Investec PLC confirms UK job cuts as interim profits expected to plunge

() boss Fani Titi has confirmed the group plans to cut 210 UK jobs as the bank’s underlying profits are expected to shrink by up to 60% in the first half of 2020.

The redundancies are part of an ongoing restructuring of the business, with the majority of job losses expected to be in support roles in London, representing around 13% of the UK headcount.

The Anglo-South African wealth management and specialist banking group said adjusted operating profit for continuing operations in the six months to September 30, 2020, is expected to fall by 50%-60% compared with the same period last year. 

Adjusted earnings per share (EPS) for the half-year are expected to be down 53%-63% year-on-year at between 10.5p and 8.3p, with basic EPS down 56%-66% to between 8.4p and 6.5p. Including discontinued operations, adjusted EPS is expected to be down 64%-71% to between 10.5p and 8.3p 

Continuing operations include the group’s equity accounted earnings for Ninety One, the asset management unit that was spun off and rebranded in March this year but are included in the previous year’s results in the discontinues operations calculation.

Declines were blamed on the challenging economic backdrop, primarily caused by the coronavirus (COVID-19) and associated pandemic lockdowns, with central banks also lowering average interest rates, client activity reducing and a 22% depreciation of the average rand-sterling rate compared to a year earlier. 

Titi argued that the group saw a “resilient” performance that leaves the business “well-positioned” for the future in the trading update. 

No interim dividend is expected to be declared, in light of the prevailing guidance from both the South African and UK regulators, Investec said.