Close Brothers – Reassuringly Unexciting

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Close Brothers – Reassuringly Unexciting
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  • Close Brothers Group plc (LON:CBG), the specialist lender has released a trading statement covering the three months to end October.

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Q3 2021 hedge fund letters, conferences and more

  • CEO, Adrian Sainsbury described the group’s performance in their first quarter as encouraging, with Banking strong, good momentum in Asset Management and a return to more normal levels of trading at Winterflood, the group’s market-making arm.
  • The Banking book grew by 2.4% in the quarter, with credit performance continuing to be resilient. Asset Management benefited from net inflows that ran at an annualised 8%, leaving the group managing £17.4bn (31 July £17.0bn) of client assets. Volumes of share trades at Winterfloods are now closer to the pre-pandemic level.
  • The Group are targeting being net zero in their own emissions by 2030 and are starting to consider their Scope 3 indirect emissions and how they can help customers achieve their own transitions. Tier 1 capital remained strong at 15.7%.

Close Brothers Is A Great Business

Commenting on Close Brothers’ performance, Steve Clayton, HL Select fund manager said:

Mohnish Pabrai On Value Investing, Missed Opportunities and Autobiographies

Mohnish PabraiIn August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More

“Close Brothers are making the right noises in this statement. Credit performance is strong, but provisions remain elevated, suggesting the possibility of releases ahead. Margins look to be holding firm, despite some cost pressures and whilst the “meme trading” bonanza may be fading away at Winterflood the business remains in good shape, with no loss-making days in the quarter.

But there’s nothing in here to surprise on the upside. That’s OK, because Close Brothers is a great business with stacks of capital and the ability to pay attractive dividends, year after year whilst funding its own organic growth. The shares are a touch higher this morning, against the backdrop of a moderately weak FTSE100.”


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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