Close Brothers Group has said first-half profits edged higher as strong growth in investment banking outweighed a flat performance in banking services.
The bank, whose private asset management division opened a Birmingham office in Brindleyplace last year said pretax operating profits before goodwill for the six months to January 31 came in at £ 65.1 million, up from £57.9 million a year earlier.
Close Brothers said the improvement largely reflected a strong performance in investment banking, where first half profits rose by 17 per cent on the year, buoyed by stronger asset management revenues.
Chief executive Colin Keogh said he expects investment banking to continue outpacing the banking division for the remainder of the year.
"We expect that investment banking will continue to move forward whilst banking will continue to find trading tough," he said in a statement. "Overall, we are set fair for our second half."
He told The Birmingham Post that the private equity business had had a good first half, and continued to be active in the Midlands - having made investments in chemical firm Minova, timber business Waltons and Network Disaster Recovery in Birmingham.
He added that it also does a lot of lending business in Birmingham though its manufacturing lending division was finding the going tougher. "British manufacturers are having a tough time of it," he said.
Mark Bray of the Birmingham asset management office said it had had a successful start in the city.
"We're very happy," he said. "We have achieved the targets we have set for ourselves. We are pleased at how it is going and are looking to expand."
Although he was not willing to say how large this expansion would be, he said it should take place well within the next 12 months.
Profits from the mortgagefocused banking division were up by just two per cent, held back by "testing" market conditions and increased regulatory costs.
Close Brothers said that while there was some evidence of a slowdown in consumer borrowing, bad debt charges fell to one per cent of the total loan book, down from 1.3 per cent a year earlier.
Close Brothers' benign assessment of consumers' ability to repay their debts confirms positive comments on the bad debt situation.
It said the acquisitions of Singer & Friedlander's motor finance loan book, now being run off, and Cattles' commercial assets lending business in Hull, together amounted to some £200 million of loans. Its gross loan book expanded over the past 12 months to £ 1 . 98 billion, from £1.68 billion last year.
The interim dividend was set at 9.5 pence per share, up from 9.0 pence per share.
