The chief executive of Close Brothers has announced his resignation as the company's profitability warnings in its asset management arm materialised amid "challenging" market conditions and a costly hiring spree.
Preben Prebensen is resigning after ten years in the role. In a statement to the market this morning (September 24) the company confirmed he would be moving on to the "next stage in his career", but would remain with Close Brothers for the coming 12 months as the firm begins its search for a successor.
In its annual results also published today (September 24) the firm announced an operating profit of £21.8m for the year ended July 2019 in its asset management division, down 6 per cent from the £23.1m in 2018.
The company's overall performance was offset slightly by a 1 per cent profit increase in its banking business to £253.7m, with the wider group returning an operating profit of £270.5m, down 3 per cent on last year.
In a trading update issued in July Close Brothers warned profits in its asset management arm had been dented by tough market conditions.
In today's results it said profits had been impacted by lower average market levels throughout the year and continued investment, including increased costs driven by the continued recruitment of advisers and portfolio managers.
Today's results also announced an increased dividend for shareholders, up by 5 per cent to 66p.
Mr Prebensen said: "I am pleased that the group has delivered a very solid performance, maintaining strong returns and profitability.
"The banking division has achieved good loan book growth whilst maintaining strong margins and consistent pricing in a competitive market, and our market facing businesses have continued to deliver strong net inflows and solid trading profitability in challenging conditions.
"The disciplined application of our business model and investment in key strategic initiatives give us confidence that we can continue to support our customers in a wide range of market conditions."
About his resignation he said: "After ten years as chief executive, it is now time for me to hand over the leadership of Close Brothers.
"It has been a privilege to lead such a special and successful organisation, and I am deeply grateful for the dedication and commitment of our employees and the support of the board during this time.
"The group is clearly well positioned for the years ahead, with an excellent team in place, and I look forward to working closely with the board over the next year to continue delivering on our strategy and ensure a smooth and successful transition."
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