Of Special Interest
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
30th September 2011
Close Brothers profit fall mainly on subsidiary writedowns
Close Brothers reported a net profit for the year to end July of £14.6m (€16.7m $22.8m ¥1,745m Y146.0m) DOWN 78%. The group would prefer you to concentrate on an adjusted operating profit of £131.2m UP 11% on a year ago and indeed you have to work to page 7 of the preliminary report to find the statutory figure.
A significant part of the difference between the profit figures is due to impairments recorded in discontinued businesses as the bank tried to get back to its core business. Best news is that it has agreed to sell its stake in Mako, the market maker. In every financial report, literally, since purchasing the stake in 2007 it has had to apologise for Mako's performance. This formed the bulk of a total of £46.9m in writedown. During the period it also disposed of its Cayman Islands businesses with a disposal loss of £28m. Given the continued poor performance of Mako it is perhaps a question for the auditors as to why it should have remained on the books at £36m more than it could sell the stake for. A similar question could be asked regarding why the Cayman Islands business loss only crystallised at the time of sale.
Close Brothers has generally made reasonable money for the size of its operations from its core UK SME business. Other operations such as Winterflood and Seydler have previously experienced difficult times but are proving more effective recently. Winterflood reported an 11% fall in operating profit, whilst Seydler reported an 84% increase from a low base.