Close Brothers profits up despite securities headache
Close Brothers, the banking, securities and asset management firm, saw profits rise after its banking division compensated for a big fall in its securities business.
Close Brothers, the banking, securities and asset management firm, saw profits rise after its banking division compensated for a big fall in its securities business.
The firm reported pre-tax profits of £66.8m in the six months to the end of January, up from £58.3m the year before.
Its banking division reported a strong performance with adjusted operating profit up 27% to £61.8m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The bank, which lends mainly to UK small and medium-sized companies and individuals, noted its bad debt ratio improved substantially to 1.7%, from 2.4% the year before.
But it was a different story at its securities division where profits fell 58% to £13m.
The firm blamed this on a flight from risk by retail investors and a resulting reduction in trading activity, particularly in smaller, less liquid stocks.
After exceptional items and amortisation, basic earnings per share came in at 34.8p, compared to 29.4p in 2011.
This included £5.9m of exceptional income largely related to foreign exchange gains when it sold part of its investment in market maker Mako in October.
The firm declared an ordinary interim dividend of 14p per share, a 4% increase on the 13.5p interim dividend last year.
"Economic and market conditions remain uncertain but the group's businesses are well positioned," Close Brothers said in a statement.
"The banking division continues to see good opportunities for growth and expects a further strong performance in the second half," the firm said.
"The securities businesses remain well positioned for any recovery in financial markets and have seen early signs of improvement in trading conditions since the start of the second half."
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Taking control of your business expenses with Wallester
Why Wallester Business is your cost-effective solution to help you take financial control of your business
By MoneyWeek Published
-
Four AI ETFs to buy
Is now a good time to buy AI ETFs? We examine four AI ETFs that investors might want to add to their portfolio
By Dan McEvoy Published