Close Brothers Group has reported profit attributable to shareholders of £8.4m for the six months ended 31 January 2023, down 91% compared with £95.1m a year ago.

The company said that its results were affected by an increase in provisions associated with the loan book of Novitas, a finance firm that serves the legal sector. Close Brothers decided to shutter Novitas that it bought in 2017.

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Adjusted operating profit, excluding Novitas, dropped 27% to £117.5m in the first half of financial year 2023 from £160.5m in the year ago period.

The group’s adjusted basic earnings per share also decreased to 6.1p from 64.0p, with ordinary dividend per share remained approximately same at 22.5p.

Operating income jumped 1% year-on-year to £474.3m. This was driven by ‘growth in banking offsetting a reduction in income in Asset Management and Winterflood’.

Meanwhile, adjusted operating expenses grew 2% to £299.5m from £293.5m a year earlier.

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In the asset management arm, adjusted operating profit plummeted by 41% to £8.6m from £14.5m a year ago.

Operating income in division declined 7% to £71m, primarily because of negative market movements and reduced client activity.

The group’s managed assets totalled £16bn at the end of January this year, with £474m of net inflows in the first half of 2023.

Close Brothers Group CEO Adrian Sainsbury said: “It has been a challenging six months, with our half year results significantly impacted by the increased provisions in relation to Novitas, as announced previously in January 2023.

“While this is clearly disappointing, our underlying business remains resilient, enabling us to support almost three million customers, including over 360 thousand SMEs, as we continue to lend consistently through this period of uncertainty.”