Investec profits fall but sees worst of crisis over

JOHANNESBURG (Reuters) - South African investment bank and asset manager Investec (INLJ.J) saw full year profits fall as the economic storm hit its loan book and asset portfolio, but it forecast brighter weather ahead.

The company, which is also listed in London (INVP.L), said on Thursday adjusted earnings per share for the year to end March fell 25.5 percent to 42.4 pence, in line with its forecast of a 22-30 percent drop.

Operating profit at its private banking unit fell by 51.6 percent to 80.5 million pounds, and dropped 11.8 percent at its private client portfolio management and stockbroking business.

It said impairment losses on loans and advances, excluding the Kensington Group business acquired in August 2007, soared to 162.9 million pounds from 58.8 million, reflecting an increase in the bad loan rate to 3.3 percent from 1.3 percent since March 2008.

"The earnings number was in line with our expectations. Nothing surprising there ... Impairments were quite bad, they rose significantly," one Johannesburg-based bank analyst said.

"Private banking operating income has come under a huge amount of strain across both geographies, both the UK as well as Africa."

Group operating profit rose 4.8 percent.

Unlike South Africa's main domestic lenders, Investec had some exposure to the U.S. subprime market, though analysts have said it is unlikely to suffer the huge losses seen at some of its international counterparts.

Managing Director Bernard Kantor said the firm's prospects appeared to be improving.

"I think the (worst) of the storm definitely has been the last quarter of last year and the first quarter of this year," he told Reuters.

Investec's shares fell 2.4 percent to 42.30 rand by 0850 GMT (9:50 a.m. British time), in line with the JSE Top-40 index .JTOPI, and were down 3.9 percent to 318 pence in London.

(Reporting by Serena Chaudhry; editing by John Stonestreet)