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Close Brothers suspends operations of specialist lender Close Mortgages

Investment bank Close Brothers has revealed in its results that it has suspended the operations of its specialist lender Close Mortgages.

It says that this was in the light of uneconomic returns available from the specialist mortgage sector.

The bank says that the incidence of bad debt throughout its loan book has been satisfactorily low.

It says that this is evidenced by the charge to the profit and loss account, expressed as a percentage of average customer loans, which remained
below its long term average, at 1.1 per cent.

Close Brothers says that this charge is very comfortably covered by the level of pre-bad debt,pre-tax profit of 4.8 per cent, a cover of more than 4 times.

This comes as the bank announces a banking profit of £72 million (2006: £74 million).

The investment bank launched its subsidiary in July 2006 after months of speculation that it would be launching a lending arm.

It begun by offering buy to let products exclusively via Close-owned broking network Mortgage Intelligence.

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