A rise in Close Brothers' commercial banking profits for the year to July 31 has failed to compensate for falls in fund management, private equity, corporate finance and market-making, resulting in a drop in pre-tax profit from £90m (€110m) to £70m.

The UK merchant bank blamed the decline on market conditions and said its corporate finance unit had been the worst hit. Success in the areas of corporate restructuring and debt advisory failed to make up for falls in mergers and acquisitions advisory work and the unit's profits fell from £12m to £2m. The tough conditions led to staff cuts, with 27 leaving last November, followed by one managing director and 20% of other staff in July, although the firm added staff to its French and German offices.