Close Brothers record £4.6bn loan book

Close Brothers’ commercial gamble appears to have come up trumps for the London-based lender, after reporting a pre-tax profit of £163.1 million for the year.

The merchant bank reported strong growth within its banking sector, with the division accounting for 13 per cent of its loan book growth to £4.6 billion.

Close Brothers banking division, with 40 offices across the UK and 1700 employees, increased its lending by 20 per cent year-on-year from 2009 to 2012, in an effort to plug a significant gap left in the market by high street banks.

Close's banking clientele are almost entirely UK based – 95 per cent of which borrow less than £50,000.

On its commercial side, Close Brothers’ reported that it had lent to 23,000 different British businesses, funding high ticket purchases such as upgraded machinery.

Speaking on the news, Stephen Hodges, banking Chief Executive of Close Brothers, said: "Lending to SMEs is at the core of our banking business and we have more than doubled our lending to the sector since 2009. Our lending is done through our experienced people at the local level, with over 40 branches across the UK, and we are committed to supporting our customers in all economic conditions."

Close benefitted from heightened shares on London’s Aim market, together with a host of increased advisory fees - resulting in a 9 per cent growth in assets under management to £9.1 billion.

The division contributed £4 million to adjusted operating profit, compared with a £4.3 million loss in 2012.

Specifically, Close Brothers’ market-making arm, Winterflood, was a particular beneficiary of a 24 per cent rise in the value of shares traded on London’s junior Aim market every day in August.

Also commenting on the news, Preben Prebensen, chief executive at Close Brothers, said: “Close Brothers has delivered a strong financial with continued good growth in Banking supported by an improving contribution from Securities and Asset Management.

“We have a strong position in our chosen markets and we remain well funded and well capitalised. We continue to see good opportunities for growth and believe we are well positioned for the current financial year.”