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Close Brothers Group PLC on Tuesday posted a decline in annual profit and income, as its Winterflood business faced a tough comparator.
In the financial year ended July 31, the London-based merchant banking group posted an operating pretax profit of £232.8 million, down 12% from £265.2 million the year before.
Operating income was £936.1 million, falling 2% from £952.6 million. This was comprised of net interest income, which rose 7.5% to £578.0 million, offset by a 14% decline in non-interest income, which came in at £358.1 million.
Shares in Close Brothers were down 6.4% to 958.00 pence each in London on Tuesday morning.
‘The Banking division has performed well as we continued to see good demand across our lending businesses and strong margins. CBAM was affected by falling markets, but continued to attract client assets. Winterflood faced declining markets and reduced trading activity, in sharp contrast to the exceptionally strong conditions in the prior year,’ explained Chief Executive Adrian Sainsbury.
Winterflood, which provides outsourced dealing and custody services for asset managers and platforms, reported income which was48% lower. The division's operating pretax profit plummeted 77% to £14.1 million.
The firm declared a final dividend of 44.0p per share, bringing the full-year payout to 66.0p - a 10% increase year-on-year.
‘Although we are aware of the pressures that the rising inflation and interest rates will have on our customers and colleagues, I am confident that our proven and resilient business model, strong financial position and deep expertise leave us well positioned to continue to support them now and into the future,’ Sainsbury concluded.
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