Close Brothers Group (LON:CBG) Issues Earnings Results

Key Points

• The group booked an incremental £135m charge (bringing the Motor Finance Commission provision to £300m), producing a statutory loss after tax of £64.4m and leaving the final cost dependent on FCA redress rules.
• Management has accelerated its transformation, targeting ~£25m of annualised savings in 2026 and ~£60m by end‑2027, expects a c.600 FTE reduction and a path to double‑digit ROTE by 2028.
• Capital and funding remain solid with a post‑provision CET1 ratio of 14.3%, a post‑period £250m Tier‑2 issuance and an expected <10% RWA impact from Basel 3.1, providing headroom to absorb a range of FCA outcomes.

Close Brothers Group (LON:CBG - Get Free Report) released its earnings results on Tuesday. The company reported GBX 27.10 earnings per share for the quarter, Digital Look Earnings reports. Close Brothers Group had a negative net margin of 8.70% and a negative return on equity of 5.83%.

Here are the key takeaways from Close Brothers Group's conference call:

• The group booked an incremental £135m charge (bringing the total Motor Finance Commission provision to £300m), producing a statutory loss after tax of £64.4m and leaving the final cost dependent on the FCA's redress rules.
• Management has accelerated its transformation, targeting ~£25m of annualized savings in 2026 and ~£60m by end‑2027 (ahead of plan), with an expected c.600 FTE reduction and a stated path to double‑digit ROTE by 2028.
• Capital and funding remain robust with a reported CET1 ratio of 14.3% after provisions, a leverage ratio of 13.5%, a post‑period £250m Tier 2 issuance, and an expected <10% RWA impact from Basel 3.1 — management says this provides headroom to absorb a range of FCA outcomes.
• Operationally the half was mixed — loan book down 2% (1% underlying) while motor and asset finance grew, NIM was strong at 7.1%, bad debt ratio 80bps, and management guides loan growth of 5%–10% through the cycle with group costs around £450m in 2026 falling to £410m–£430m by 2028.

Close Brothers Group Stock Performance

LON CBG opened at GBX 346 on Tuesday. The stock's fifty day moving average is GBX 490.07 and its two-hundred day moving average is GBX 473.01. The firm has a market capitalization of £520.89 million, a P/E ratio of -5.17, a price-to-earnings-growth ratio of 1.87 and a beta of 1.18. Close Brothers Group has a fifty-two week low of GBX 246.80 and a fifty-two week high of GBX 563.50.

Analysts Set New Price Targets

Several brokerages recently commented on CBG. Peel Hunt reissued an "add" rating and issued a GBX 300 price target on shares of Close Brothers Group in a report on Tuesday, November 25th. Shore Capital Group reissued a "hold" rating and set a GBX 510 target price on shares of Close Brothers Group in a research note on Thursday, November 20th. Deutsche Bank Aktiengesellschaft upped their price target on shares of Close Brothers Group from GBX 550 to GBX 570 and gave the stock a "buy" rating in a research report on Friday, January 23rd. Finally, Royal Bank Of Canada raised shares of Close Brothers Group to an "outperform" rating and raised their price target for the company from GBX 475 to GBX 625 in a research note on Friday, January 16th. Five investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat, Close Brothers Group currently has a consensus rating of "Moderate Buy" and a consensus target price of GBX 502.50.

Insider Activity

In related news, insider Mike Morgan purchased 2,841 shares of Close Brothers Group stock in a transaction dated Monday, January 12th. The shares were acquired at an average price of GBX 507 per share, for a total transaction of £14,403.87. Over the last three months, insiders acquired 2,902 shares of company stock valued at $1,469,952. 2.19% of the stock is owned by company insiders.

Close Brothers Group Company Profile

Close Brothers Group plc, a merchant banking company, engages in the provision of financial services to small businesses and individuals in the United Kingdom. It operates through five segments: Commercial, Retail, Property, Asset Management, and Securities. The company offers banking services comprising of debt factoring, invoice discounting, asset-based lending; financing for SMEs, residential housing, transport, industrial equipment, renewable energy, motorcycle, used car, and commercial vehicle financing; insurance, refurbishment, and bridging financing, savings products for individuals and corporates, hire purchase, lease, and loan related services.

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