**Summary of Close Brothers Group PLC Half-Year Report for Six Months to 31 January 2026**
**Overview**
Close Brothers Group PLC, a UK specialist banking group, reported its half-year results for the six months ending 31 January 2026. The group demonstrated resilience despite challenging market conditions, focusing on cost discipline, credit performance, and strategic repositioning. Key highlights include a marginal reduction in the loan book, continued growth in core businesses, and a strong CET1 capital ratio of 14.3%. The group is well-positioned for future growth, with accelerated cost savings plans and a focus on simplification, optimization, and growth.
**Financial Performance**
**Adjusted Operating Profit**£65.2 million (H1 2025: £80.5 million), reflecting a 19% decrease due to reduced income, partly offset by lower impairment losses.
**Operating Loss Before Tax**£65.5 million (H1 2025: £102.2 million), primarily due to a £135.0 million provision for motor finance commissions.
**Net Interest Margin (NIM)**7.1% (H1 2025: 7.3%), expected to be slightly <mark style="background-color:yellow">below</mark> 7% for the full year.
**Bad Debt Ratio**0.8% (H1 2025: 1.0%), expected to remain below the long-term average of 1.2%.
**Loan Book**Reduced by 2% to £9.2 billion (31 July 2025: £9.5 billion), with underlying decrease of 1% excluding planned exits and run-offs.
**Strategic Initiatives**
**Simplification**Largely complete, with the sale of Close Brothers Asset Management, Winterflood, and Brewery Rentals, and the exit from Vehicle Hire.
**Optimization**Accelerated cost savings plans, targeting £25 million in 2026 and £60 million by 2027, positioning the group for double-digit returns by 2028.
**Growth**Focused on core markets with strong and sustainable opportunities, targeting 5-10% annual growth through the cycle.
**Capital and Funding**
**CET1 Capital Ratio**Increased to 14.3% (31 July 2025: 13.8%), reflecting disposals and lower RWAs, partly offset by motor finance provisions.
**Total Funding**Decreased by 8% to £11.7 billion, covering 124% of the loan book, with a prudent maturity profile.
**Divisions Performance**
**Commercial**Adjusted operating profit decreased to £40.7 million (H1 2025: £50.0 million) due to lower utilization in Invoice Finance and the wind-down of Novitas.
**Retail**Adjusted operating profit increased to £17.5 million (H1 2025: £16.8 million), driven by a Motor Finance impairment release and improved credit performance in Premium Finance.
**Property**Adjusted operating profit declined to £29.8 million (H1 2025: £42.1 million) due to softer demand and increased impairment charges.
**Outlook**
**Cost Savings**Accelerated targets, with £25 million in 2026 and £60 million by 2027.
**NIM**Expected to be slightly below 7% in 2026.
**Bad Debt Ratio**Expected to remain below 1.2% in 2026.
**RoTE**On track to achieve double-digit returns by 2028, rising thereafter.
**Conclusion**
Close Brothers Group PLC demonstrated resilience in the first half of 2026, with a focus on strategic repositioning, cost optimization, and sustainable growth. Despite challenges, the group remains well-capitalized and positioned for future growth, with a clear path to achieving its long-term financial goals.
| Metric | 2025 (£ million) | 2026 (£ million) | Change (%) |
|---|---|---|---|
| Operating loss before tax | (102.2) | (65.5) | 36 |
| Adjusted operating profit | 80.5 | 65.2 | (19) |
| Loss attributable to shareholders | (111.8) | (64.4) | 42 |
| Loan book | 9,500 | 9,200 | (2) |
| CET1 capital ratio | 13.8% | 14.3% | 4 |
| Total assets | 14,071.9 | 12,283.6 | (13) |
| Total liabilities | 12,336.4 | 10,620.8 | (14) |
| Total equity | 1,735.5 | 1,662.8 | (4) |