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Close Brothers annual profit slips; CEO Prebensen to step down

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(Reuters) – Merchant bank Close Brothers Group Plc on Tuesday posted lower annual profit and said Chief Executive Officer Preben Prebensen will leave the company at a time when it faces a downturn in its market-facing businesses.

Prebensen has decided to leave after a decade in the role and will remain with Close Brothers for the next 12 months, the mid-cap firm said in a separate statement.

His departure comes as Close Brothers’ market-maker business, Winterflood, reported a near 30% plunge in full-year profit due to what the company called “low levels of investor risk appetite throughout the year”.

That was reflected in a 40% drop year to date in the CBOE Volatility index versus a 130% surge in 2018.

Market volatility generally tends to bolster profits at firms such as Winterflood, but it has recently been rather unimpressive as traders wait out macroeconomic events, including U.S.-China trade war and the UK’s painfully long Brexit process.

Winterflood facing challenging conditions contributed in part to a 3% fall in adjusted operating profit to 270.5 million pounds for the 12 months ended July 31, roughly in line with the 270 million pounds estimated by 14 analysts as per company-supplied consensus.

The company, which also provides loans, wealth management and securities trading services, reported a slight dip in net interest margin to 7.9% from 8%, while loan book climbed 5.7% to 7.6 billion pounds.

(Reporting by Muvija M in Bengaluru; Editing by Rashmi Aich)

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