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Close Bros suspends specialist mortgage business

Close Brothers has suspended the operations of its specialist lender Close Mortgages.

The investment bank said in its results this week that it had decided to suspend business temporarily in light of uneconomic returns available from the specialist mortgage sector.

It launched the subsidiary in July 2006 and began by offering buy-to-let products exclusively via Close-owned broking network Mortgage Intelligence.

Brentchase Financial Services mortgage specialist Mike Fitzgerald says he is not surprised by the move.

He says: “Every day, something like this happens. It is just more tightening.” Fitzgerald says the small size of Close Mortgages means the move will not have a significant impact on the market.

Close Brothers says its banking profit in the year to the end of July was £72m compared with £74m the previous year. It says the incidence of bad debt throughout its loan book has been satisfactorily low.

The bank says this is shown by the charge to the profit and loss account, expressed as a percentage of average customer loans, which remains below its long-term average at 1.1 per cent.

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