Close Brothers trims pre‑tax loss, pulls final dividend

(Sharecast News) - Merchant banking group Close Brothers narrowed its pre‑tax operating loss in 2026, though adjusted operating profits also declined, as the group pushed ahead with its simplification and cost‑cutting programme. Close Brothers' pre-tax operating loss fell 51% to £60.3m, while adjusted operating profits dropped 17% to £120.3m amid business repositioning and softer income. Adjusted operating income slipped 6% to £642.9m, with net interest margins easing to 6.9% from 7.2%.

Costs were tightly managed, with adjusted operating expenses reduced to £430.9m, helped by around £36m of annualised savings delivered ahead of schedule. Close Brothers now expects to exceed £60m of annualised savings by FY27.

The FTSE 250-listed group's loan book was flat at £9.5bn, though underlying growth reached 2% year‑on‑year and 4% in the second half. Impairment losses were broadly unchanged at £91.7m, keeping the bad debt ratio steady at 1.0%.

Close Brothers also booked an additional £164.7m provision related to motor finance commissions, taking the total to around £320m. It also annonuced that given ongoing uncertainty around the FCA's motor finance redress scheme, the firm will not pay a final dividend for FY26.

Looking ahead, management said progress in FY26 supported its ambition to deliver double‑digit RoTE by FY28. Close Brothers expects underlying loan book growth of 5% to 10% in FY27, adjusted operating expenses of about £430m, and a slightly lower net interest margin. Medium‑term guidance remained unchanged, including loan book growth of 5% to 10% through the cycle and an expense/income ratio below 60% by FY28.

As of 0900 BST, Close Brothers shares were up 7.93% at 416.60p.







Reporting by Iain Gilbert at Sharecast.com

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