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Investment case

Our Businesses

Close Brothers is a leading UK merchant banking group providing lending, wealth management services and securities trading. We employ over 3,700 people across 47 offices predominantly in the UK, Ireland and Germany.

    Commercial

    The Commercial businesses lend principally to small and medium-sized enterprises, both through their direct sales force and via broker distribution channels. Our highly specialist sales force operates from offices throughout the UK, Ireland and Germany.

    2021 Adjusted operating profit: £52.8 million (2020: £4.8 million)

    Retail

    The Retail businesses provide loans to predominantly individuals and small businesses, through a network of intermediaries.

    2021 Adjusted operating profit: £71.9 million (2020: £34.9 million)

    Property

    The Property business specialises in short-term residential development finance through Property Finance, and also offers refurbishment and bridging loans through Commercial Acceptances.

    2021 Operating profit: £87.8 million (2020: £59.5 million)

    Close Brothers Asset Management is a vertically integrated top 20 UK wealth manager, providing financial advice and investment management services to private clients in the UK. Our clients range
    from mid to high net worth individuals.

    2021 Adjusted operating profit: £23.7 million (2020: £20.4 million)

    The Securities division comprises Winterflood, a leading UK market maker for retail stockbrokers and institutions.

    2021 Operating profit: £60.9 million (2020: £47.9 million)

     

     

    Business Model

    Close Brothers has a proven and resilient business model, delivering excellent service in sectors we know and understand. Our distinctive strengths ensure we are well positioned to continue delivering on our long-term track record of growth and profitability.

     

    Download Business Model pdf

    The Foundations of Our Business

    Our culture, our strategy and our responsibility underpin the foundations of our success, enabling us to deliver on our purpose: to help the people and businesses of Britain thrive over the long term.

    Download The Foundations of Our Business pdf

      Our purpose is to help the people and businesses of Britain thrive over the long term.

      Our purpose is at the heart of our business and guides every decision we make. We take a long-term approach to managing our business.

      Our distinctive culture and long-term approach are embedded throughout the organisation. 

      It combines our values of service, expertise and relationships with our ways of working: teamwork, integrity and prudence. These values ensure we continue to provide excellent service for our customers and clients over the long term, bringing out the best in our people and supporting our strong reputation.

      To protect, grow and sustain our proven and resilient business model so that it continues to deliver in the long term.

       

       

      Our responsibility to help address the social, economic and environmental challenges facing our business, employees, customers and clients, now and into the future.

      Acknowledging this responsibility and making it part of our DNA broadens our perspective and encourages us to look at how we operate our business and the decisions we take, in the best interests of all our stakeholders, the environment and the society we operate in.

      Our Strategy

      Our long-term strategic approach focuses on ways to protect, grow and sustain our model, enabling us to continue delivering excellent stakeholder outcomes.

       

      Ensuring the right fit

      These eight criteria are all factors that we consider when assessing growth opportunities. They capture the key strengths of our model and so by taking these into account, it ensures we are following a disciplined approach to growth and preserving the attributes that generate value for our shareholders. 

      Strategic priorities

      Protect

      • Maintaining a strong funding, liquidity and capital position
      • Consistently applying our prudent business model through our disciplined approach to underwriting and pricing
      • Balancing investment needs and cost discipline
      • Maintaining regulatory compliance, whilst enhancing operational and cyber resilience

      Strategy & KPI's

      Key performance indicators (at 31 July 2021)

      Common equity tier 1 capital ratio

      15.8

      Net interest margin

      7.7

      Funding cover of loan book

      131

      Bad debt ratio

      1.1

      Grow

      • Maximising opportunities available to us in the current environment
      • Capitalising on cyclical opportunities in each business
      • Extending our product offering and launching new initiatives
      • Assessing opportunities for disciplined growth in existing and new markets

       

      Model Fit Assessment Framework 

      Key performance indicators (at 31 July 2021)

      Loan book growth

      11

      Net inflows

      7

      Adjusted basic earnings per share

      140.4

      Sustain

      • Promoting an inclusive culture and supporting new ways of working and social mobility
      • Reducing our impact on the environment and responding to the threats and opportunities of climate change
      • Promoting financial inclusion, helping borrowers that might be overlooked and enabling savers and investors to access financial markets and advice to plan for their future
      • Supporting our customers, clients and partners in the transition towards more sustainable practices

      Strategy & KPI's

       

      Key performance indicators (at 31 July 2021)

      Employee engagement

      91

      Dividend per share

      60

      Reduction in overall scope 1 and scope 2 emissions

      23

      Sustainability is fundamental to our purpose

      We take a long-term approach to managing our business, with an ambition to make a lasting positive impact, both now and into the future. Our values encourage and support diversity and inclusion at all levels of our organisation, helping the communities we operate in and reducing our environmental impact.

      Download Sustainability Report pdf

        Promoting an inclusive culture in everything we do, and supporting new ways of working and social mobility

        We recognise the value of a diverse and inclusive workplace and have made commitments to further increase our diversity through signing up to the Women in Finance Charter, the 30% Club campaign and the Race at Work Charter. We continue to make good progress towards our targets in these areas, while our ongoing partnerships with organisations such as the Business Disability Forum continue to help us nurture our inclusive culture.

        Social mobility is an issue that is closely linked to many other aspects of inclusion. In recognising that many are not afforded the opportunities of others we are partnering with organisations like the Social Mobility Foundation and UpReach, connecting us with a new pool of talented young people from disadvantaged backgrounds.

        Employees-opt

        Reducing our environmental impact and responding to the threats and opportunities of climate change

        We recognise the importance of addressing the threat of climate change, and our ongoing work to identify the risks and opportunities it poses to our business model remains a key area of focus for the group. We take our responsibility towards the environment seriously, and as a group we are supportive of the goals of the Paris Agreement to achieve net zero by 2050. 

        Our efforts to reduce the impact of our operations on the environment continue at pace, and we strive to take actions that make a positive contribution to the world around us. Careful consideration of environmental factors and potential risks plays an integral role in the actions we take, alongside thoughtful evaluation of where opportunities may arise for Close Brothers to make a meaningful difference through our business decisions.

        Environment

        Promoting financial inclusion, helping borrowers that might be overlooked and enabling savers and investors to access financial markets and advice to plan for their future

        By aiming to create long-term value and a lasting, positive impact on society, engaging with local communities is integral to how we operate and conduct business. We build relationships based on quality and trust, sharing our specialist expertise to help our customers and clients plan, save and invest for the future.

        We take great pride in understanding the needs of SMEs and our ability to help them achieve their goals and realise their ambitions. By helping SMEs thrive in local communities across the UK we support the creation of jobs and opportunities in regions that may otherwise be overlooked by larger and less specialist finance providers.

        Community-v2

        Supporting our customers, clients and partners in the transition towards more sustainable practices

        We take a long-term approach to managing our business, with an ambition to make a lasting positive impact, both now and into the future. As a financial services provider we recognise that we have a role to play in helping our customers and clients address the world’s social, economic and environmental challenges, and a responsibility to support them as they adapt to more sustainable practices.

        We recognise that putting customers’ interests at the heart of our business is central to our success, and our purpose to help the people and businesses of Britain thrive is a fundamental commitment to our customers and clients over the long term. We continue to ensure we support them through unprecedented challenges, and looking to the future, we are committed to helping them realise their ambitions and adapt to a world that is uncertain but open to opportunities.

        Customers