Close Bros bank makes record profit

28th Sep 2010 07:42

Close Brothers has had a "good" result for the full-year, driven by strength at the banking business, and the merchant bank expects a "satisfactory" outcome for 2011.Adjusted operating profit from continuing operations rose 7% to £121.3m in the year ended 31 July. Operating profit before tax was up 12% to £99.3m despite exceptional charges of £15m linked to two bad investments, up from £6m in 2009. A goodwill impairment of £6.5m in Asset Management was less than last year's £19m.The banking division made a record adjusted operating profit of £79.5m, up from £54m a year ago, while the loan book increased 23% to a best-ever £2.9bn and impairment losses on loans and advances fell from 2.6% to 2.4%.A better performance from market maker Winterflood and Seydler Bank helped the securities unit make a £59.3m profit, though that was down from £64.9m last year when Mako had an exceptional year. Winterflood posted a profit of £48.7m, up 3% and its best for 10 years.It was a "subdued" period for the asset management division where adjusted operating profit sank to £3.3m from £12m as it began "a period of transformation and investment for future growth". Funds under management grew 9% to £7.4bn.Looking ahead, it's been a "sound start" to 2011, with continued good loan book growth in banking, although it's been a "more modest" beginning for securities and asset management and a small loss is likely at asset management."Overall, we expect the group to deliver a satisfactory performance for the year," the firm said.The dividend is kept at 39p a share.