Close Brothers boasts solid first quarter amid higher net inflows

(Alliance News) - Close Brothers Group PLC on Thursday hailed a "solid start" to financial year 2023.

The London-based merchant banking group noted that in the first quarter to October 31, trading was subdued for stock broker Winterflood, but administered assets of Winterflood Business Services, a business-to-business platform provider, grew to over GBP10 billion, up at least 39% from GBP7.2 billion at July 31, and at least 61% higher than GBP6.2 billion on July 31, 2021.

WBS added Fidelity International as a new client during the recent period.

Close Brothers said that it achieved a "strong margin" in its Banking division and higher net inflows in Asset Management. The company said it does not yet see a significant impact from the macroeconomic environment on its experienced credit performance, while it noted rising inflation and interest rates which affect its customers.

Close Brothers Asset Management delivered year-to-date annualised net inflows of 7%, up from 5% in financial year 2022, the company said. Managed assets however fell to GBP14.8 billion as at October 31 from GBP15.3 billion at July 31. Total client assets fell 3.0% to GBP16.1 billion from GBP16.6 billion.

The firm's Common Equity Tier 1 ratio of 14.6% as of October 31 remained unchanged from July 31, when financial 2022 ended.

Looking ahead, Close Brother's loan book rose mildly to GBP9.13 billion as of October 31 from GBP9.10 billion three months ago, on the back of steady demand in its Commercial businesses.

The company's bad debt ratio remained at 1.2 as the firm said it is not yet seeing an impact of economic issues.

Close Brothers shares were 1.1% lower at 1,044.00 pence each in London on Wednesday afternoon.

By Tom Budszus; tombudszus@alliancenews.com

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