Close Brothers Group PLC

Latest Results (05.03.2026):

Close Brothers Group PLC — Q4 2025 (year ended 31 July 2025): The group reported adjusted operating profit from continuing operations of £144.3m (down 14% y/y) and a statutory operating loss before tax of £122.4m driven by a £165.0m provision for historical motor finance commissions plus other adjusting items. Loan book fell 4% to c.£9.5bn, net interest margin remained strong at 7.2% and bad debt ratio stayed at 1.0%. CET1 capital was 13.8% (c.14.3% pro‑forma including the announced Winterflood sale). The board will not pay a final ordinary dividend for the 2025 year and the group is delivering cost savings while refocusing its portfolio on specialist banking businesses.

Profitability (adjusted vs statutory)

Adjusted operating profit (continuing) £144.3m (2024: £167.6m, -14%). Statutory operating loss before tax £122.4m (2024: profit £132.7m) after £165.0m motor commissions provision, £33.0m proactive remediation provision and £30.0m impairment in Vehicle Hire plus other adjusting items.

Key provisions and litigation

The £165.0m provision for motor finance commissions was retained after reassessment despite a favourable Supreme Court judgment on certain legal points; the group also set aside £33.0m for customer remediation related to early settlements. Outcome still depends on FCA consultation and potential industry redress scheme.

Capital and liquidity

CET1 ratio 13.8% at 31 July 2025 (pro‑forma c.14.3% reflecting Winterflood sale). The group reports c.410bps headroom to applicable CET1 requirements and held elevated liquidity (12‑month average LCR ~1,012%).

Loan book, margins and credit quality

Closing loan book c.£9.5bn (-4% y/y). Net interest margin 7.2% (2024: 7.4%); group expects NIM slightly below 7% in FY2026. Bad debt ratio 1.0% (in line with prior year), with impairment charges down to £91.8m.

Costs, savings and efficiency

Adjusted operating expenses £445.1m (+3%). The group has delivered c.£25m of annualised savings to date and targets at least c.£20m of additional annualised savings per annum in each of the next three years; expects adjusted operating expenses to be within £440–460m in FY2026 and £410–430m by FY2028.

Strategic portfolio moves

Major simplification actions completed or announced: sale of Close Brothers Asset Management (completed Feb 2025), sale of Winterflood (announced Jul 2025), sale of Brewery Rentals, repositioning of Premium Finance toward commercial lines, and decision to exit Vehicle Hire (wind‑down).

Funding and ratings

Customer deposits £8.8bn (up slightly); total available funding c.£12.7bn. Average funding maturity allocated to loan book ~18 months. Moody’s and Fitch ratings remain investment grade but under review/negative outlook following recent developments.

Shareholder returns and guidance

No ordinary final dividend for the 2025 year while uncertainty over motor commissions remains. Guidance: bad debt ratio expected below long‑term average of 1.2% in FY2026; Group (central functions) operating loss c.£50m in FY2026; modest restructuring and single‑digit millions of motor‑related complaint costs expected in FY2026.