Close Brothers Asset Management saw total client assets reduced to £9.4bn at the year end, from £10.8bn at the end of July 2015, reflecting negative market movements and the disposal of corporate activities.
The group’s pre-close trading update stated the business continued to deliver solid net inflows and the expectation was for progress in the business, “notwithstanding difficult market conditions”.
Previous results for the first half of last year showed that asset management client assets rose by 11 per cent to that £10.8m figure, backing a 16 per cent increase in full-year adjusted operating profit.
The banking division also continued to deliver growth, with the loan book up 4.9 per cent to £6bn, from £5.7bn at the half-year stage, reflecting growth across its lending businesses.
However, the net interest margin remained below the prior year, even though bosses said the bad debt ratio improved slightly and the return on net loan book remained strong.
“We remain focused on maintaining our prudent lending criteria and investing in our business,” read the update.
In securities, Winterflood’s performance was impacted by “difficult market conditions” which have persisted since the start of the financial year.
Falling equity markets and lower levels of activity, particularly in the Alternative Investment Market, resulted in lower profitability over the period.
Winterflood is well positioned, but trading conditions remain difficult, according to the statement, while opportunities exist in banking, but the focus is on returns and a prudent risk profile.
“Market conditions have been weaker in the first half but we remain confident in a satisfactory outcome for the year,” it added, noting that results up until the end of January will be released on 8 March.
Third quarter results showed reduced trading income in the Winterflood business and a drop in client assets due to negative market movements.
peter.walker@ft.com
