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(Alliance News) - Close Brothers Group PLC on Wednesday reported a significant rise in its loan book for the first 11 months of the year despite the continued impact of reduced face-to-face interaction with clients due to Covid-19.
The merchant bank's loan book was up 9.6% to GBP8.3 billion in the first 11 months of the financial year ended June 30.
Since its last trading update at the end of May, the London-based merchant bank has "continued to see significant business volumes", supported by the Coronavirus Business Interruption Loan Scheme. New business volumes remained high in motor finance, and utilisation levels continued to improve in invoice finance in line with the reopening of the economy, it noted.
However Close Brothers did caution that although drawdown levels remained solid, its property loan book has declined slightly reflecting continued high repayments.
Chief Executive Adrian Sainsbury said: "We have navigated the changing environment well and our model has enabled us to perform strongly, making the most of opportunities, throughout the year. We are encouraged by improvements in the economic backdrop, although uncertainties persist."
The bank's Asset Management division has continued its growth, generating annualised net inflows of 7% compared to 6% at the end of April. Managed assets increased 3.4% in the two months to the end of June to reach GBP15.3 billion .
Its Winterflood stockbroking division remains "well positioned" to continue trading profitably in a range of conditions, but due to the nature of the business remains sensitive to changes in the market environment, Close Brothers notes. Winterflood has seen moderation in trading volumes since May. For the first 11 months of the financial year, average daily bargains were 103,000, compared to the pace of 120,000 in the third quarter to the end of March.
Looking ahead, Close Brothers said it remains well positioned to make the most of the opportunities arising from the current environment, although the economic trajectory going forward remains uncertain.
"I am confident that our proven and resilient model, together with the expertise of our people, leave us well placed to continue supporting our customers and clients and to protect, grow and sustain our business over the long term," CEO Sainsbury commented.
Shares in Close Brothers were up 1.4% at 1,506.00 pence each in London on Wednesday morning.
By Will Paige; willpaige@alliancenews.com
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