Close Brothers sells Winterflood for £104m
The troubled merchant bank Close Brothers said on Friday that it would offload the equities business to Marex, a British broker focused on commodities that is listed in the United States.
The sale comes two years after the death at 86 of Brian Winterflood, a veteran of the British stock market, who set up his firm 37 years ago.
The late City grandee was a champion of share dealing in smaller companies whose career spanned the golden age of the trading floor before the rise of electronic dealing, an innovation he also seized upon.
He entered the market in 1953 as a messenger for a stockbroker, lived through the Big Bang deregulation of the Square Mile in 1986 and two years later founded the market-maker that bears his name, which was sold to Close Brothers in 1993. A spokeswoman for Marex said it planned to keep the Winterflood brand.
The London-listed Close Brothers, itself a venerable name that can trace its roots to 1878, has been engulfed in turmoil since January last year when the Financial Conduct Authority began an inquiry into car loans.
There is speculation that the motor finance industry will be forced to pay out tens of billions of pounds in compensation to borrowers, although this will hinge partly on a Supreme Court ruling expected next week.
Motor finance is a big part of Close Brothers' business and it has taken a series of emergency actions to bolster its capital position by more than £400 million to prepare for the scandal's fallout. These included suspending dividends and selling its asset management division.
Offloading Winterflood leaves Close Brothers focused on specialist lending and will increase its common equity tier one capital ratio, a measure of balance sheet strength, by about 30 basis points to 14.3 per cent when the deal goes through, and then by a further 25 basis points later.
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