Investec profits slump as Irish arm sale looms
Profits at Investec's Irish operations declined sharply last year, according to recently filed accounts by the South African financial services group.
Earnings at Investec's wealth management and broker unit in Dublin in 2017 tumbled to a meagre €284,000, compared to €6.5m in 2016.
The poor performance was mirrored by Investec's Irish holding company, which recorded an 86pc slide in pre-tax profits to €1.3m in the year ending March 2017. The accounts show the firm paid a dividend to its parent, Investec Bank plc, the group's London branch, of €5.85m last year compared to €6.4m in 2016.
The ostensible slump in earnings comes as the Johannesburg-based bank moves to jettison its Irish arm, with AIB among a number of suitors eyeing a takeover of the business.
Last month, staff were told that any decision to sell will be discussed with them prior to any announcement.
A spokesperson for Investec declined to comment on the results yesterday. However it is understood the figures present a fragmented picture of the group's performance in Ireland and despite the stark profit falls captured in the statutory accounts, the underlying Irish business is performing well.
At its interim results released in November, Investec chalked up a 10.5pc increase in its operating profit to £347.5m.
However the group stated the "combined South African businesses reported operating profit 7.9pc ahead of the prior period (in Rands), whilst the combined UK and other businesses posted a 5pc decrease in operating profit in pounds sterling".
Investec does not break out the performance of its Irish arm in its group results and it is understood only a fraction of its overall activities here are reflected in the statutory accounts. But the falling profits come as other banks stage a recovery amid strong economic growth.
The accounts for Investec's wealth management and stockbroking arm in Ireland show the bank reduced the headcount in that division to five from nine in 2016. Wage costs fell to €1,4m from over €2m the previous year.