Investec continues to recruit aggressively, might even transfer businesses to SA

South African banks are not in happy place at the moment, bracing themselves for a difficult year of low credit demand and high impairments and trying to cut costs. Confidence among retail bankers fell to a nine-year low in the first quarter of the year. The threat of job cuts is in the air and Sasbo, the financial services sector union, is ready for a fight.

How refreshing, then, to have one bank bucking the negative trend. Investec, which has dual listings in Johannesburg and London, has just positive annual results. Five out of six divisions did well. Private banking remains the black sheep, but impairments from the sector have now peaked. "I think we have taken the bulk of the hiding," says MD Bernard Kantor. "The group is on the right footing." Investec's decision to invest in asset management and wealth management to boost earnings seems to have paid off and the two sectors now contribute around 40% of total profits.

Costs have risen over the year due to acquisitions and increased headcount. "Investec has taken advantage of the dislocation that occurred in financial markets to attract talented people and extend brand awareness," says Kantor.

But, much as Investec wants to trim costs, making acquisitions and recruiting talent are two trends which are in its DNA and unlikely to disappear any time soon.

"Investec, unlike other banks, is doing very well and it continues to be aggressive in the recruitment field," says Alison Thom, senior consultant at Anton Apps International Recruitment Specialists in South Africa. "They are hiring quite a few people both in Johannesburg and Cape Town."

Investec has also hinted at the possible transfer of some of its investment banking operations, notably structured finance and acquisition finance, away from the UK following regulatory changes to be recommended by the Vickers review in September.

The bank's South African home may seem the obvious place to transfer these operations and many in the country are hoping this will be the case. But Ursula Nobrega, head of investor relations, warns that the move "is purely hypothetical at present. There is no definitive plan and no decisions have yet been taken."