Close Brothers confident of good first half

22nd Jan 2010 07:30

Merchant bank Close Brothers said it remains confident that it will deliver a good overall result for the first half and a solid outcome for the full year, but cautioned that this will depend on the prevailing economic environment and financial market conditions.In the five months to 31 December, the group had a good performance overall thanks to a strong performance in its banking and securities divisions. Close Brothers said its banking division had a strong performance helped by good demand for its specialist lending services and a stabilising economic environment. As at 31 December 2009, the loan book increased 5% to £2.48bn (31 July 2009: £2.36bn). However, the group cautioned that the outlook for bad debts remains uncertain and sensitive to the economic environment.The asset management division had a more modest start to the year, according to the group. Total funds under management increased 8% to £7.39bn as at 31 December (31 July: £6.84bn), but income on assets under administration and deposits continues to be affected by the current low interest rate environment. Close Brothers added that the overall result reflects increased investment spend to support ongoing growth initiatives in the division's private clients business.The securities division has continued to perform well. After a strong first quarter, Winterflood has seen a slower November and December but overall average bargains per day have been broadly in line with the second half. Performance at Close Brothers Seydler has been resilient although Mako is seeing lower activity levels in the current low volatility environment.