Close Brothers reports FY26 loss, suspends dividend on motor-finance uncertainty
Close Brothers (LON:CBRO) reported a preliminary loss of £63.4 million for the fiscal year 2026, down from a £77.9 million loss the previous year. Adjusted operating profit declined 17% to £120.3 million, while adjusted operating income fell 6% to £642.9 million. The company suspended its final dividend for the year due to uncertainty surrounding legal challenges to the Financial Conduct Authority's motor-finance consumer redress scheme.
A £164.7 million charge related to motor-finance commissions, bringing the total provision to around £320 million, impacted the results. Net interest margin declined to 6.9% from 7.2%, while the loan book remained largely unchanged at £9.5 billion. On an underlying basis, the loan book grew 2% year-over-year and 4% in the second half, with all divisions showing gains in the final quarter.
For FY27, Close Brothers anticipates loan-book growth of 5%-10%, adjusted operating expenses of about £430 million, and a net interest margin slightly below the FY26 level. The bank aims for a double-digit return on tangible equity by FY28, with expenses expected to fall to the lower end of the £410 million-£430 million range by FY28.
Close Brothers ended FY26 with a CET1 ratio of 14.1%, exceeding its 12%-13% medium-term target range.
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