Investec Asset Management, which is being spun off from the parent business, has seen a 7.3% rise in AUM to £111.4bn as a result of strong net inflows of £6.1bn during the year to 31 March, as well as favourable market and currency movements.
However, adjusted operating profit only saw a small increase of 0.7% to £179.4m, as earnings were hit by lower performance fees in South Africa and higher costs in the UK, including ongoing business investments, new premises and MiFID II related expenses.
Investec Asset Management is being demerged and listed separately following a strategic review and will continue under the leadership of Hendrik du Toit as executive chairman.
Meanwhile, the wealth management arm of Investec suffered a 16.2% drop in adjusted operating profit during the period. The figure came in at £82.6m, down from £98.6m during the previous financial year.
The fall was partially the result of a non-recurring investment gain realised in the previous year. Additionally, the firm decided to shut down its Click & Invest online investment platform following a review, in an effort to manage costs and allocate capital effectively.
The service suffered an underlying operating loss of around £12.8m in the latest financial year, and £13.5m the year before, while the latest period also included a £6m write-off of capitalised software.
The group said it "remains committed to developing its digital initiatives and will look to incorporate the technology into its offering".
Flows for the wealth and investment division came in positive at £400m, but total AUM dropped by 1.7% to £55.1bn by 31 March, mainly as a result of currency and market movements.
Fani Titi and Hendrik du Toit, joint CEOs of Investec, said: "We are implementing our strategy to simplify, focus and grow with discipline. We are committed to the demerger and listing of the asset management business and the positioning of the bank and wealth business for long-term growth.
"In spite of a challenging operating environment, these results speak to strong support from our clients."
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