(Alliance News) - Investec PLC and Ltd on Thursday reported substantially higher interim profit, driven by rising global interest rates and client acquisition.

For six months that ended September 30, pretax profit for the Sandton-based financial services provider was at GBP506.8 million, up 90% from GBP266.3 million in the prior year.

Despite volatile market conditions, Investec said, revenue rose by 19% to GBP1.13 billion from GBP951.1 million.

But funds under management decreased by 7.6% to GBP59.0 billion as at September 30 from GBP63.8 billion as at March 31, caused by the decline in global markets.

Investec recorded net inflows of GBP202 million. It said this was despite elevated market volatility, which results in subdued client activity and delays in investment decisions. Net inflows of GBP464 million in discretionary funds was partially offset by net outflows of GBP261 million from non-discretionary funds.

Investec declared an interim dividend of 13.5 pence, up 23% from 11.0p.

Basic earnings per share doubled to 50.6p from 25.0p, while headline earnings per share jumped by 30% to 32.0p from 24.7p.

"The group's earnings growth momentum continued, underpinned by strong revenues from our diversified client franchises and a focused approach to support our clients," said Chief Executive Fani Titi, adding: "Rising global interest rates, client acquisition and strong asset quality supported these results."

Investec announced that it intends to buy back up to ZAR7 billion of its own shares. This was sharply higher than its plan announced early last month to buy back ZAR1.2 billion worth.

The financial services group said it was firmly committed to its medium-term targets and was well positioned to pursue growth initiatives in its chosen markets.

In its financial 2023 full-year guidance, it expects revenue to be underpinned by rising interest rates, loan book growth, and client activity

Return on equity is projected to remain within the group's target range of between 12% and 16%. In the first half, ROE was at 13.0%, compared to 11.2% in the same period last year.

Investec shares were down 2.5% at 459.30 pence early Thursday in London. They were down 0.5% at ZAR95.18 in Johannesburg.

By Artwell Dlamini; artwelldlamini@alliancenews.com

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