Close Brothers says bad debts are falling as it signals strong start to year

CLOSE BROTHERS, the merchant bank, has made a strong start to its financial year as funds under management grew and the loan book increased and bad debts fell.<br /><br />The 131-year-old bank, which financed the first railway in Alaska, said its loan book had grown by three per cent to &pound;2.43bn in the three months to October 31 and interest margins remained strong.<br /><br />Close Brothers said bad debts had fallen from a cycle high of 3.1 per cent of average loan book but did not put a figure on where it was at in the first quarter.<br /><br />In terms of the outlook for loan defaults Close Brothers warned that the climate was &ldquo;uncertain&rdquo;.<br /><br />Treasury income continues to be impacted by lower margins on deposits.<br /><br />This month the bank launched three new Premium Gold accounts which require a minimum &pound;10,000 deposit to cash in on high demand for fixed rate savings accounts.<br /><br />Close Savings is targeting some of the &pound;22bn which is believed to have matured between May and October 2009 from other savings institutions.<br />