Close Brothers Group PLC on Thursday reported a mixed first-quarter of its financial year, with a creditable performance in its banking business, though it is grappling with ‘unfavourable’ conditions in its market-facing arm.

Shares in the London-based merchant bank fell 1.8% to 775.00 pence each in London on Thursday morning.

‘Performance in the first quarter of 2024 reflected continued momentum in Banking, whilst our market-facing businesses were impacted by unfavourable market conditions. In Banking, we delivered loan book growth across our businesses, strong margins and a stable credit performance,’ Chief Executive Adrian Sainsbury said.

Its Banking loan book rose 3.0% in the quarter ended October 31.

Close Brothers added: ‘We saw good demand in commercial, despite the roll-off of government supported lending, driven by strong new business volumes in leasing and invoice finance. In retail, growth in the UK motor finance and premium finance businesses more than offset the run-off of the Irish motor finance book. The property loan book continued to grow as we saw drawdowns from our strong pipeline.’

The firm added that Close Brothers Asset Management has ‘delivered strong year-to-date annualised net inflows of 10%’.

In the Winterflood stock brokerage business, however, Close Brothers was hurt by ‘a further weakening of investor appetite’. The unit suffered an operating loss of £2.5 million in the first quarter.

The company added: ‘Our Banking business is sustaining its growth momentum and focusing on pricing discipline, and remains well positioned to make the most of opportunities in the current environment. In CBAM, we remain committed to driving growth organically, through high quality hiring, and through in-fill acquisitions. Winterflood is well positioned for when investor confidence recovers.’

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