S.Africa's Investec flags up to 71% drop in interim profit
Investec says impact of pandemic on key markets hurt performance
Expects interim profits to fall by between 64% and 71%
Plans to cut 210 jobs in the UK
Says interim dividend unlikely
JOHANNESBURG, Sept 18 (Reuters) - South Africa's Investec INVP.L, INLJ.J warned on Friday its half-year profits could fall by up to 71% citing the impact of the coronavirus crisis and some tax effects.
The financial services firm's main markets, the United Kingdom and South Africa, have been hard hit by the pandemic, with the latter enforcing one of the world's strictest lockdowns in March.
Investec said the crisis had seen severe economic contractions, volatile financial markets, lower interest rates and a depreciation in the South African rand versus pound sterling, hitting its performance.
CEO Fani Titi said provisions for expected credit losses were likely to remain elevated, but Investec's capital and liquidity ratios were robust.
"The business is well-positioned to support its clients through this challenging environment," he said.
Investec expects its adjusted earnings per share, which reflect profits on ordinary operations, to be between 8.3 pence ($0.1076) and 10.5 pence, compared to 28.9 pence a year earlier.
It said "effective tax rate normalisation" and the March demerger of its asset management business, Ninety One N91.L, also affected its performance.
It plans to cut around 210 jobs, or 13% of its UK-based bank's London headcount, it said.
It also does not expect to declare an interim dividend following guidance from both British and South African regulators regarding shareholder payouts.
($1 = 0.7712 pounds)
(Reporting by Emma Rumney; editing by Olivia Kumwenda-Mtamob and Jason Neely)
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