Close Brothers Group Reports Challenging Year with Strategic Repositioning

Close Brothers Group ( (CBGPF) ) has released its Q4 earnings. Here is a breakdown of the information Close Brothers Group presented to its investors.

Close Brothers Group, a UK-based specialist banking group, provides lending, deposit-taking, and securities trading services, primarily operating in the United Kingdom and Ireland. In its latest earnings report for the year ending July 31, 2025, the company highlighted a challenging financial year marked by strategic repositioning and significant financial provisions. The group reported an adjusted operating profit of £144 million, despite a statutory operating loss of £122.4 million, largely due to a £165 million provision related to motor finance commissions and other adjusting items.

Key financial metrics revealed a 14% decrease in adjusted operating profit from the previous year, driven by a 2% decline in income and a 3% increase in expenses. The company’s loan book reduced by 4% to £9.5 billion, and the return on average tangible equity decreased to 7.1%. Close Brothers also strengthened its capital position, achieving a CET1 capital ratio of 13.8%, bolstered by strategic divestments, including the sale of Winterflood and Close Brothers Asset Management.

Strategically, Close Brothers has taken decisive actions to simplify its business structure, exiting non-core operations such as the Vehicle Hire business and focusing on areas with attractive risk-adjusted returns. The company has implemented cost-saving measures, achieving £25 million in annualized savings, with plans for further reductions in the coming years. These efforts are part of a broader strategy to drive efficiency and capture growth opportunities across its core markets.

Looking ahead, Close Brothers is focused on leveraging its strong market positions and specialist expertise to become the lender of choice for SMEs in the UK and Ireland. The company aims to return to double-digit returns on tangible equity by the 2028 financial year, contingent on the resolution of ongoing regulatory reviews and market conditions.