'Solid' but mixed start for Close Brothers

Close Brothers, the FTSE 250 specialist financial services firm, said it has made a solid start to its financial year though it did highlight a 'challenging' environment in its Securities division.

Close Brothers, the FTSE 250 specialist financial services firm, said it has made a solid start to its financial year though it did highlight a 'challenging' environment in its Securities division.

The performance of Securities has "remained slow", the group said in its first-quarter trading update covering the period between August 1st and the end of October.

Its market-making division, Winterflood, continues to be affected by a low-volume trading environment, with average bargains per day down on last year. Meanwhile, its Germany operation, Seydler, has also been hit by low volumes though capital market activity is said to have increased.

Elsewhere, Close Brothers' Banking division performed strongly during the first quarter with the loan book rising by 4% to £4.3bn, mainly as a result of growth from motor finance, asset finance and property. However, net interest margin decreased as expected due to changes in the product mix.

In Asset Management, the company said that it has made good progress as it "moves towards profitability", with assets under management up 2% to £8.5bn.

"Overall the group remains well positioned for the remainder of the financial year," Close Brothers said.

"The Banking division continues to see prospects for growth and Asset Management remains on track to move into profitability during the course of this financial year.Winterflood continues to be affected by difficult trading conditions but remains well placed for when market conditions improve."

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