**Summary**
Close Brothers Group PLC announced its final results for the year ended 31 July 2025, highlighting a focus on strengthening capital, simplifying the business, and repositioning for growth. The group reported an adjusted operating profit of £144 million, despite challenges like a £165 million provision for motor finance commissions. Key strategic actions included selling non-core businesses (Close Brothers Asset Management, Winterflood, and Brewery Rentals), exiting the Vehicle Hire business, and repositioning the Premium Finance business. These moves aim to streamline operations, reduce costs, and focus on core markets.
**Financial Highlights**
**Adjusted Operating Profit** £144.3 million (down 14% from £167.6 million in 2024).
**Statutory Operating Loss** £122.4 million (compared to a profit of £132.7 million in 2024), due to adjusting items like motor finance commissions and restructuring costs.
**CET1 Capital Ratio** 13.8% (14.3% pro-forma after Winterflood sale).
**Loan Book** £9.5 billion (down 4% from £9.8 billion in 2024).
**Cost Savings** £25 million annualized savings achieved, with an additional £20 million per year expected over the next three years.
**Strategic Actions**
1. **Simplification** Sold Close Brothers Asset Management, Winterflood, and Brewery Rentals. Repositioned Premium Finance to focus on commercial lines.
2. **Exit Vehicle Hire** Decided to exit the loss-making Vehicle Hire business, resulting in a £30 million impairment charge.
3. **Cost Efficiency** Delivered £25 million in annualized cost savings and aims to save an additional £20 million per year over the next three years through further consolidation, outsourcing, and technology optimization.
4. **Growth Focus** Broadening product offerings in Property Finance, expanding Motor Finance distribution, and growing Commercial Lines in Premium Finance.
**Outlook**
**Net Interest Margin** Expected to be slightly <mark style="background-color:yellow">below</mark> 7% in 2026 due to loan book mix impacts.
**Bad Debt Ratio** Expected to remain below the long-term average of 1.2% in 2026.
**Dividends** No final dividend for 2025 due to uncertainty around motor finance commissions. Reinstatement will be reviewed once there is clarity.
**Capital** Aim to maintain CET1 ratio above 12%-13% medium-term target.
**Leadership and Future**
CEO Mike Morgan emphasized the groups focus on execution and returning to double-digit returns by 2028. The group is confident in its simplified, focused portfolio and its ability to drive efficiency and growth in core markets. A full update on the pathway to rising returns is planned once there is clarity on the FCAs consultation on motor finance commissions.