(Reuters) - British lender Close Brothers Group (CBRO.L) reported a 21 percent jump in first-half adjusted operating profit on Tuesday helped by higher trading income at market maker unit Winterflood.
Adjusted operating profit rose to 134.2 million pounds for the six months to Jan. 31 from 111.2 million a year earlier.
Close Brothers, whose shares were up 1.75 percent at 1240 GMT, said Mike Biggs will become chairman effective May 1, succeeding Strone Macpherson.
The company, founded in 1878 as a merchant bank to provide farm mortgages in Iowa, is now a specialist lender to small-and-medium size businesses in Britain.
Its banking division posted a 13 percent rise in adjusted operating profit to 122.7 million pounds, driven by strong net interest margin and low provisions for bad debt.
About 90 percent of the company’s total profit comes from its banking business.
The loan book at the division rose 9.6 percent to 6.5 billion pounds.
“While loan book growth in the first half was somewhat slower than in recent years, we expect slightly higher loan growth in H2,” said Chief Executive Preben Prebensen told Reuters.
Close Brothers’ marketmaking division Winterflood more than doubled its profit, helped by strong retail trading driven in part by the Britain’s vote to leave the European Union.
UK lenders have so far defied predictions that Brexit could trigger higher bad debts and poorer lending volumes at banks already challenged by rock-bottom interest rates.
Lender Aldermore Group Plc (ALD.L) forecast strong loan-book growth in 2017, after reporting a better-than-expected 34 percent jump in profit for the previous year due to higher mortgages and loan demand from homeowners and small and medium-sized businesses.
Close Brothers said it would pay a 5 percent higher interim dividend of 20 pence per share.
($1 = 0.8240 pounds)
Reporting by Justin George Varghese and Noor Zainab Hussain in Bengaluru; editing by Jason Neely and Mark Potter