Investec | Operationally sound
Investec's FY ‘18f pre-close guidance highlighted positive operational trends, with GBP4.2bn net flows in Asset Management and 10% neutral currency core advances growth. While overall operating profit guidance (flat YoY) was disappointing, accelerated write-offs in the UK legacy portfolio (c.5% drag vs. our forecast) drove this outcome. In our view, the accelerated write-offs do not have a material impact on the Group valuation. Therefore, the pre-close guidance was positive overall. We believe the c.8% decline in the share price since the update represents a buying opportunity.Investec is an international specialist bank and asset manager that provides a range of financial products and services in three principal markets, U.K. and Europe, South Africa and Asia/Australia as well as certain other countries. Co. has three main areas of activity: Asset Management, which provides investment capabilities through active segregated mandates or mutual funds to clients; Wealth & Investment, which provides investments and savings, pensions and retirement, and financial planning; and Specialist Banking, which provides services for both personal and business needs right across Investment, Corporate and Institutional Banking, and Private Banking activities.
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