Investec will spend R7-billion over the next 18 months buying back its shares, the banking and wealth management group said during the release of its financial results for six months to September on Thursday.
The Johannesburg and London-listed group said funds under management decreased 7.6% to £59-billion (R1.2-trillion), “reflecting the year-to-date decline in global markets”.
Investec further said net core loans grew 7.1% annualised to £31-billion on the back of “corporate lending in both core geographies and UK residential mortgage lending”.
The group’s revenue grew 18.9% in the period under review, while pre-provision adjusted operating profit increased 29.5% to £435.2-million, in what the company said demonstrates the strength and diversity of its client franchises.
Fani Titi, Group CEO, said the group’s earnings growth momentum continued, underpinned by strong revenues from its diversified client franchises and a focused approach to support its clients.
“We have made good progress on our capital optimisation strategy, as we seek to return excess capital from the South African balance sheet to shareholders. Today, we announce our intention to purchase and buy back up to R7-billion of our shares,” Titi said.
A share repurchase is a decision by a company to buy back its own shares from the marketplace. A company might buy back its shares to boost the value of the stock and to improve the financial statements. Companies tend to repurchase shares when they have cash on hand and the stock market is on an upswing.
Titi also hailed the board’s decision to reward shareholders.
“I am also pleased that the board has proposed an interim dividend of 13.5p [pounds] per share, a 22.7% increase on the prior period.
“We have strong liquidity and capital levels and are well-positioned to support all our stakeholders, including our clients, our people, and communities around us. We are proud of the progress we are making to entrench sustainability across every aspect of our business.”
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