21st May 2025 10:13
(Alliance News) - Close Brothers Group PLC on Wednesday said its loan book decreased in the third quarter with lower activity in some of its businesses.
The London-based bank, broker and asset manager said its loan book in Banking fell 3.5% in the year to date to GBP9.7 billion at the end of April from GBP10.1 billion at the end of July 2024.
The firm noted reduced activity in some of its Asset Finance businesses, alongside increased levels of repayments in Property.
It said this was partly offset by growth in Invoice Finance and a recovery in new business volumes in Motor Finance to levels seen before the pause in lending last October.
Close Brothers said it expects its loan book to be "broadly flat" at the end of the financial year on its position from the end of January, at GBP9.8 billion.
Net expenses were up 20% for the group's central functions to GBP13.9 million in the third quarter from GBP11.6 million a year ago, due to higher professional fees and expenses due to the Financial Conduct Authority's review of motor finance commission arrangements and the associated appeals in the Supreme Court.
Close Brothers said it is awaiting the outcome of the Supreme Court appeal of the case.
The annualised year-to-date net interest margin was 7.1%, down from 7.3% in the first half of the year. It expects the full-year net interest margin to be around 7%.
Close Brothers said it is looking to make annualised savings of GBP25 million by the end of the financial year.
It said Winterflood reported an operating profit of GBP400,000 in the third quarter, down 76% from GBP1.7 million a year ago.
The firm added that it expects its CET1 capital ratio above its medium-term target range of between 12% and 13% by the end of the financial year, as it hit 14.0% at the end of April.
Chief Executive Mike Morgan said: "The group's performance in the quarter highlights the strength of our business model, as we generated a CET1 capital ratio of 14.0%. The Banking division delivered a resilient performance, Winterflood saw some benefit from heightened market activity, and we maintained our strong funding and liquidity positions.
"We are taking proactive steps to ensure that the group is well positioned to generate strong, sustainable returns once the motor finance commissions uncertainty has been resolved," Morgan added.
Shares in Close Brothers were down 2.8% to 359.99 pence in London on Wednesday morning.
By Michael Hennessey, Alliance News reporter
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