Close Brothers has reported a 13 per cent increase in operating profit, with property lending at the forefront of the growth.
Total operating profit was £264m for the year to 31 July.
The banking division delivered £243.5m, operating profit in the property finance business rose by 24 per cent, while commercial lending was up a more modest 4 per cent, and retail finance was broadly flat.
The company said it is maintaining a “disciplined” approach to lending in a “competitive” market.
The total loan book grew by 7 per cent to £6.9bn.
The bad debt ratio was static, at 0.6 per cent, but the net interest margin actually shrunk by 10 basis points, to 8.1 per cent.
This indicates the profit being achieved on loans fell slightly during the year. That is an indicator of the competitiveness of the market.
The company said high levels of trading activity by retail investors had helped operating profits at Winterflood, the stockbroking business it owns, grow by 50 per cent during the period concerned.
The asset management business saw assets under management grow by 9 per cent, and deliver a profit of £17.4m
The dividend is 60p per share, a 5 per cent increase on last year’s distribution.
Preben Prebensen, chief executive of Close Brothers, said: “I am pleased to report another good performance for the group in the 2017 financial year, with increased profits across all three divisions.
“In an evolving market environment, we remain committed to our established business model, which relies on the expertise of our people to deliver consistently high levels of service, building deep and sustainable relationships with clients and intermediaries."
david.thorpe@ft.com
