UPDATE 1-Close Brothers funds drop, bad debts rise

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LONDON, Nov 13 (Reuters) - British investment bank Close Brothers Group Plc (CBRO.L) said funds under management dropped in the first quarter of its financial year while bad debts rose, but it remained soundly funded.

Funds under management as at Oct. 31 were 7.0 billion pounds ($10.83 billion) compared with 8.2 billion pounds on July 31.

"We remain confident that our strong businesses and robust financial position leave us well placed to take advantage of better conditions when markets recover," the bank said.

The group also said bad debts increased relative to the annualised rate for 2008, but that it remained soundly funded from a diverse range of sources.

Close Brothers appointed Raymond Greenshields as an independent non-executive director with effect from Thursday. Greenshields was most recently managing director of Barclays' (BARC.L) wealth management business.

Smaller rival Cenkos Securities (CNKS.L) attempted to take over Close Brothers in January but was rebuffed. (Reporting by Olesya Dmitracova; editing by John Stonestreet)