Close Brothers loan activity falls year-to-date

(Sharecast News) - Merchant banking group Close Brothers said on Wednesday that loan activity had fallen in the eleven months ended 30 June but also noted that it had witnessed signs of recovery following the easing of Downing Street's lockdown restrictions.
Close Brothers said its loan book had decreased 2.3% to £7.48bn year-on-year as a result of new business volumes decreasing. However, it highlighted that there had been increased client activity in June as the most extreme of the Covid-19 lockdown measures seemed to have passed.

The FTSE 250-listed company's asset management division reported net inflows of 10% year-to-date.

Close also noted that it had set aside a further £43m for impairment since the third quarter of the year, leaving it with a year-to-date charge of £167m and an annualised bad debt ratio of 2.3% - up from 0.6% a year earlier.

"Credit provisions continue to reflect the ongoing uncertainty in the external environment," Close said.

"While early indications of a return to activity following the easing of lockdown restrictions are encouraging, it remains too early to know the full impact of Covid-19 on the UK economy."

As of 0855 BST, Close shares were down 1.12% at 1,150p.