May 21, 2020 / 7:42 AM / 4 days ago

UPDATE 2-Investec Bank CEO sees no sector-wide relief to come from South African banks

* Investec to look at relief demand on “case-to-case” basis

* Bank has strong liquidity, capital to support clients

* Covid-19 impact on banks protracted, outlook challenging

* Group’s profit drops 16.8% for full yr ended March (Adds interview details)

By Promit Mukherjee

JOHANNESBURG, May 21 (Reuters) - South African banks are unlikely to join forces to offer industry-wide relief to a sector hit by the coronavirus and will assess each case individually, Investec Bank Ltd’s CEO said.

The South Africa Real Estate Investment Trust Association, which represents real estate investment firms, has approached banks for a relief package, Richard Wainwright told Reuters.

Wainwright, chief executive of the South Africa banking division of financial services firm Investec , said on Thursday that South African banks would “weigh up the demands of relief on a case-to-case basis.”

But it is unlikely that they would offer blanket relief, Wainwright said, adding that South Africa’s aviation, hospitality, real estate and retail sectors have been most severely hit by the coronavirus crisis.

Investec had already been hit by lacklustre growth in South Africa, which tipped into recession in the final quarter of 2019, and Britain’s departure from the European Union, with its specialist UK banking arm in particular struggling.

The problems have been exacerbated by the economic impact of coronavirus lockdowns in both countries, although Investec said on Thursday it has strong liquidity and capital to support its clients, while also warning that lending will be muted, impairments rise and interest income hit.

“The year ahead will be challenging. And (the) impact of COVID-19 will be protracted,” Fani Titi, Investec’s Chief Executive told a media call after reporting a 16.8% drop in full-year profit as a result of the coronavirus crisis.

The pandemic wiped 105 million pounds off its adjusted operating profit, which was 608.9 million pounds ($743 million) for the year ended March 2020, said Investec, whose adjusted earnings per share were 46.5 cents, versus 60.09 a year earlier.

The company’s shares fell 2.83% in Johannesburg, while the benchmark all share index dropped 0.5% by 1230 GMT. ($1 = 0.8200 pounds) (Reporting by Promit Mukherjee; Editing by Jason Neely and Alexander Smith)

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