- Close Brothers Group
- 16 January 2026 09:29:07
Source: Sharecast
"We think the bank has more fat that it can trim on costs, which is not reflected in consensus," RBC said.
"It's tight, but we think that CBG's CET1 ratio can absorb a full top-up for motor finance, incremental restructuring and mid-to-high single digit loan growth."
RBC noted that Close Brothers’ current provision for motor finance is £300m. The FCA published its consultation paper in October 2025, with the final scheme due to be announced in Feb/Mar 2026.
RBC said that based on the number of submissions that the FCA has received, it thinks this timeline could be extended.
"With so many different parties (on both sides of the fence), it is difficult to see how someone will not take this to judicial review," RBC said. "This will lead to a pausing of compensation payments and a potential multi-year delay. In the event of judicial review, we would encourage CBG to provision in full, so that the issue only forms part of a potential upside thesis."
RBC said it’s about 5% below consensus on costs in FY28E, leading it to be circa 7% above consensus on pre-tax profit expectations.
At 0925 GMT, the shares were up 3.6% at 527.80p.