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Close Brothers annual dividend lower as profit slumps on higher loan-loss provisions

By BFN News | 08:56 AM | Tuesday 22 September, 2020

Merchant banking group Close Brothers paid a lower annual dividend as a jump in loan loss provisions owing to the impact from the pandemic hurt annual profit. For the year ended 31 July 2020, pre-tax profit fell 47% to £140.9m as impairment charges increased to £183.7m from £48.5m, driven by the impact of Covid-19. The full-year bad debt ratio jumped to 2.3% from 0.6%, while common equity tier 1 capital ratio rose to 14.1% from 13.0%. The loan book remained broadly stable at £7.62bn, down from £7.65bn, but income in the year was impacted by lower activity levels and forbearance measures, resulting in a net interest margin decline to 7.5% from 7.9%, the company said. The company reinstated dividends with a full year payment of 40p down slightly from 44p a year ago. Total dividends for the year dropped 39%, largely thanks to the cancellation of a first half dividend which came in at 22p last year. Looking ahead, the company warned said that although it had seen 'encouraging signs of increasing economic activity in the UK since the easing of restrictions in June and July, the near-term path to recovery remains highly uncertain.' At 8:56am: (LON:CBG) Close Brothers Group PLC share price was +24.25p at 986.75p Story provided by

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