Close Bros Share Price (CBG)

Close Brothers Group: UBS raises target price from 850p to 930p, while retaining a neutral rating. JP Morgan takes price target from 920p to 997p and reiterates its overweight rating.

Finance house Close Bros said strong growth in its banking division was maintained while challenging trading conditions continued to hurt its securities division, with Winterflood dragged down by low retail investor activity. The banking division's loan book recorded 6.0% growth year to date to £4.4bn, after growth across the portfolio. Close Brothers said the net interest margin was lower than the last financial year as expected, however this was largely offset by a reduction in the bad debt ratio reflecting strong credit performance in the period across the businesses. Meanwhile low trading volumes across the market impacted the performance of the securities division, with Winterflood continuing to experience low retail investor activity. The asset management division continued to make progress with total assets under management (AuM) up 3.0% to £8.5bn at December 31st 2012, reflecting positive market movements over the period, it said. The revenue margin also improved reflecting an increased proportion of higher margin private client assets, it added. "The group is well positioned for the remainder of the 2013 financial year. The banking division continues to see solid prospects for growth and asset management remains on track to move into profitability during the course of this financial year," the group said in a company statement. "Challenging trading conditions continue to impact Winterflood's performance although it remains well positioned for any market recovery."

Close Brothers Group: Shore Capital downgrades to hold.

Close Brothers Group: UBS raises target price from 830p to 850p, neutral rating kept.

Close Brothers Group: UBS raises target price from 830p to 850p, neutral rating kept.

Close Brothers, the FTSE 250 specialist financial services firm, said it has made a solid start to its financial year though it did highlight a 'challenging' environment in its Securities division. The performance of Securities has "remained slow", the group said in its first-quarter trading update covering the period between August 1st and the end of October. Its market-making division, Winterflood, continues to be affected by a low-volume trading environment, with average bargains per day down on last year. Meanwhile, its Germany operation, Seydler, has also been hit by low volumes though capital market activity is said to have increased. Elsewhere, Close Brothers' Banking division performed strongly during the first quarter with the loan book rising by 4% to £4.3bn, mainly as a result of growth from motor finance, asset finance and property. However, net interest margin decreased as expected due to changes in the product mix. In Asset Management, the company said that it has made good progress as it "moves towards profitability", with assets under management up 2% to £8.5bn. "Overall the group remains well positioned for the remainder of the financial year," Close Brothers said. "The Banking division continues to see prospects for growth and Asset Management remains on track to move into profitability during the course of this financial year. Winterflood continues to be affected by difficult trading conditions but remains well placed for when market conditions improve."