Close Brothers says difficult conditions remain

21st May 2009 07:49

Merchant bank Close Brothers said it continues to face difficult conditions in its asset management and banking divisions but is confident that it will continue to deliver a 'satisfactory' performance in the current markets.Total funds under management (FuM) were marginally lower at £6.8bn as at 30 April compared with £6.9bn as at 31 January, while management fees as a % of FuM continued to reduce slightly reflecting the ongoing impact of product mix changes. In addition, lower margins on deposits in the current low interest rate environment have continued to affect income on assets under administration and deposits.The banking division has experienced a further rise in bad debt provisions across the loan book. The loan book has remained flat at £2.32bn as at 30 April 2009 from £2.31bn as at 31 January. The net interest margin in the lending business has remained solid, although Treasury income has been impacted by higher funding costs and lower margins on deposits.