Investec Exits Australia to Expand U.K., South African Units

JOHANNESBURG (Capital Markets in Africa) — Investec Group is exiting Australia as the South African and U.K. specialist bank and wealth manager focuses on expanding existing operations.

“We are winding down the business in Australia to focus on building scale and relevance in our core markets,” the London- and Johannesburg-based lender said by email. “This is in line with our stated strategy to bring clarity, simplicity, and focus to every aspect of Investec.”

The company will transfer clients to the U.K. over the next 12 to 18 months, Investec said. About 98 employees will be affected, it said.

Investec is seeking to diversify revenue sources for its existing businesses after earlier this year spinning off most of its holdings in a money manager now known as Ninety One. The lender is using digitization to scale up in areas where it can compete, such as private, business, and investment banking, specialist finance, and wealth management.

The leadership of the lender’s corporate advisory team in Australia plans to spin themselves out of the operation and create another venture in the country, Ciaran Whelan, managing director of London-based Investec Plc and the chief executive officer of Investec Wealth & Investment U.K., said by phone.

“We would help them to do that if it makes sense for them, but we won’t have a shareholding or a financial connection as such,” he said.

‘Peripheral Places’
The Australian Financial Review earlier reported on Investec’s plans to retreat from the country, saying that offices in Sydney, Melbourne and Brisbane will be closed.

Investec, which was founded in Johannesburg in 1974, opened its Australian business in 1997. The unit there accounts for less than 3% of the credit extended by Investec in the year through March, according to Investec’s latest annual report.

Apart from its foothold in South Africa and the U.K., the lender also has a presence in a few other locations, including the U.S., India, the Channel Islands and Mauritius.

In New York, where its operations focus mainly on project and infrastructure finance to the energy sector, the group would like to grow its business, Whelan said. In India it has entered a joint venture with the State Bank of India.

“It’s mainly the U.K., South Africa and then these peripheral places that suit the business lines that we have, and suit what our clients need in terms of where they want their money managed, or where they want to be based,” Whelan said. “We don’t see any other major rationalization.”

Source: Bloomberg Business News