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Rathbones' profits surge 33% despite £15m legal payout

Rathbones' profits surge 33% despite £15m legal payout

Rathbone Brothers is to pay £15 million to settle a long-running legal dispute involving its former Jersey trust subsidiary and an ex-employee.

The claim against the wealth manager has cost £20 million in total and the settlement cost will be reported as an exceptional item in its full year results.

Chief executive Philip Howell said: 'We are pleased to have closed off this long-running matter and to have removed this uncertainty from our business. Whilst we believe that the underlying Jersey claim would eventually prove unsuccessful and that effective insurance cover would be confirmed following the recent appeal court hearing, we have been mindful that litigation is never without risk and that we could face several more years of very substantial legal expense, having already incurred legal costs of approximately £5 million.

'We have therefore concluded that joining a settlement would be in the best commercial interests of the company, allowing our senior management team to apply its full focus to executing our strategic plans.'

The stock market announcement accompanied Rathbones' first half results which revealed that assets under management rose by 8.6% to £23.9 billion over the six months to the end of June. This helped drive profits up 33.2% to £30.9m year-on-year.

The group said that the acquisitions of Jupiter's private client business and the Tilney London office from Deutsche will have a positive effect on earnings from next year. Rathbones said £617 million, or 95% of the total assets involved in the Tilney deal had been successfully moved over.

The Jupiter acquisition, which will cost a minimum of £32 million, is expected to complete in the third quarter and will add up to £2.1 billion of assets.

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