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
