Close Bros Share News (CBG)

(Sharecast News) - Merchant banking group Close Brothers said on Tuesday that it had delivered a "strong performance" given the current trading environment, with operating profits ticking up in the six months ended 31 January.

Close Brothers said adjusted operating profits increased 2% to £128.5m, with a return on opening equity of 13.2%, reflecting high new business volumes in its lending unit, solid net inflows in the asset management wing and "a very strong trading performance" in Winterflood.

The group also highlighted that its loan book had increased by 4.4% in the first six months of the year to £7.95bn due to strong demand for loans issued under CBILS and significant new business volumes in motor finance.

Close's annualised bad debt ratio of 1.3% was up on the pre-Covid-19 ratio of 0.9% for the first half of 2020 but down significantly from the 2.3% ratio for the 2020 financial year as a whole.

Chief executive Preben Prebensen said: "We delivered a strong performance in the first half of the year in the context of current market conditions, with the positive trends seen at the end of the last financial year continuing."

While Close declared an interim dividend of 18.0p per share, reflecting its "strong performance" in the first half, given the "continued significant uncertainty" in the external environment, the group said it would make its recommendation on any final dividend in September, subject to its financial performance and outlook at the time.

As of 1030 GMT, Close Brothers shares were down 2.00% at 1,617.0p.