Close Brothers AM set to move into the black

Close Brothers Group’s asset management division has reported a 3 per cent increase in assets under management in the second half of 2012 as it claims it is on track to return to profitability in the coming year.

In a trading statement on the London Stock Exchange, the company reported total AUM of £8.5bn at 31 December 2012, up 3 per cent on the £8.3bn held at 31 July. The company said this reflected positive market movements over the period.

Revenue margin also improved, reflecting an increased proportion of higher-margin private client assets. Overall, Close Brothers Asset Management claims to be on track to move into profitability during the course of this financial year.

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This optimistic news comes despite trading volumes in securities remaining subdued, with Close Brothers subsidiary Winterflood continuing to experience low retail investor activity.

The company’s banking division delivered strong profit growth in the period, with loan book growth of 6 per cent year to date to £4.4bn at 31 December 2012 (31 July 2012: £4.1bn), with growth across the portfolio.

The net interest margin was lower than the last financial year as expected, however the company said this was largely offset by a further reduction in the bad debt ratio reflecting strong credit performance in the period.