Close Brothers Group has reported a pre-tax operating loss of £103 million for the first half of its financial year, leading to a 14% decline in its share price. This big drop is primarily due to a £165 million provision set aside in anticipation of a potential customer redress scheme, pending the outcome of the Financial Conduct Authority’s (FCA) review of motor finance commission arrangements and an upcoming Supreme Court appeal scheduled for early April.
As a result, Close Brothers has suspended interim dividends for the first half of the 2025 financial year. Chief Executive Mike Morgan has emphasised the company’s focus on simplification, operational efficiency, and sustainable growth. He stated that these efforts aim to position the group for strong, sustainable returns once the motor finance commission issues are resolved. Morgan estimates that the total impact of the motor finance investigation could reach approximately £200 million, accounting for advisory fees, complaints handling, operational, and legal costs, in addition to the redress provision.
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