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.
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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."
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