Close Brothers’ (CBG) loan book growth may not have shot the lights out during the first-half, but the focus was on maintaining a prudent approach to underwriting. Despite margin pressure in the asset and motor finance markets – which was behind the 2.6 per cent contraction in the loan book of the latter segment – the net interest margin at its banking business was stable at 8.2 per cent.
Premium and property finance led the way, with the latter unit continuing to benefit from demand for residential development lending, which pushed the loan book up 12 per cent to £1.7bn. In commercial banking, lending increased 5 per cent, thanks to the acquisition of invoice finance business Novitas, coupled with increased focus on niche areas of asset finance.
Broker Winterflood generated a 3 per cent increase in operating income, thanks to higher trading volumes in FTSE 350 and Alternative Investment Market stocks, with "bargains per day" up a fifth to 70,000. Asset management – which deals solely with retail clients – benefited from £573m in net inflows.
Analysts at Numis expect adjusted net tangible assets of 721p a share at 31 July 2018, up from 665p the same time the previous year.
| CLOSE BROTHERS (CBG) | ||||
| ORD PRICE: | 1,556p | MARKET VALUE: | £ 2.36bn | |
| TOUCH: | 1,552-1,557p | 12-MONTH HIGH: | 1,715p | LOW: 1,315p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 844p | LEVERAGE: | 8.8 | |
| Half-year to 31 Jan | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 378 | 131 | 65.1 | 20 |
| 2018 | 406 | 139 | 69.2 | 21 |
| % change | +7 | +6 | +6 | +5 |
| Ex-div: | 22 Mar | |||
| Payment: | 25 Apr |
