British banking firm Close Brothers Group presented upbeat results for its full-year profits on Tuesday, as robust growth across its three divisions, including banking, asset management, and market makers, such as Winterflood mainly headed its gains.
The London-based company said that even though the current market state remains stable overall, the longer-term economic outlook and effect of Brexit on their customers as well as the wider markets is still uncertain.
Given Close Brothers’ positive performance across the three divisions, the lender confirmed that their businesses in general are well positioned, although market conditions will clearly vary.
Close Brothers Figures
For its preliminary results ended July 31, Close Brothers reported a 13 percent increase to £264.8 million ($357.43 million) for its full-year pre-tax operating profit, compared to £233.6 million ($314.94 million) a year earlier.
Earnings per share (EPS) received a boost of 2 percent to £128.3 pence, against £125.7 pence last year.
Adjusted operating income in its banking division added 9 percent to £243.5 million ($328.53 million), with Property Finance leading the gains as its operating profit grew 24 percent more. Net interest margin remained strong at 8.1 percent.
Earnings in Commercial Finance were moderately up by 4 percent, while Retail Finance remained mostly flat.
The loan book also supported the division’s performance as it climbed up to £6.9 billion ($9.30 billion) which was higher by 7 percent than last year’s £6.4 billion ($8.63 billion) in the same period.
Total client assets across the group were up by 13 percent to £11.2 billion ($15.09 billion).
Moreover, the company said that favorable market conditions, such as the high levels of trading activity by retail investors throughout the year has helped boost the profits of the lender’s securities arm and Europe’s major market maker, Winterflood as well as its asset management division.
Winterflood saw its operating profit at £28.1 million ($37.88 million), rising nearly 50 percent from the £19 million ($25.60 million) in the earlier year.
Close Brothers cautioned that even with Winterflood performing well, it still remains sensitive to any change in trading conditions.
Operating income within the company’s asset management division added 21 percent on the previous year of £14.4 million ($19.41 million) to £17.4 million ($23.44 million), as good net inflows showed continued demand for the group’s integrated advice and investment management services.
The British lender’s board has raised its proposed dividend for the year to 60 pence a share, increasing by 5 percent from last year’s distribution of 57 pence a share.
Close Brothers’ chief executive Preben Prebensen said that the latest figures prove that they are capable of continuing to support their clients and drive long-term value for their shareholders through all stages of the financial cycle.
Meanwhile, the pan-European Stoxx 600 edged higher on Tuesday, adding 0.2 percent to $384.55, with most sectors mixed after moving into a negative area earlier.
Close Brothers performed the worst on the European benchmark, falling as much as 3.2 percent to £1,470 after it warned that Brexit would keep on presenting an uncertain outlook, despite current market conditions remaining stable.