Close Brothers loan book grows in Q3 despite 'heightened uncertainty'
By Iain Gilbert
Date: Friday 20 May 2022
(Sharecast News) - Merchant banking group Close Brothers said on Friday that it had "performed well" in the third quarter of its trading year.
Close Brothers reported loan book growth of 1.8% in its banking division to £8.8m, driven by continued good new business volumes in the commercial and motor finance streams. Year-to-date net interest margins remained broadly flat at 7.8%.
The FTSE 250-listed firm said client assets reduced in its asset management unit, reflecting negative market movements, while its Winterflood subsidiary saw an improvement in trading income in the period.
Close Brothers' Common Equity Tier 1 ratio was 14.9% on 30 April, slightly down from the 15.1% seen on 31 January but well above applicable minimum regulatory requirements.
While Close Brothers had not yet seen a direct impact of deteriorating economic conditions on its customers, in particular rising inflation, its year-to-date bad debt ratio increased marginally to 1.2%, reflecting the recognition of higher IFRS 9 provisions to take into account the cautious outlook for the external environment.
Chief executive Adrian Sainsbury said: "We have performed well in the quarter, with continued good momentum across our lending businesses and robust demand in our core markets.
"We continue to support our customers and clients and maintain our strategic discipline against a backdrop of rising inflation and heightened uncertainty. We are confident that our proven and resilient business model will allow us to continue delivering on our long-term track record of growth and profitability."
Reporting by Iain Gilbert at Sharecast.com
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