Close Brothers raises cost-cutting target as job cuts begin
Close Brothers has dialled up its cost-cutting plans and said it was “well into next stage of restructuring” after revealing it would slash its headcount by around 20 per cent earlier this year. The FTSE 250 bank said on Tuesday it had delivered £36m of savings in its latest financial year, coming ahead of the [...]
Close Brothers has increased its target for cost-cutting measures, raising the goal from £25 million to an anticipated £60 million by 2027. The FTSE 250 bank has already recorded £36 million in savings, surpassing its initial target. The lender announced on Tuesday that its transformation program has gained significant momentum, with plans in place for the next stage of restructuring.
In March, Close Brothers disclosed that it would cut 600 full-time roles by the end of 2027, accounting for approximately 20% of its total workforce. Restructuring costs, which rose from £2.3 million in 2025 to £14.3 million in the latest year, are primarily due to redundancies and are expected to reach between £30 million and £40 million in the following year.
Close Brothers is exploring the use of artificial intelligence to enhance efficiency and develop its offerings. The bank reported a pre-tax loss of £60.3 million for the 12 months ending July 2026, a sharp reduction from the £122.4 million loss in the prior year. However, the firm remains impacted by the ongoing motor finance scandal, with provisions for potential payouts at £320 million.
The legal challenges to the Financial Conduct Authority's consumer redress scheme are expected to be heard in the Upper Tribunal by February 2027, putting further pressure on Close Brothers' balance sheet. Operating income also declined by 6% to £642.9 million, and the net interest margin decreased from 7.2% to 6.9%.
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