Close Brothers hoping to soothe investor jitters after bruising year

CHARLIE CONCHIE

MERCHANT banking group Close Brothers is hoping to win back the confidence of the City this week after a bruising few months.

The FTSE 250 firm will issue a trading update to the City on Wednesday and is looking to soothe investor jitters after its profits cratered nearly 90 per cent at its half year update in March.

The firm said in March it had set aside £100m to cover bad loans from Novitas, dragging its adjusted operating profits down to £12.6m in the six months ending January 2023.

Close Brothers acquired Novitas in 2017 but ceased lending from the business in 2021, with the division now in run-off.

Analysts are expecting adjusted operating profits for the full year to come in at £115m, less than half of the £235m racked up last year, according to a company-compiled consensus. Analysts at Hargreaves Lansdown said there was now a “lot riding on this trading statement”, with recent updates “testing investors’ patience”.