Half Year 2025 Close Brothers Group PLC Earnings Call Transcript
Key Points
- Close Brothers Group PLC (CBGPF) delivered robust underlying profit in banking, maintaining strong margins and resilient credit quality.
- The company has made significant progress on cost management initiatives, now expecting GBP25 million of annualized savings by the end of the financial year.
- Successful strategic sale of CBAM is estimated to benefit the CET1 capital ratio by around 120 basis points.
- The company has generated or preserved approximately GBP360 million of CET1 capital over the last 12 months, reflecting a strong commitment to resilience.
- Close Brothers Group PLC (CBGPF) maintains a strong balance sheet with a pro forma CET1 capital ratio of 13.4%, significantly above the minimum regulatory requirement of 9.7%.
- Adjusted operating profit reduced by 15% to GBP75 million, with an operating loss before tax of GBP103 million due to a GBP165 million provision related to motor commissions.
- The loan book reduced by 3% in the first half, driven by seasonality and selective lending.
- The company will not pay an interim dividend in respect of the first half of the financial year due to uncertainty around motor commissions.
- Winterfloods continued to face unfavorable market conditions, resulting in an operating loss of GBP0.8 million.
- There is significant uncertainty around the potential outcomes of the Supreme Court appeals and the FCA's ongoing review of motor commissions, which could impact future financial performance.
Good morning and welcome to the presentation of Close Brothers 2025 half year results. It's an honor to present these results for the first time as the CEO following my appointment in January. I will begin with an overview of the first six months of the financial year, then I will provide an update on my priorities and recent developments in motor finance. After that, I will hand over to Fiona McCarthy, our Group CFO.
She has been with us for almost six years and has done an excellent job overseeing the group's financial planning and analysis function before her recent appointment. She will walk you through our financial performance, and then I will return to update you on the businesses and wrap up on today's presentation. We will be happy to take questions afterwards, both via the telephone conference line and over the webcast. You can submit your questions either during or after the presentation.
Our performance in half one reflects the strength and resilience of our business model. In banking, we delivered robust
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