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Financial services company Close Brothers flagged a jump in bad loan provisions across its businesses as the impact of Covid-19 was expected to lead to higher loan defaults.
Bad loan provisions jumped to £86.7m in the quarter from £36.7m reported in the first half, with a bad debt ratio of 2.1% year-to-date, up from 0.9%.
In its banking business, the loan book reduced by 1.2% to £7.53bn in the third quarter, the net interest margin decreased slightly to 7.7% year-to-date from 7.8% in the first half of the year, reflecting the 'impact of Covid-19 on new business levels and lower fee income, particularly in April,' the company said.
In its asset management business, annualised net inflows grew 10% year-to-date, while managed assets were impacted by negative market movements, reducing to £11.8bn from £12.7bn in the second quarter.
Winterflood, meanwhile, experienced a substantial increase in trading volumes since the Covid-19 outbreak recording third quarter daily average volumes almost double those in the first half, the company said.