Close Brothers Group PLC

Earnings Release • Feb 21, 2017

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RNS Number : 4310X

Close Brothers Group PLC

21 February 2017

Press Release

Enhanced Segmental Disclosures

21 February 2017

The group and particularly the Banking division have grown significantly in recent years. Therefore, we now believe it is appropriate to increase the level of financial disclosure for the three operating segments within the Banking division.

This announcement sets out the planned changes and provides comparative figures for these segments in advance of the group's 2017 half year results announcement on 14 March 2017. These enhancements to our reporting do not reflect any changes to the structure of the group and will have no effect on the reported group financial statements or the Banking division as a whole.

The three operating segments in the Banking division are Retail Finance (motor and premium finance), Commercial Finance (asset and invoice finance) and Property Finance (residential development and bridging finance).  In addition to existing income disclosure for each of these three operating segments, we will report adjusted operating profit and key performance ratios.  The analysis of the loan book by line of business given in previous results announcements will remain unchanged.

The Securities and Asset Management operating segments will remain unchanged.

The following pages set out the comparative figures for the Banking segments for FY 2016 and H1 2016.  All figures are before the charge for amortisation of intangible assets on acquisition, and therefore on our normal adjusted basis.

Enquiries

Sophie Gillingham                                Close Brothers Group plc                                          020 7655 3844

Eva Hatfield                                          Close Brothers Group plc                                          020 7655 3350

Liya Dashkina                                       Close Brothers Group plc                                          020 7655 3468

Andy Donald                                         Maitland                                                                     020 7379 5151

About Close Brothers

Close Brothers is a leading UK merchant banking group providing lending, deposit taking, wealth management services and securities trading.  We employ around 3,000 people, principally in the UK.  Close Brothers Group plc is listed on the London Stock Exchange and is a member of the FTSE 250.

BANKING DIVISION TOTAL  (Unchanged)

		H1 2016 £m	FY 2016 £m
Operating income		248.7	511.2
Operating expenses		(123.6)	(250.3)
Impairment losses on loans and advances		(16.7)	(37.9)
Operating profit		108.4	223.0
Net interest margin		8.3%	8.2%
Expense/income ratio		50%	49%
Bad debt ratio		0.6%	0.6%
Closing loan book		5,969	6,432
Operating lease assets		140	160
Average loan book and operating leases		5,987	6,226

RETAIL FINANCE
		H1 2016 £m			FY 2016 £m
Operating income		100.4			204.6
Operating expenses		(53.3)			(107.7)
Impairment losses on loans and advances		(8.2)			(17.8)
Operating profit		38.9			79.1
Net interest margin		8.7%			8.6%
Expense/income ratio		53%			53%
Bad debt ratio		0.7%			0.7%
Closing loan book				2,332	2,511
Average loan book				2,299	2,388

COMMERCIAL FINANCE

			H1 2016 £m		FY 2016 £m
Operating income			97.2		202.3
Operating expenses			(57.2)		(116.2)
Impairment losses on loans and advances			(6.5)		(16.5)
Operating profit			33.5		69.6
Net interest margin			8.2%		8.2%
Expense/income ratio			59%		57%
Bad debt ratio			0.6%		0.7%
Closing loan book				2,278	2,463
Operating lease assets				140	160
Average loan book and operating leases				2,359	2,460

PROPERTY FINANCE
		H1 2016 £m			FY 2016 £m
Operating income		51.1			104.3
Operating expenses		(13.1)			(26.4)
Impairment losses on loans and advances		(2.0)			(3.6)
Operating profit		36.0			74.3
Net interest margin		7.7%			7.6%
Expense/income ratio		26%			25%
Bad debt ratio		0.3%			0.3%
Closing loan book				1,358	1,457
Average loan book				1,329	1,378

DEFINITIONS

The following definitions used in this release are unchanged from previous reporting:

Adjusted: adjusted measures are used to increase comparability between periods by excluding amortisation of intangible assets on acquisition, and any goodwill impairments and exceptional items

Expense/income ratio: total adjusted operating expenses on adjusted operating income

Bad debt ratio: impairment losses on average net loans and advances to customers and operating lease assets

Net interest margin: net income generated by lending activities, including net interest income, net fees and commissions and net operating lease income (deducting depreciation), on average net loans and advances to customers and operating lease assets

This information is provided by RNS

The company news service from the London Stock Exchange

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