LONDON (ShareCast) - (Sharecast News) - Merchant banking group Close Brothers said on Tuesday that full-year profits had fallen in 2019 on the back of a weaker performance in its banking business amid a lower interest rate environment.
Close Brothers posted pre-tax profits of ?124.1m for the twelve months ended 31 January, an 8% fall year-on-year. The lower profits came despite revenues increasing by 12% to ?65.7m.

Banking adjusted operating profit fell 12% to ?115.4m, reflecting "modest income growth" and the normalisation of some bad debts and ongoing investments.

Close Brothers' net interest margin contracted to 7.8% from 8.1%, while its common equity tier ratio expanded to 13.4% from 13%.

The FTSE 250-listed company reported a 7% drop in basic earnings per share but did declare an interim dividend per share of 22.7p - up 3% year-on-year and in line with its progressive dividend policy.

Chief executive Preben Prebensen said: "We are confident that our resilient business model and the deep experience of our people leave us well placed to navigate the current uncertainty, and to continue serving our customers and clients in a range of market conditions."

Close Brothers also acknowledged that the near-term outlook for the British economy remained "uncertain", heightened by escalating concern about the Wuhan coronavirus outbreak and its potential impact on businesses and financial markets.

As of 0855 GMT, Close Brothers shares had dipped 0.44% to 1,133p.

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