Close Brothers Group (CBG) H1 2026 earnings summary

Executive summary

• Delivered resilient first-half performance amid challenging market conditions and ongoing business repositioning, with cost discipline and robust net interest margin.

• Completed major simplification, focusing on three core lending divisions: Commercial, Retail, and Property.

• Transformation program underway, targeting GBP 60 million annualized cost savings by 2027, one year ahead of prior guidance, and double-digit RoTE by 2028.

• Strengthened capital position with CET1 ratio at 14.3%, providing significant headroom above regulatory minimum and to absorb potential FCA redress outcomes.

• No interim dividend declared due to ongoing FCA review; dividend policy to be reviewed once financial impact is clearer.

Financial highlights

• Adjusted operating profit for H1 2026 was GBP 65.2 million, down 19% year-over-year.

• Adjusted operating income fell 6% to GBP 327 million; statutory loss after tax was GBP 64.4 million, mainly due to GBP 135 million additional provision for motor finance commissions.

• Loan book decreased 2% to GBP 9.2 billion, reflecting market conditions and business repositioning.

• Net interest margin remained strong at 7.1%; bad debt ratio reduced to 0.8%.

• Adjusted basic EPS (continuing) fell to 27.1p; no interim dividend declared.

Outlook and guidance

• Targeting 5%-10% annual loan book growth through the cycle via core business and new initiatives.

• Accelerated cost savings: now targeting GBP 25 million annualized savings in FY26, GBP 60 million by end FY27.

• Net interest margin expected slightly below 7% for FY 2026 and to remain around this level medium term.

• Bad debt ratio expected to remain below long-term average of 1.2%.

• CET1 capital ratio to be maintained above 12%-13% medium-term target.