Close Brothers reports another annual loss as motor-finance provision rises

Close Brothers ($CBG) reported a £60.3 million statutory operating loss before tax from continuing operations for the year to July, narrowing from £122.4 million. Adjusted operating profit nevertheless fell 17% to £120.3 million. The specialist lender added approximately £165 million to its motor-finance redress provision, taking the total to about £320 million, and will not pay a final dividend.

Annualized cost savings reached approximately £36 million, ahead of the £25 million target, and management now expects more than £60 million by the end of the next financial year. The £9.5 billion loan book was unchanged year over year, although growth resumed in the second half. A 14.1% common-equity Tier 1 ratio offers a capital buffer, but the ultimate redress outcome and forthcoming regulatory changes remain important constraints on distributions and growth.

Sources:

• Close Brothers RNS preliminary results