(Alliance News) - Investec PLC and Ltd said on Wednesday it expects a "solid" financial performance, underpinned by diversified revenue streams and a gain from the recent Rathbones deal.

In a trading update, the Sandton, Johannesburg-based financial services firm expects earnings per share to rise to a range of between 102.9 pence and 106.8p for the financial year ending March 31 from 85.8p the year before, due to a gain from the Rathbones merger in the UK.

In September last year, Rathbones Group PLC completed an all-share combination with Investec Wealth & Investment Ltd, which had been a UK division of Investec.

Adjusted earnings per share is likely to rise to between 76.0p and 80.0p, compared to 68.9p, Investec said. Headline earnings per share, which excluded strategic actions, is seen ranging between 70.0p and 74.0p from 66.8p.

Adjusted operating pretax profit is guided to a range within GBP866.9 million and GBP909.6 million, versus GBP818.7 million.

Investec said its diversified revenue streams and the success of its client acquisition strategies across its franchises had continued to underpin a solid performance, despite the uncertain macroeconomic environment and persistent market volatility that prevailed.

A "strong" balance sheet and successful strategic execution since 2019 had allowed Investec to achieve its 2024 and medium-term financial targets, it said.

For the 11 months that ended February 29, Investec said core loans in Specialist Banking increased 1.6% annualised to GBP30.8 billion from GP30.4 billion for the full financial year that ended March 31, 2023. Customer deposits remained flat at GBP39.5 billion compared to GBP39.6 billion.

Funds under management in Southern Africa rose by 3.6% to GBP20.5 billion as at February 29 from GBP19.8 billion at March 31, 2023. In the Southern African business, net discretionary inflows of ZAR16.4 billion were partly offset by net outflows of ZAR3.0 billion in non-discretionary funds under management.

Funds under management at Investec Wealth & Investment UK is now reported as part of Rathbones, following the completion of the combination in September. As at December 31, Rathbones reported funds under management and administration of GBP105.3 billion.

Investec plans to publish its full annual results on May 23.

Shares in Investec were up 3.0% to 505.60p in London on Wednesday morning. In Johannesburg, Investec Ltd shares were up 1.9% at ZAR119.91, and Investec PLC was up 2.7% at ZAR121.21.

By Artwell Dlamini, Alliance News reporter

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