Close Brothers first half profits grow by a fifth

Close Brothers Group, the UK merchant bank, has reported pre-tax profits of £131.4m for the six months to January 31st – up by 21 per cent from the same period last year.

Banking adjusted operating profit was up by 13 per cent to £122.7m as lending income increased and the loan book grew by 1.7 per cent over the period. Year-on-year, the book is up by just under 10 per cent, which the group ascribed to a “disciplined approach to lending in a more competitive environment”.

Boosted by improving market conditions, the group’s securities business, Winterflood, returned an operating profit of £14.4m over the six months to January 31 – more than double profits posted for the first six months of 2016. In September, Winterflood posted a £19m operating profit in preliminary 12-month results to July 31.

Assets under management also grew over the period, up 3.2 per cent to £10.2bn compared with the same time last year.

The group announced it would increase the first-half dividend to 20p, up 5 per cent year-on-year.

In a separate announcement, Mike Biggs, chairman of Direct Line, the insurance group, will replace Strone Macpherson as chairman on May 1 following Mr Macpherson’s decision to retire.

Preben Prebenson, chief executive of Close Brothers Group, said:

Trading conditions have clearly been favourable in the first half, but as always our priority remains to protect, sustain and invest in our business for the long term. Our service-driven model, focused on specialist markets, has allowed us to support our clients, invest in our business and generate strong returns for shareholders over many years.