Close Brothers weighed down by slow market

Michael Bow
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FINANCIAL services group Close Brothers yesterday delivered a good set of results for its lending and money management divisions but its market making side continued to disappoint.

The 134 year old independent bank, listed on the FTSE 250, grew its loan book by boosting lending to small businesses. It increased its assets under management three per cent to £8.5bn for the five months ending 31 December, it said.

Its troubled securities division Winterflood Securities continued to be plagued by low trading volumes currently hitting all firms in the sector. Average bargains per day were lower versus a year earlier, while income per bargain was “broadly unchanged”.
The group, led by Preben Prebensen, is expected to reveal more details when it publishes its interim results in March. Shares remained flat in trading yesterday, masking a 12 per cent climb in the stock price since the start of the year.

Analyst Robin Savage at Canaccord Genuity said: “This pre-close statement confirms its banking division continues to grow profitably; its securities should be seen in the context of current market conditions; we view Close Asset Management as immaterial to CBG’s share price.”

Close, which started life in 1878 making farm mortgage loans in the American state of Idaho, said it grew its current banking division’s loan book by six per cent, up to £4.4bn, but with a lower net interest margin than last year.

The company said its asset management arm would move into profitability this year.