Investec says trading conditions have weakened

LONDON (Reuters) - Investment bank and asset manager Investec Plc (INVP.L: Quote, Profile, Research, Stock Buzz) (INLJ.J: Quote, Profile, Research, Stock Buzz) said it was on track to deliver solid growth in annual operating earnings despite a recent weakening in trading conditions.

The firm also said it would take an impairment charge of between 50 million and 60 million pounds ($120 million) on the goodwill for its 273 million pound share and dividend purchase last May of UK sub-prime lender Kensington.

It will also take an additional 10 million pound writedown on its U.S. structured credit portfolio.

Investec said the credit squeeze and sliding market confidence was continuing to hit the company.

"Trading conditions have steadily weakened in the five months since our half-year end and most notably in the first quarter of 2008," Investec said in a statement.

"This has resulted in a decline in activity levels particularly within our UK and Australian operations."

Investec shares, which have more than halved in value since hitting a peak of 785 pence last May, were unchanged 319-3/4p by 0915 GMT. They touched a near 3-1/2 year low of 284-1/4p earlier this week.

Since March 31 2007 it said core loans and advances had grown by 28.4 percent to 12.8 billion pounds, although the current market environment had fuelled an increase in defaults and impairments.

(Reporting by Mark Potter and Marc Jones; Editing by Chris Wills and David Holmes)