Market Falls Squeeze Close Brothers' Profits

Editorial Staff

15 February 2023

UK-listed said adjusted operating profit for the year ending 31 July fell 13 per cent year-on-year to £234.8 million ($253.2 million) as falling markets took their toll.

Adjusted operating profit in the banking division increased 7 per cent to £227.2 million, however, reflecting a “strong net interest margin” of 7.8 per cent, up from 7.7 per cent, and loan book growth of 5.0 per cent year-on-year.

The Close Brothers Asset Management arm attracted client assets and generated net inflows of 5 per cent, the group said in a statement yesterday.

The organisation’s common equity tier 1 capital ratio stood at 14.6 per cent at the end of July, narrowing from 15.8 per cent a year before but still significantly above minimum regulatory requirements.

Close Brothers said it is considering issuing more debt securities to hold its CET1 capital ratio in a range of 12 per cent to 13 per cent over the medium term.

The board proposed a final dividend of 44.0p per share, resulting in a full-year dividend per share of 66.0p (2021: 60.0p), up 10 per cent, and restoring the dividend level to where it was before the pandemic.