Does Close Brothers Group plc Have Greater Investment Appeal Than Barclays PLC, HSBC Holdings plc, Lloyds Banking Group PLC And Standard Chartered PLC After Trading Update?

Will shares in Close Brothers Group plc (LON:CBG) (LSE:CBG.L) outperform those of Barclays PLC (LON:BARC) (LSE:BARC.L), HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L), Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L) and Standard Chartered PLC (LON:STAN) (LSE:STAN.L)?

Close Brothers Group plc
Close Brothers Group plc

Close Brothers Group plc (LON:CBG) (LSE:CBG.L) has released a pre close trading update to the stock market today. It covers H1 of FY2017 and states the investment company has registered a strong performance since the start of the year.

Investors may be upbeat about its Banking division, which has generated profit growth during the period. This was caused by higher income with a stable net interest margin, as well as a lower bad debt ratio brought about by good underlying credit performance and provision releases.

Close Brothers saw its loan book rise 2.3% over the period and 9.3% year on year at £6.6 billion. This was driven by good profit growth particularly in premium finance and property. New business volumes remain solid across the loan book, repayments were higher towards the end of the period which today’s investor update covers.

Asset management benefitted from better market conditions. Market movements and net inflows from investors were positive. Overall, though, managed assets declined to £7.8 billion due in part to the previously announced disposal of OLIM Investment Managers. Winterflood delivered a sound performance, which is good news in my view since stock market and wider investment conditions have been relatively volatile in recent months.

In the last month, shares in Close Brothers have fallen by 0.2%. That’s behind the share price performances of stock market peers Barclays PLC (LON:BARC) (LSE:BARC.L), HSBC Holdings plc (LON:HSBA) (LSE:HSBA.L), Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L) and Standard Chartered PLC (LON:STAN) (LSE:STAN.L). Shares in Barclays are up 0.2%, Standard Chartered’s stock is 12% higher, HSBC’s shares have risen by 3% and Lloyds shares have gained 1.5%.

In my view, Close Brothers has long term investment appeal. I believe it has a sound business model and we should give the general business credit for its strong performance in H1. However, I feel the stock market’s potential volatility in 2017 could cause Close Brothers stock to also be volatile. So, it’s not a stock I’m looking to trade via CFD or spread betting accounts. However, in the long run, I believe its shares will perform relatively well.

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