Profits declined at C Hoare & Co for the year to 31 March 2020, as the bank readied itself for the fallout from the coronavirus pandemic.

Pre-tax profits sat at £21.7 million for the year, compared with the prior year’s £32.5 million. This was against income (flat year-on-year) of £124 million.

Operating expenses were up around 4 percent to £86.8 million, while provisions for underperforming loans more than doubled to £15.4 million.

The bank’s cost/income ratio deteriorated slightly from 67.6 percent last year to 70 percent.

Chief executive Steven Cooper, an ex-Barclays banker who joined C Hoare & Co in early 2019, said extra provision had been made for clients struggling to pay in light of the Covid-19 pandemic.

Extra expenses had also been incurred as a result of setting up 98 percent of the workforce to work from home. C Hoare & Co’s FTE headcount for the year to 31 March was 413, up from 386 a year earlier. Mr Cooper pointed out that investment in technology would benefit the bank on an ongoing basis.

Customer deposits increased by 9.1 percent to £4.8 billion and loans by 6.3 percent to £1.8 billion. The bank had a common equity tier 1 capital ratio of 21.5 percent  and total capital of £394 million at the year end.

Mr Cooper said the bank was still issuing new loans and had used a combination of email, letters, website content and direct calls to keep in touch with its clients during the lockdown period, with call volumes more than doubling.

Mr Cooper said he expected to see a compression of the bank’s income in the coming year as it was affected by rock bottom interest rates and fewer client card transactions.

In the meantime, the bank was focused on serving its “full pipeline” of new business and treating customers “fairly and consistently” where they were having trouble meeting obligations, Mr Cooper said.