Close Brothers narrows loss, tightens costs as loan book shrinks

Close Brothers Group ( (GB:CBG) ) has issued an update.

Close Brothers Group reported a resilient but weaker first-half performance for the six months to 31 January 2026, as adjusted operating profit from continuing operations fell 19% to £65.2 million and return on average tangible equity declined to 6.3%. The statutory loss before tax narrowed to £65.5 million, largely due to an earlier £135 million motor finance provision, while the loan book contracted 2% to £9.2 billion amid soft property markets and deliberate exits from certain lines.

Net interest margin across its lending divisions held firm at 7.1%, with bad debts improving to a 0.8% ratio after an IFRS 9 model update for motor finance, helping offset income pressure from a lower average loan book. The CET1 capital ratio strengthened to 14.3% following the sale of Winterflood and reduced risk-weighted assets, supporting the bank’s ability to absorb potential outcomes from the FCA’s proposed motor finance commission redress scheme.

Management has accelerated a transformation programme now focused on optimisation, targeting about £25 million of annualised cost savings in the current financial year and around £60 million by the end of 2027, one year earlier than previously planned. This drive includes higher restructuring spend and a planned reduction of roughly 600 roles by 2027, with the bank reiterating its ambition to achieve double-digit returns on tangible equity by the 2028 financial year, supported by a refocused loan book geared to selected growth markets.

The most recent analyst rating on (GB:CBG) stock is a Hold with a £358.00 price target. To see the full list of analyst forecasts on Close Brothers Group stock, see the GB:CBG Stock Forecast page.

Spark’s Take on CBG Stock

According to Spark, TipRanks’ AI Analyst, CBG is a Neutral.

The score is held back primarily by deteriorating profitability (revenue drop and net loss) and higher leverage, alongside bearish technicals with broad downtrend signals. A rebound in cash flow and a low P/E provide some offset, but not enough to outweigh the fundamental and momentum risks.

To see Spark’s full report on CBG stock, click here.

More about Close Brothers Group

Close Brothers Group is a UK-based specialist banking group that has served the domestic business community for nearly 150 years. The lender focuses on niche commercial, retail and property finance, including premium finance and motor finance, and targets segments where it sees strong and sustainable market opportunities.

Average Trading Volume: 398,563

Technical Sentiment Signal: Sell

Current Market Cap: £533.7M

For an in-depth examination of CBG stock, go to TipRanks’ Overview page.