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March 20, 2017

Close Brothers: Asset finance up 1.5% to £2bn

Close Brothers Asset Finance achieved a 1.5% year-on-year increase in its loan book to £2bn (€2.4bn) as of 31 January 2017, according to its preliminary half-year results.

By Saad Ahmed

Close Brothers Asset Finance achieved a 1.5% year-on-year increase in its loan book to £2bn (€2.4bn) as of 31 January 2017, according to its preliminary half-year results.

The average loan size of an asset finance product at Close Brothers as of 31 January 2017 was £40,000, with a typical loan to value ratio of between 80% and 90%, and maturity of 40 months.

Invoice finance saw its loan book rise 5.5% to £852m, with a typical loan to value ratio of 80%, an average loan size of £300,000, and typical maturity of 2-3 months.

Close Brothers’ income from banking rose 10% year-on-year in 2017 to £274m, and achieved a 13% increase in adjusted operating profit to £122.7bn over the same period.

Net return on its loan book was 3.7%, almost unchanged from the 3.6% realised the year before, and return on equity rose slightly to 23% from 25%, for the same period.

Across the organisation, adjusted operating profit increased by 21% to £134.2m year-on-year as of 31 January 2017.

Commercial finance, which includes asset and invoice finance, saw a 9% increase in profit over the same period, and just 0.2% growth of its loan book over the six months to the end of January 2017.

Close Brothers claimed that there was ongoing competition in core asset finance, particularly in the broker channel.

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