Investec to pay dividend despite fall in profits

Investec, a leading financial institution, has reported a 50 per cent fall in adjusted basic earnings per share for the six months ended in September. Despite the challenges posed by the global economic turmoil, Investec has shown resilience by returning to dividend territory and declaring an interim dividend of 5.5 pence. The CEO of Investec, Fani Titi, spoke to CNBC Africa to discuss the company's performance and outlook for the future. Titi emphasized that the decision to pay a dividend was supported by the significant increase in net asset value, funding from their wealth businesses in South Africa and the UK, as well as dividends expected from their investment in 91. The company takes regulatory guidance seriously and had not paid a final dividend for the previous financial year, demonstrating their commitment to capital preservation. Titi expressed confidence in the board's assessment of capital sufficiency to weather the current economic storm and support future growth. Looking ahead, Titi indicated that the company anticipates an improved performance in the second half of the year, barring any adverse changes to lockdown regulations in South Africa or the UK. Investec has observed increasing client activity in South Africa and aims for better overall performance in the coming months. In terms of business performance, Investec's private banking segment in both South Africa and the UK has shown resilience and growth. In South Africa, the private bank has successfully expanded its client base and seen increased turnover and card expenditure. Similarly, the UK private bank has performed well, with a notable uptick in mortgage lending activity due to favorable market conditions. While corporate clients have exhibited cautious behavior amidst economic uncertainties, Investec's wealth businesses have delivered solid results, providing a positive outlook for the next six months. Titi also commended the efforts of the South African government in driving investment and infrastructure projects to stimulate economic growth. He expressed optimism in the potential impact of these initiatives on private sector investment, job creation, and overall economic health. Titi underscored the importance of effective execution and tough decision-making to propel the country towards sustainable growth and financial stability. As South Africa navigates the challenges of corruption and economic constraints, Investec remains committed to contributing to the country's recovery and long-term prosperity.