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Investec warns on first-half profit as costs bite

The company's shares fell as much as 10% in early deals. As of 0709 GMT, the stock cut some losses to trade down 4.2% at 468.8 pence, but was still the biggest loser on UK's midcap index.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Investec Plc warned on Friday that its profit for the first half of the year was expected to fall on higher costs as the investment bank overhauls its business amidst uncertainties ranging from Brexit to the ongoing global trade war.

The company's shares fell as much as 10% in early deals. As of 0709 GMT, the stock cut some losses to trade down 4.2% at 468.8 pence, but was still the biggest loser on UK's midcap index.

Investec, which provides asset management and specialist banking services, has been streamlining its operations by selling and shutting some units and restructuring businesses in Ireland ahead of Britain's impending exit from the European Union.

Investec Plc

Sell: 431.50 | Buy: 432.00 positive 1.50 (0.35%)
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Prices delayed by at least 15 minutes.

"Market variability and persistent uncertainty relating to Brexit and global trade wars, has negatively impacted investment banking fees and trading income," Investec said as it warned that its UK specialist banking unit's profit would be "significantly" behind.

It now expects headline earnings per share to be 15% to 18% lower for the six months ending Sept. 30, and said it would take a hit of about 42 million pounds ($52.81 million) to pretax profit in the period.

The company, which also has operations and a listing in South Africa, said its earnings were also hurt by the depreciation of the rand against the sterling.

Investec, founded in 1974, expects to float its asset management unit next year and said on Friday the plan was on track.

($1 = 0.7954 pounds) (Reporting by Pushkala Aripaka in Bengaluru Editing by Saumyadeb Chakrabarty)


Copyright (2019) Thomson Reuters. This article was from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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