British financial services group Close Brothers said a weak performance at its securities division would hit first-half results, adding market conditions were uncertain for its second half.

Close Brothers, whose services include merchant banking, securities dealing and wealth management, said on Friday its Winterflood securities arm had suffered a fall in income, while its Seydler unit had made a small loss.

Its banking arm had a better performance, with the value of its loan book increasing 9 percent to 3.8 billion pounds in the five months to end-December.

As expected, the group's first-half performance will be affected by a lower contribution from securities notwithstanding a continued strong performance from banking, Close Brothers said.

Financial market conditions have remained difficult in January and are uncertain for the second half of the financial year. However, our businesses remain well positioned and we continue to see a strong performance in the banking division.

Close Brothers shares fell by 4.3 percent to 630.5 pence in early morning trade, giving the company a market capitalisation of around 925 million pounds.

Numis Securities kept a hold rating on the stock but said analysts were likely to cut their estimates on Close Brothers' earnings and added it preferred rival Investec .

Close retains a premium valuation to the specialist lenders sub-sector and we believe there is better value in the more diversified Investec which derives circa 40 percent of its profits from high value asset and wealth management yet commands a discount valuation, Numis wrote in a research note.

(Reporting by Sudip Kar-Gupta; Editing by Dan Lalor)