Close Brothers reports solid start to year

CLOSE Brothers said overall performance during the first quarter was solid yesterday, driven by good loan book growth on continued demand for its specialist lending services.

The merchant bank said its loan book stood at £3.1bn at the end of October compared to £2.9bn three months earlier, an increase of seven per cent. It said it also remained positive about the outlook for the full financial year.

However, Close said its bad debt ratio grew slightly compared to the first six months of the year due to a problem property portfolio although it said it expected its bad debt ratio to be lower by the end of the 2011 financial year.

The bank’s asset management division made a small loss as it continued to invest for future growth, particularly in private clients. Total funds under management increased 14 per cent to £8.5bn at 31 October 2010, compared to £7.4bn three months earlier reflecting the acquisition of the Chartwell Group and market movements.

Close Brothers said its securities division had recorded sound performance although its derivatives trader, Mako, had been subdued due to lower volumes and volatility.