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How low interest rates are hurting Curtis Banks

The Sipp administrator has warned that income for the next two years will be impacted by low rates
September 6, 2016

Curtis Banks (CBP) spent the first half of the year beefing up its operations, culminating in the acquisition of Suffolk Life in May. The full benefit of the additional 28,000 Sipps this purchase brought with it will not be realised until next year. However, there is a threat to the group's income generation on the horizon. 'Lower for longer' interest rates means there will be pressure on the net interest income Curtis Banks earns on its clients' funds this year and in 2017.

IC TIP: Hold at 325p

However, management plans to broaden its range of property Sipp administration services - which it can charge more for - across the group following its purchase of area specialist Suffolk Life. By pooling the additional £9bn in Suffolk Life assets with the group's existing assets under administration, management also hopes to negotiate better rates of investment return on its funds.

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