Rathbones Group has announced that its net operating income has increased over the third quarter, and the company is confident in meeting its operating margin guidance for 2023 and 2024. The integration of Investec Wealth & Investment's U.K. business is progressing well.
For the three months ending September 30, Rathbones recorded a net operating income of £120.4 million ($146.2 million), marking a 6.5% increase compared to the previous year. This growth was driven by higher fees and increased interest income, partially offset by lower commissions.
With the addition of Investec Wealth & Investment, Rathbones' funds under management and administration reached £100.68 billion at the end of the quarter. Excluding the acquisition, the company's funds under management and administration stood at £59.90 billion, slightly down from £60.53 billion three months earlier.
During the quarter, Rathbones experienced net outflows of £237 million, and negative market and investment performance totaling £396 million. The company attributed these trends to clients choosing to repay debts or hold cash in the short term amidst a challenging market backdrop. Despite this, Rathbones continues to see strong gross inflows.
"We are confident in delivering the synergies associated with the IW&I transaction, together with our 2023 and 2024 operating margin guidance for the enlarged Rathbones group," said Chief Executive Paul Stockton.
In July, Rathbones stated that it expects an underlying operating margin percentage in the low 20s for 2023 and in the high 20s for 2024, anticipating a rise to 30-plus in the medium term due to the integration.
