Close Brothers Group Plc · LSE:CBG
Close Brothers — FY2025 Earnings Presentation
41 slides from Close Brothers's earnings presentation, Sep 30, 2025
Slide 1: Close Brothers Group plc 2025 Preliminary Results
Close Brothers Group plc 2025 Preliminary Results 30 September 2025
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Close Brothers Group plc (the “Company”) solely for information purposes and does not constitute, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, unde
Slide 3: Agenda
Agenda 01 Introduction 02 Financial update 03 Strategy update and conclusion 04 Appendices Close Brothers Group plc Preliminary Results 2025 3
Slide 4: Introduction
01 Introduction Mike Morgan, Group Chief Executive Close Brothers Group plc Preliminary Results 2025 4
Slide 5: Resetting the business to drive stronger returns
Resetting the business to drive stronger returns Core business strength Stronger balance sheet Momentum on cost savings • FY25 performance reflects a resilient business • Over £400 million of CET1 capital generated or • Delivered annualised cost savings of £25m by and impact of capital and simplific
Slide 6: Transitioning to a focused specialist bank
Transitioning to a focused specialist bank 1878-2023: diversified 2024-25: resetting the 2025-2028: focused merchant banking group business to drive stronger specialist bank returns Strong track record Protecting our valuable Simplify, Optimise, Grow franchise • Disciplined underwriting and pricing
Slide 7: A clear path to double digit returns
A clear path to double digit returns 1 Strong positions in attractive markets 2 A focused specialist bank and a valuable customer franchise 3 A clear strategy to rebuild returns We operate in markets with long-term Our specialist focus, deep customer A simpler, more focused portfolio with demand, of
Slide 8: Financial update
02 Financial update Fiona McCarthy, Group Chief Finance Officer Close Brothers Group plc Preliminary Results 2025 8
Slide 9: Overview of financial performance
Overview of financial performance Adjusted1 operating profit (“AOP”) Operating loss before tax of £122 Strong capital, funding of £144 million; RoTE2 of 7.1% million, mainly driven by £267 and liquidity, with CET1 capital million of adjusting items ratio at 13.8%, c.14.3% following the sale of Winte
Slide 10: Unchanged provision in relation to motor finance commissions
Unchanged provision in relation to motor finance commissions Indicative timeline £165 million provision relating to motor finance commissions unchanged 1-3 Apr 2025 Oct 2025 FCA issues final Supreme Court rules for the Expected FCA Hopcraft appeal redress scheme consultation hearing launch Provision
Slide 11: Operating loss reflects adjusting items
Operating loss reflects adjusting items £165.0 million provision charge in relation to motor Group finance commissions unchanged (£ million) • Covers estimated operational and legal costs and £266.7 million of adjusting items potential remediation for affected customers • Reassessed in light of all
Slide 12: Income statement: resilient underlying performance
Income statement: resilient underlying performance 2025 2024 Change Continuing operations £ million £ million % Adjusted operating income 681.2 698.4 (2) Resilient underlying performance Adjusted operating expenses (445.1) (433.5) 3 Reduced income driven by marginal decline in Banking Adjusted impai
Slide 13: Our Banking businesses
Our Banking businesses Banking Commercial Retail Property Change in income (2)% 0% (6)% (2)% Loan book (year-on-year) £9.5bn (-4%) £4.7bn (-2%) £2.9bn (-5%) £1.9bn (-5%) Net interest margin 7.2% (FY 24: 7.4%) 6.6% (FY 24: 6.7%) 8.3% (FY 24: 8.7%) 6.9% (FY 24: 7.3%) Change in adjusted operating expen
Slide 14: Loan book performance
Loan book performance Loan book movement by business1,2,3 (£ million) Loan book growth impacted by Commercial (2%) Retail (5%) Property (5%) moderation actions Loan book decreased 4% (98) (8) (23) (3%) (1%) (141) Excluding businesses in run-off, loan book declined 3% (1%) (103) to £9.4 billion (14%)
Slide 15: Strong net interest margin at 7.2%
Strong net interest margin at 7.2% Net interest margin Key drivers of underlying NIM • Strong focus on pricing discipline • Continued pressure on new business margins from elevated SME funding costs in a higher rate environment 7.5% 7.5% 7.4% 7.1% • Changes in lending mix Outlook In FY26, we expect
Slide 16: Maintaining cost savings momentum
Maintaining cost savings momentum Delivered £25 million of annualised cost savings since Total adjusted operating expenses March 20241 increased by 3% in FY25, primarily reflecting higher Group (central functions) Group adjusted operating expenses2 expenses. Adjusted Bank operating (£ million) expen
Slide 17: Resilient credit performance
Resilient credit performance Long-term average bad debt ratio2 Stable bad debt ratio at 1.0% £91.8 million of impairment charges, £5.5 million lower than FY24 driven by: • Impairment credit in relation to Novitas 2.6% 2.4% 2.2% • Favourable macroeconomic impacts 2.3% • Partly offset by an increase i
Slide 18: Strong balance sheet
Strong balance sheet Total funding Prudent approach £12.7 billion Equity 14% Conservative funding strategy Average maturity of funding Unsecured funding 9% allocated to loan book at 18 £12.7bn Secured funding 8% Consciously maintained a higher level of liquidity, with LCR months3 Total funding Retai
Slide 19: Strong capital position reflecting management actions
Strong capital position reflecting management actions 31 Jul 2025 31 Jul 2024 Strong capital position, despite impact from motor finance commissions provision CET1 capital ratio (transitional)1 13.8% 12.8% CET1 capital ratio (transitional) pro-forma after Winterflood c.14.3% n/a Lower RWAs – decline
Slide 20: Strategy update and conclusion
03 Strategy update and conclusion Mike Morgan, Group Chief Executive Close Brothers Group plc Preliminary Results 2025 20
Slide 21: A clear strategy to rebuild returns
A clear strategy to rebuild returns Simplify Optimise Grow Double digit Exit or restructure Cost reduction and a Drive sustainable RoTE by FY28, underperforming, low step-change in growth across our rising thereafter returning businesses profitability chosen markets Close Brothers Group plc Prelimin
Slide 22: Strategic priorities: Simplify
Strategic priorities: Simplify Portfolio review framework Simplification agenda largely complete, Continue as is and grow delivering a focused portfolio of specialist 1 • Businesses with strong strategic fit, banking businesses Business model profitability, returns and growth Is it aligned with our
Slide 23: Strategic priorities: Optimise
Strategic priorities: Optimise Delivered £25 million of Committed to delivering at least Identified c.£20 million of annualised savings by end of c.£20 million of additional annualised savings expected by FY251 annualised savings in each of end FY262 the next three years2 Headcount Headcount c.£16m
Slide 24: Strategic priorities: Grow (Commercial)
Strategic priorities: Grow (Commercial) Strong market positions and attractive growth opportunities in each of our chosen markets Commercial Market opportunity Building on strong market Growth priorities to 2028 positions • Asset Finance: c.8% share of c.£40 • UK’s largest independent provider of •1
Slide 25: Strategic priorities: Grow (Retail)
Strategic priorities: Grow (Retail) Strong market positions and attractive growth opportunities in each of our chosen markets Retail Market opportunity Building on strong market Growth priorities to 2028 positions • Motor: Consumer preference shifting • Motor: Long standing relationships with •1 Mot
Slide 26: Strategic priorities: Grow (Property)
Strategic priorities: Grow (Property) Strong market positions and attractive growth opportunities in each of our chosen markets Property Market opportunity Building on strong market Growth priorities to 2028 positions • Challenging Build-to-Sell environment • Strong customer loyalty with 70% of new
Slide 27: Returns outlook: a clear pathway to stronger returns
Returns outlook: a clear pathway to stronger returns Double-digit RoTE by FY28, rising thereafter Repositioned the Group return on average tangible equity1 business to focus on segments where we Evaluating see mid to high opportunities to At least c.£20 single digit growth optimise capital, million
Slide 28: Conclusion
Conclusion Our core business remains strong 1 Strong capital position, even after the 2 impact of motor commissions provision and legacy matters Reshaping the business to focus on core 3 lending expertise Clear strategy to rebuild returns over 4 the next three years: Simplify, Optimise, Grow Close B
Slide 29: Appendices
04 Appendices Close Brothers Group plc Preliminary Results 2025 29
Slide 30: Appendix 1: Summary of guidance
Appendix 1: Summary of guidance Guidance Loan book We have repositioned the business to focus on segments Group (central functions) where we see mid to high single digit growth potential through We expect the operating loss from the cycle, leaving us well positioned to benefit as the Group (central
Slide 31: Appendix 1: Summary of guidance (ctd.)
Appendix 1: Summary of guidance (ctd.) Guidance Costs • We are committed to delivering at least c.£20 million of additional annualised savings per annum in each of the next three years. As a result, we expect the group’s adjusted operating expenses to be within the £410- 430 million range by the 202
Slide 32: Appendix 2: Reconciliation from adjusted to statutory income statement
Appendix 2: Reconciliation from adjusted to statutory income statement Adjusting items reconciling adjusted to statutory performance Complaints handling and other Close Summary operational and Brewery income Provision in legal costs Provision in Amortisation Rentals Close Brothers statement for rela
Slide 33: Appendix 2: Reconciliation from adjusted to statutory income statement (ctd.)
Appendix 2: Reconciliation from adjusted to statutory income statement (ctd.) Adjusting items reconciling adjusted to statutory performance Complaints handling and other Close Summary operational and Brewery income Provision in legal costs Provision in Amortisation Rentals Close Brothers statement f
Slide 34: Appendix 3: Loan book reconciliation
Appendix 3: Loan book reconciliation1 Loan book performance including and excluding businesses in run-off 31 July 2025 31 July 2024 Change (£ million) (£ million) % Commercial 4,729.3 4,834.7 (2) Asset Finance 3,291.0 3,388.5 (3) Invoice and Speciality Finance2 1,438.3 1,446.2 (1) Retail 2,878.9 3,0
Slide 35: Appendix 4: Banking – Financial performance
Appendix 4: Banking – Financial performance 2025 2024 Change Adjusted operating income impacted by loan book £ million £ million % moderation measures and legacy book run-off Adjusted operating income 692.9 709.9 (2) Adjusted operating expenses (402.8) (399.7) 1 Adjusted impairment losses on financi
Slide 36: Appendix 5: Group (central functions) – Financial performance
Appendix 5: Group (central functions) – Financial performance 2025 2024 Change £ million £ million % Income decreased reflecting lower cash balances and lower interest rates Operating income/(expense) (11.7) (11.5) 2 Total operating expenses (42.3) (33.8) 25% Operating profit/(loss) from continuing
Slide 37: Appendix 6: A focused specialist bank
Appendix 6: A focused specialist bank Providing additional borrowing capacity for SMEs and consumers seeking expertise, relationships and service With a diverse funding base, including a strong Savings franchise Commercial Funding solutions to SMEs through direct sales force and third-party distribu
Slide 38: Appendix 7: Lending model
Appendix 7: Lending model A proven and resilient lending model Core products and security1 Average loan size2,3 Typical loan maturity2,3 Long track record of disciplined and consistent Asset • Commercial asset financing, hire lending through the cycle purchase and leasing solutions Finance & c.£50k
Slide 39: Appendix 8: Highly experienced leadership team
Appendix 8: Highly experienced leadership team Mike Morgan, Group Chief Executive Matt Roper, CEO Commercial Phil Hooper, CEO Property • Mike was appointed Chief Executive in January • Matt was appointed CEO of Commercial for Close • Phil joined the Property Finance division of Close 2025, after pre
Slide 40: Appendix 8: Highly experienced leadership team (ctd.)
Appendix 8: Highly experienced leadership team (ctd.) Robert Sack, Group Chief Risk Officer Sarah Peazer-Davies, General Nazrul Kazi, Counsel and Company Secretary Group Head of Internal Audit • Robert joined Close Brothers in April 2015 as Group • Sarah was appointed Group General Counsel and Compa
Slide 41: Appendix 9: Sustainability
Appendix 9: Sustainability Our responsibility remains fundamental to our purpose, strategy and culture E E S G Our car fleet Our green lending Our inclusivity Our Board is now £1 billion+ 91% 56% 61.6% has been financed by our energy of our colleagues feel included female directors on the Board and