Banking boosts Close Brothers in weak markets

Close Brothers remains confident of a strong performance in 2015 after delivering an upbeat interim management statement for the first quarter of its financial year to the end of October.

Banking boosts Close Brothers in weak markets


Assets under management in its asset management division remained stable at £9.7bn as net inflows were offset by negative market movements. “The revenue margin has remained broadly stable on the prior financial year,” the group added.

In banking, Close Brothers, grew its loan book 2.3% to £5.4bn. It said, this was the result of good demand in property and asset finance that offset slower growth in its motor finance business. It also improved both its net interest margin and bad debt ratio over the quarter.

Its securities business, Winterflood, had a less impressive quarter, as it struggled with increased market volatility and reduced appetite for risk from investors. Winterflood’s average bargains per day remained stable, the group said, but income per bargain fell significantly.

“As previously announced the group has agreed to sell Seydler, subject to regulatory approval in Germany, and therefore its results will be treated as a discontinued operation,” Close Brothers said.

James Hamilton of Numis Securities said of the results: “Overall we do not expect to materially change our forecasts with a Securities downgrade offset by a banking upgrade. With the shares valued at 12.5x 2015 earnings we believe they offer fair value.”



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