24th Jan 2014 08:03
LONDON (Alliance News) - Close Brothers Group PLC Friday said it is expecting a strong result for the first-half of its financial year, as the recovering economy boosted all three of the FTSE 250 financial services firm's divisions.
In a trading update ahead of its first-half results for the six months ending January 31, Close Brothers said its positive first-quarter performance has so far carried on into the second quarter, adding that it is confident in its outlook for the full financial year.
Close Brothers' banking division, where the company last financial year made the bulk of its revenue, has continued to perform strongly, according to the statement, with an improved bad debt ratio and a broadly stable net interest margin. The loan book increased by 4.3% to GBP4.8 billion from GBP4.6 billion in the five months to December 31, meaning growth was slightly behind the 7.3% over the same period last year.
Close Brothers said it sees "good growth opportunities" for the division.
Winterflood, the UK equities-focused market maker making up part of Close Brothers' securities division, is continuing to benefit from improving market sentiment, according to the statement, as trading activity increased and investors' appetite for risk drove higher income per trade - average trades per day remain ahead of the previous year.
Close Brothers said the London Stock Exchange's Alternative Investment Market drove the increased income per trade, particularly in the first-quarter.
AIM shares have benefited of late as new UK rules mean they can be included in individual savings accounts and are no longer subject to stamp duty.
Close Brothers said German-focused Seydler - the other side of its securities division - has so far seen a performance consistent with last half-year, when it ended up with a GBP2.2 million operating profit adjusted for exceptional items and amortisation of intangible assets on acquisition.
Meanwhile, assets under management rose by 4.4% to GBP9.5 billion in the five months to December 31, as a result of both positive market movements and net inflows. Close Brothers said the division's revenue margin has remained broadly stable and the division's overall performance continues to improve.
Close Brothers has scheduled its half-year results for March 11.
Close Brothers shares are up 0.2% at 1,338.00 pence at the open Friday.
By Samuel Agini; [email protected]; @samuelagini
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