The Australian Prudential Regulation Authority (APRA) has revoked the licence for Investec Bank plc (Investec) to operate as a foreign authorised deposit-taking institution (ADI).
The group, which was first granted its banking licence in 2019, had been operating in Australia for more than 20 years as a non-bank subsidiary of its parent group, providing advice and capital to companies in the resources, power, infrastructure and property sectors.
The Australian subsidiary of UK-based Investec Bank plc had originally wanted a banking licence to be able to offer clients “full access to its parent’s balance sheet and specialist capabilities”. It therefore applied for a licence in 2019, which was granted.
However, it has since announced that it would be pulling out of the Australian market.
In a statement on its website, the Investec Group said it had taken the “strategic decision to exit Australia” so it can “focus on building scale and relevance in its core markets of the UK and South Africa”.
“This is in line with its stated strategy to clarify, simplify, and focus the business,” it said.
The statement continued: “This decision was not taken lightly and is not a reflection on the performance of the Australian business, or its employees, which have performed strongly, especially over the last five years.
“The decision to leave Australia reflects a shift in the group’s broader strategy.
“Investec Australia now intends to fully transition the loan book, associated derivative positions, and its investment portfolio to the UK with clients continuing to be supported by the Investec global team. This transition should have no impact on clients and their deals.”
The group said that it was also in “advanced discussions” to externalise a number of businesses other than Corporate Advisory, where it has reached agreement to spin it out.
Under the new model, Investec Corporate Advisory will run as an independent advisory firm, owned by the senior leadership team and “will continue as an affiliate within Investec’s international network of Investment Banking offices and partners”, it said.
The group noted that its team in Sydney and London would work to “deliver a smooth transition” for its clients and business.
Given the group’s decision to exit Australia, APRA has now revoked the licence for Investec to operate as a foreign ADI under the Banking Act 1959.
The decision was reportedly made at Investec’s request.
[Related: Foreign lender granted banking licence]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.