Close Brothers Group PLC
LSE:CBG
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Close Brothers Group PLC
LSE:CBG
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Close Brothers Group PLC
Close Brothers Group Plc operates as a merchant banking group, which provides lending, deposit taking, securities trading and wealth management services. The firm provides lending, deposit taking, wealth management services and securities trading. The firm operates through three segments: Banking, Securities and Asset Management. The Banking segment provides lending to small businesses and individuals, with an emphasis on specialist finance. The company also offers deposit-taking services to the United Kingdom businesses and individuals. Its portfolio of solutions include aviation and marine, broker finance, brewery rentals, asset-based lending, commercial vehicle hire, insurance premium finance, invoice finance, motor finance, property finance, professional services finance, and technology services. The Securities segment provides trading services in the United Kingdom through Winterflood, a market-maker. The Asset Management segment provides a range of financial advice, investment management and online investing services to private clients and professional advisors.
Close Brothers Group Plc operates as a merchant banking group, which provides lending, deposit taking, securities trading and wealth management services. The firm provides lending, deposit taking, wealth management services and securities trading. The firm operates through three segments: Banking, Securities and Asset Management. The Banking segment provides lending to small businesses and individuals, with an emphasis on specialist finance. The company also offers deposit-taking services to the United Kingdom businesses and individuals. Its portfolio of solutions include aviation and marine, broker finance, brewery rentals, asset-based lending, commercial vehicle hire, insurance premium finance, invoice finance, motor finance, property finance, professional services finance, and technology services. The Securities segment provides trading services in the United Kingdom through Winterflood, a market-maker. The Asset Management segment provides a range of financial advice, investment management and online investing services to private clients and professional advisors.
Provision: Management took an additional GBP 135 million charge for motor finance commissions (bringing the total to GBP 300 million) and says the provision is based on probability-weighted scenarios — the final FCA scheme could be materially higher or lower.
Profitability: Adjusted operating profit was GBP 65.2 million in H1, return on average tangible equity 6.3%, and the group reported a statutory loss after tax of GBP 64.4 million driven by the motor-commission provision.
Capital: CET1 strengthened to 14.3% (50 bps increase) after the additional provision and Winterflood sale; management expects to remain above the 12%–13% medium-term target range and says Basel 3.1 will raise RWAs by less than 10%.
Costs / transformation: The group accelerated its cost program — delivered GBP 25 million annualised in 2025, now expects ~GBP 25 million in 2026 and GBP 60 million of annualised savings by end-2027 (one year earlier than prior guidance) with ~600 FTE reduction targeted.
Loan book & NIM: Loan book reduced 2% (1% underlying excluding runoffs); group NIM 7.1% in H1 but management now expects NIM slightly below 7% for FY2026 due to mix effects.
Divisional performance: Commercial and retail remained resilient (commercial profit GBP 40.7 million; retail GBP 17.5 million; property GBP 29.8 million) with motor and asset finance growing while some premium finance and Novitas positions were wound down.
Liquidity & funding: Treasury assets were reduced 20% to GBP 2.2 billion as elevated liquidity normalised; deposits now 54% of funding (retail deposits GBP 6.3 billion), cost of funding fell to 4.9% and average funding maturity is ~18 months.
