Close Brothers Group (LON:CBG) Posts Quarterly Earnings Results

Close Brothers Group (LON:CBG) announced its quarterly earnings data on Tuesday. The company reported GBX 47.50 earnings per share for the quarter, Digital Look Earnings reports. Close Brothers Group had a negative return on equity of 2.03% and a negative net margin of 2.50%.

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

• Loan growth regained momentum, with underlying growth of 2% for FY2026 and 4% in the second half; all three divisions grew in the fourth quarter. Management expects FY2027 growth of 5%–10%, subject to market conditions.
• The cost-reduction program is ahead of schedule, delivering approximately £36 million of annualized savings versus a £25 million target. Close Brothers now expects to exceed £60 million of annualized savings by the end of FY2027 and achieve double-digit ROTE by FY2028.
• Capital and credit metrics remained resilient, with a 14.1% CET1 ratio, robust liquidity, and a 1.0% bad debt ratio below the 1.2% long-term average. Management expects credit quality to remain sound in FY2027, although Basel 3.1 is expected to reduce CET1 by about 80 basis points.
• FY2026 adjusted operating profit fell to £120 million from £144 million as income declined 6%, reflecting business repositioning, lower margins, and a smaller average loan book. Net interest margin is expected to decline by a further approximately 0.1% in FY2027 due to business mix changes.
• The board did not declare a final dividend for FY2026 because of continued uncertainty surrounding the FCA motor-finance redress scheme and related legal challenges. The provision remains approximately £320 million, with the ultimate cost still dependent on the outcome of the proceedings.

Close Brothers Group Trading Up 12.0%

Shares of Close Brothers Group stock opened at GBX 432.42 on Tuesday. Close Brothers Group has a 12-month low of GBX 318.40 and a 12-month high of GBX 556.15. The company has a market cap of £651.74 million, a price-to-earnings ratio of -12.25, a PEG ratio of 1.87 and a beta of 1.24. The company’s 50-day moving average price is GBX 415.72 and its 200-day moving average price is GBX 425.05.

Insider Buying and Selling

In related news, insider Fiona McCarthy sold 1,626 shares of the company’s stock in a transaction that occurred on Friday, July 31st. The shares were sold at an average price of GBX 426, for a total transaction of £6,926.76. Corporate insiders own 2.21% of the company’s stock.

Analysts Set New Price Targets

Separately, Royal Bank Of Canada downgraded shares of Close Brothers Group to a “sector perform” rating and reduced their target price for the stock from GBX 625 to GBX 470 in a research note on Monday, July 6th. Five investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of GBX 481.25.

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.