Leopold gains as big banks stumble

INDEPENDENT private bank Leopold Joseph is picking up well-heeled clients who are no longer prepared to tolerate the potential conflicts of interest of the large investment banking groups.

The tiny listed bank boosted its client base from 5,000 to 6,000 in the year to March as wealthy customers defected from some of the big American and Continental banks. Chief executive Michael Quicke said some had been 'whipsawed' by technology markets and were looking for a bank with a more 'old-fashioned attitude to looking after money'.

Private banks within larger investment banks have been plagued by worries about potential conflicts of interest, especially in the wake of the Merrill Lynch affair. Analysts there were revealed to have recommended that their clients buy shares they privately regarded as rubbish. Merrill agreed to pay a $100m (£67m) fine to settle the affair.

The bank reported a resilient set of figures, given the market turmoil, with pre-tax profits down 8% to £2.9m. The final dividend is held at 18p, making an unchanged 24p total.

Costs of installing a new computer system and a profitability review weighed on profits. The bank again made no provision for bad debts, confident in the quality of its £140m loan book. It also revealed that it had axed the final-salary pension scheme for new recruits, replacing it with a cheaper money-purchase arrangement.

The outlook remained 'very promising' despite the least benign economic environment for many years, it said. The shares, which have defied the sliding market trend over the past six months, fell 2 1/2p to 857 1/2p. 'We've had quite a lot of our clients wanting to become shareholders,' Quicke said.