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Close Brothers Profit Rises 20% on Asset Management Rebound

Sept. 24 (Bloomberg) -- Close Brothers Group Plc, the British financial services company founded in 1878, said full-year profit rose 20 percent after it reorganized its asset management arm and increased lending. The shares gained.

Net income for the 12 months to July 31 increased to 119.4 million pounds ($191.5 million) from 99.7 million pounds in the year-earlier period, the London-based lender said in a statement today. The asset-management unit posted adjusted operating profit of 4 million pounds, compared with a 4.3 million-pound loss.

Close Brothers has been restructuring its funds business to focus on wealth management for U.K. private clients, and in 2011 sold its advisory, U.K. offshore and Cayman Islands operations to concentrate on banking, securities and asset management.

“We spent three or four years restructuring the asset management business, it’s now making money and it’s on track, Chief Executive Officer Preben Prebensen said in a telephone interview. ‘‘We see the combination of business now as entirely logical and well-positioned.”

Close Brothers rose 4.9 percent to 1189 pence in London trading, the biggest increase since August 2011.

Revenue increased 10 percent to 582.9 million pounds, the company said. Profit in the banking business, which makes short-term, secured commercial loans, gained 17 percent to 157.8 million pounds. The lender’s loan book grew 13 percent to 4.6 billion pounds over the period.

“In terms of demand for credit among small businesses, it’s still patchy,” Prebensen said. “It’s stable but we’re still not seeing a broad-based increase in demand.”

The securities division, comprising stockbroker Winterflood Securities, reported profit of 25.7 million pounds, up 5 percent.

The full-year dividend rose 7.2 percent to 44.5 pence a share.

To contact the reporter on this story: Liam Vaughan in London at lvaughan6@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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