Close Brothers Group PLC (LSE:CBG) reported a bigger fall than expected in profits and capital levels for the year to end-July.
Operating profit grew 7% for the banking arm but fell 77% for its Winterflood market making business and 8% for its asset management wing (CBAM).
Overall adjusted operating profit fell 13% to £234.8mln, while analysts had expected over £252mln, according to RBC Capital Markets, as income reduced 2% to £936.1mln.
The FTSE 250-listed merchant bank proposed a 44p final dividend, meaning its total dividend was hiked 10% to 66p, back to its pre-pandemic level.
“Against a backdrop of continued market uncertainty, we have delivered a solid performance,” said chief executive Adrian Sainsbury.
He said the banking division continues to see “good demand” across lending businesses and maintained strong margins.
But CBAM was affected by falling markets but continued to attract client assets, with net inflows up 5%, he said, while Winterflood was hit by declining markets and reduced trading activity.
“Although we are aware of the pressures that the rising inflation and interest rates will have on our customers and colleagues, I am confident that our proven and resilient business model, strong financial position and deep expertise leave us well positioned to continue to support them now and into the future,” he said.
Capital levels fell but remained above the applicable minimum regulatory, with the common equity tier 1 (CET1) ratio of 14.6% at the end of July, versus 15.8% a year earlier.