Close Brothers property success outweighs weak markets income

 
Tim Wallace
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(Source: Getty)
FINANCE house Close Brothers reported strong property finance incomes in the first quarter of its financial year, benefiting from the UK’s economic recovery.

Its asset finance arm also performed well, taking the loan book across the two units up 2.3 per cent to £5.4bn.

Its asset management arm held steady in the three months to 31 October, as inflows offset falls in markets it invests in. Overall assets under management held up at £9.7bn.

But its market making arm Winter­flood was hit hard by a lack of trading activity.

“Reduced investor risk appetite and increased market volatility in October have resulted in a significant decline in income per bargain,” the firm said.

Analysts were impressed by the figures.

“Close Brothers has generally and consistently stuck to its core niche markets-and-return philosophy. It avoided the excesses of the bubble years and performed relatively well through the credit crisis,” said James Hamilton from Numis.

“Close is good to own through the cycle. We believe Close should command a premium valuation of normalised return on equity.”

Close Brothers’ shares rose 1.57 per cent on the day.