Close Brothers FY 2026 adjusted profit falls; not paying annual dividend

Overview

• UK specialist bank's preliminary FY 2026 adjusted operating profit fell 17% as income declined

• Adjusted EPS for FY 2026 declined, with loan book flat but growth in H2

• Company will not pay a final dividend due to uncertainty over motor finance redress

Outlook

• Close Brothers expects FY 2027 underlying loan book growth of 5-10%, subject to market conditions

• Company forecasts FY 2027 adjusted operating expenses of about £430 mln

• Close Brothers targets double-digit RoTE by FY 2028, rising thereafter

Result Drivers

• BUSINESS REPOSITIONING - Co said lower income and profit reflected the repositioning of its business and prevailing market conditions

• COST SAVINGS - Accelerated cost initiatives delivered c.£36 mln of annualised savings, ahead of target, supporting lower expenses

• LOAN BOOK MOMENTUM - Loan book was flat; Underlying loan book grew 2% YoY and 4% in H2, with all divisions growing in Q4, offsetting earlier declines

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Close Brothers Group PLC is GBp512.50, about 32.8% above its September 28 closing price of GBp386.00

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• Sept 28 - Bank of England's Ramsden happy with market reaction to multi-year bond sale plans

• Sept 28 - UK finance minister says 'fiscal discipline' will form core of budget

• Sept 28 - UK's Tullow Oil half-year net loss widens on one-off refinancing fees

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)