17th Mar 2021 11:08
(Correcting article on March 16 to clarify that Winterflood is a market-maker providing execution services to stockbrokers, wealth managers and institutional investors.)
(Alliance News) - Close Brothers Group PLC on Tuesday delivered a "strong" performance in the first half of its financial year, with profit increases driven by "high" new business volumes across the group.
Close Brothers is a London-based merchant banking group, providing lending, deposit taking, wealth management and securities trading.
The group's operating pretax profit for the six months ended January 31 was GBP127.0 million, up 2.3% from GBP124.1 million the previous year, while adjusted operating profit rose 2.2% to GBP128.5 million in the six-months period from GBP125.7 million.
These increases reflected "high" new business volumes in the lending business, "solid" net inflows in Asset Management, and a "very strong" trading performance in Winterflood, which is a market-maker providing execution services to stockbrokers, wealth managers and institutional investors.
Close Brothers' loan book increased by 4.4% in the first six months of the year to GBP7.95 billion from GBP7.62 billion, reflecting a "strong" demand for loans issued under the Coronavirus Business Interruption Loan Scheme and "significant" new business volumes in the Motor Finance division.
As a result of its solid performance in the first half of the year, and continued confidence in its business model and financial position, the company said, it has reinstated its interim payout, declaring a dividend of 18.0 pence, after none a year before.
"We delivered a strong performance in the first half of the year in the context of current market conditions, with the positive trends seen at the end of the last financial year continuing, delivering a return on opening equity of 13%. We are navigating a challenging external environment successfully by supporting our customers and clients and maintaining the key strengths of our business model, whilst maximising the opportunities available to us," said Close Brothers.
Looking ahead, Close Brothers said its credit performance remains "stable", reflecting the quality of its loan book supported by the ongoing UK government schemes for consumers and small and medium-sized enterprises.
"Nevertheless, the full impact of Covid-19 still remains highly uncertain. Against this backdrop, we are committed to maintaining the discipline of our business model, and our readiness to respond to opportunities and changes in market conditions," said Close Brothers.
Shares in Close Brothers were down 0.6% at 1,653.00p in London on Wednesday in midday trade.
By Zoe Wickens; [email protected]
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