Close Brothers seeing slowdown at Winterflood

22nd Jul 2011 08:03

Merchant bank Close Brothers performed soundly in the five months to the end of June, although Winterflood, its securities division, saw a slowdown as market conditions got tougher in the second quarter of 2011.The Banking division saw good growth in its loan book of 7% in the period and 16% year to date to £3.4bn at 30 June 2011, up from £3.2bn at the end of January. Growth was driven by continued strong demand across Commercial and Retail. The net interest margin has remained strong and, as expected, the bad debt ratio in the period has reduced relative to the first half.In the Securities division, Winterflood's average bargains per day were broadly in line with the first half overall, but income per bargain was affected by the weaker trading conditions. Close Brothers Seydler has continued to benefit from good capital markets activity whilst Mako's performance has remained subdued.The Asset Management division delivered a small loss in the period as expected. Funds under Management (FuM) at 30 June 2011 increased to £9.7bn from £8.2bn at the end of January, principally reflecting the acquisition of Cavanagh Group, which had £1.5bn of client assets.Although there has been a slowdown in the Securities division, the group expects to deliver a satisfactory performance for the 2011 financial year. --jh