Photograph by: KEVIN SUTHERLAND

"We think that we've come to the end of the impairments cycle," chief executive Stephen Koseff said yesterday.

"This year, we expect them to be similar to the 1.1% charge. But certainly the rate at which impairments have been coming onto our books over the past while has slowed down quite significantly."

Investec reported an 8.7% fall in adjusted earnings a share to 24p for the six months to the end of September after impairments climbed. Headline EPS dropped 13.3% to 22,2p, and operating profit fell 10.7% to £216-million.

Like its peers, Investec has been hit by rising bad debts as customers struggle to pay back loans in a recession. It operates primarily in Australia, Britain and South Africa.

Impairment losses on loans and advances, excluding its Kensington, London, business, nearly doubled to £94.3-million, and its credit loss charge on loans and advances matched its own guidance in September of 1.1%.

"I thought it was a good result, ahead of our expectations."

"Bad debt is peaking and it's come exactly in line with their recent guidance at 1.1%," a Johannesburg bank analyst said.

Koseff said signs that the financial crisis was stabilising had sparked activity in core markets and there had been an increase in customers seeking loans.

First-half core loans and advances climbed 6.9% to £17.3-billion, and the firm's deposits rose 23.6% to £18-billion.

Investec's South African operations have been hit by a drop in consumer demand as the country battles its first recession in 17 years.