Close Brothers Group Retains Coveted F1 Mark In European Banking Ratings

Mandy Robinson, Tax-news.com, London

10 January 2001

The Close Brothers Group has retained a top credit rating in the recent european banking ratings issued by the agency Fitch IBCA. The company's Isle of Man managing director said: 'We are very pleased that Fitch IBCA has reaffirmed our short-term credit rating at the highest possible quality level for a further year. Close Brothers are one of very few UK banks to have been awarded a short-term credit rating of F1'

The agency's rating is one of the most prestigious and distinguished endorsements of credit standards in the European banking industry. A Fitch IBCA spokesman explained: 'Our ratings reflect the continued strong performance of the Close Brothers Group. The management strategy has been to avoid competition with larger banks and instead to grow or acquire niche businesses. This strategy provides strong margins and a good return on equity. The group engages in a broad range of activities across a variety of sectors, so its earnings sources are well diversified. Our ratings also take into account Close Brothers' conservative lending policy, with loans secured against assets or receivables and the average loan size small.'

He continued: 'Given the continuing strength of the group’s overall performance and capital base, combined with Close Brothers' conservative funding and lending policies, we are affirming the ratings.'

Fitch IBCA states that the principal factors it uses to determine bank ratings involve the study of profitability and balance sheet integrity, franchise, management, operating environment and prospects. The rating agency also looks at consistency in terms of banking support for its customers before coming to conclusions on a bank's long-term as well as short-term ratings.

Delighted Close Brothers Group managing director Rod Kent said: 'This is once again very good news for Close Brothers Group plc. The F1 rating is particularly satisfying as there are very few such ratings awarded to banks in the United Kingdom. ‘It is very pleasing and a recognition of the strategic direction and ethos of the group in terms of its diversified wealth management services.'

The Close Brothers group is the biggest merchant banking company currently listed on the London Stock Exchange, with a market capitalisation of approximately £1.5bn. Established in 1878 the Close Brothers Group did not extend its operations to the Isle of Man until 1999 when it bought Manx company Rea Brothers. Worldwide Close Brothers Group has enjoyed increasing yearly profits for over a quarter of a century.

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