Close Brothers (LSE:CBG) delivered a solid performance in the third quarter of its 2026 financial year, with profitability across its lending operations remaining resilient despite continued pressure from a softer property market and the planned reduction of certain premium finance portfolios. The specialist banking group reported a year-to-date net interest margin of 7.0%, while its loan book increased 1% to £9.3 billion.
The company said it is continuing to accelerate its transformation and efficiency programme, with annualised cost savings now expected to exceed £25 million. Adjusted operating expenses are also forecast to come in below previous guidance. Asset quality remained stable during the period, supported by a bad debt ratio of 0.8%, while capital levels stayed strong with a CET1 ratio of 14.3% and total capital ratio of 19.5%.
During the quarter, Close Brothers increased its provision related to the FCA’s motor finance consumer redress scheme to £320 million, including an additional £30 million charge recognised in the period. Despite the higher provision, management said the group’s capital position remains sufficiently robust to absorb the impact while continuing to invest in future growth initiatives.
The bank reiterated that it remains on track to meet full-year guidance during what it described as a transitional year for the business. Management emphasised the importance of balancing the financial impact of regulatory motor finance issues with maintaining strategic momentum and preserving balance sheet strength.
The company’s broader outlook continues to be affected by weaker recent financial performance, including declining revenue, reported losses and higher leverage levels, although these pressures have been partly offset by a recovery in operating and free cash flow. Technical indicators remain moderately supportive, with the share price trading above major moving averages and momentum measures remaining positive. However, valuation metrics continue to be constrained by negative earnings and the lack of dividend payments.
More about Close Brothers Group
Close Brothers Group is a UK-based specialist banking group focused on lending and deposit-taking services across the United Kingdom and Ireland. The company operates through a range of niche finance divisions, including motor finance, invoice finance, property finance and premium finance, and positions itself as a provider of disciplined, high-margin lending solutions that support businesses and consumers across the UK economy.
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