Close Brothers CEO Adrian Sainsbury is to continue his medical leave of absence which began in September, the company said today in a trading update.

The group will continue existing temporary cover arrangements while he is away, with Mike Morgan, group finance director, supported by Mike Biggs, chairman, and members of the senior management team standing in.

The extension was reported today in a scheduled trading update on the first quarter of its 2025 financial year from 1 August 2024 to 31 October 2024.

The group reported positive figures in the update although some major issues remain in relation to its motor finance operation.

The company is currently embroiled in a legal battle over compensation for motor insurance finance customers. On 25 October 2024, the Court of Appeal published a judgment which upheld the motor commission appeals brought against Close Brothers Limited and FirstRand Bank Limited. The group intends to submit an application for permission to appeal the Court's decision to the Supreme Court imminently.

The company has resumed motor finance business after a temporary pause, it said.  

The group's Close Brothers Asset Management (CBAM) arm delivered “solid” year-to-date annualised net inflows of 4% (FY 2024: 8%).

In the quarter, managed assets increased slightly to £19.5 billion (31 July 2024: £19.3 billion) and total assets increased to £20.6 billion (31 July 2024: £20.4 billion). In its 2024 results, following a comprehensive strategic review, the group announced that it had entered into an agreement to sell CBAM to funds managed by Oaktree Capital Management.

In Banking, the loan book increased 0.6% in the quarter to £10.2 billion (31 July 2024: £10.1 billion). New business volumes were lower in Retail, primarily driven by the temporary pause in new lending in the UK motor finance business.

Securities arm Winterflood's performance continued to be hit by unfavourable market conditions and made an operating loss of £0.7 million in the first quarter (Q1 2024: operating loss of £2.5 million).

Mike Morgan, group finance director, said: "The group delivered a robust performance in the first quarter. In our banking division, customer demand remained healthy, alongside a strong net interest margin and a resilient credit quality. Whilst Winterflood continued to experience unfavourable market conditions, it remains well positioned to benefit when investor appetite returns."

"We are confident in our underlying business, supported by our strong balance sheet and liquidity position, and remain committed to driving it forward. Notwithstanding the significant uncertainty resulting from the FCA's review of historical motor finance commission arrangements and the recent Court of Appeal judgment, our focus is on protecting our valuable franchise. Our core Banking business model remains as relevant as ever as we continue to offer excellent and specialist service to our customers, while maintaining our pricing and underwriting discipline."