subjected to an accounting probe which caused its shares to take a dive.
Analysts at UBS said the results were "in line" with expectations, and showed Investec "cleaning up the legacy".
Meanwhile the bank is preparing for its long-standing management to hand over to successors. Earlier this year, the bank named Fani Titi and Hendrik du Toit as new co-chief executives who will take over in October, while independent director Perry Crosthwaite was appointed as chairman earlier this week.
What Investec said
“Operating performance during the year was underpinned by sound growth in loans and funds under management and a solid recurring income base, despite a challenging backdrop in South Africa and the UK," said current chief executive Stephen Koseff.
"The wealth and investment and asset management businesses generated substantial net inflows, with asset management exceeding £100bn of funds under management for the first time.
"The specialist bank continued to see good client acquisition in its core franchise businesses which we have built and developed over a number of years.
"We have implemented an orderly succession plan and feel confident that we are handing over a business that is well placed to continue to grow both its market position and profitability over the foreseeable future."