Close Brothers: How the motor finance scandal reshaped one of ‘Europe’s least cost-efficient lenders’

cityam

Jan 18

Close Brothers could be more ambitious with its cost overhaul, analysts say. Nearly two years ago Close Brothers chief executive said the bank would take “decisive actions” to strengthen its financial...

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Nearly two years ago Close Brothers chief executive said the bank would take “decisive actions” to strengthen its financial...</p>\n\n<a href=\"https://www.cityam.com/close-brothers-how-the-motor-finance-scandal-reshaped-one-of-europes-least-cost-efficient-lenders/\">Source Link</a>\n\n</div>\n","source":"cityam_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Close Brothers: How the motor finance scandal reshaped one of ‘Europe’s least cost-efficient lenders’</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nClose Brothers: How the motor finance scandal reshaped one of ‘Europe’s least cost-efficient lenders’\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-01-18 09:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.cityam.com/close-brothers-how-the-motor-finance-scandal-reshaped-one-of-europes-least-cost-efficient-lenders/><strong>cityam</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Close Brothers could be more ambitious with its cost overhaul, analysts say. Nearly two years ago Close Brothers chief executive said the bank would take “decisive actions” to strengthen its financial...</p>\n\n<a href=\"https://www.cityam.com/close-brothers-how-the-motor-finance-scandal-reshaped-one-of-europes-least-cost-efficient-lenders/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"FCA","symbol_name":"First Trust China AlphaDEX Fund","start_time":0,"source_url":"https://www.cityam.com/close-brothers-how-the-motor-finance-scandal-reshaped-one-of-europes-least-cost-efficient-lenders/","article_id":"2604921619","we_media_id":null,"thumbnails":["https://www.cityam.com/wp-content/uploads/2025/08/closebrothers-1.jpeg?w=824&h=463&crop=1"],"rights":{"source":"cityam_highlight","url":"https://www.cityam.com/close-brothers-how-the-motor-finance-scandal-reshaped-one-of-europes-least-cost-efficient-lenders/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2604921619","pubTimestamp":1768698000,"columns":[],"sourceInfo":{"source_id":"cityam_highlight","name":"cityam"},"weMediaInfo":null,"summary":"Close Brothers could be more ambitious with its cost overhaul, analysts say. Nearly two years ago Close Brothers chief executive said the bank would take “decisive actions” to strengthen its financial standing.The bold overhaul of the lender’s capital structure came amid the Financial Conduct Authority’s  review into the motor finance industry – a sector which made up 20 per cent of its 9.5bn loan book in 2025.“The board recognises the paramount importance of preparing the group for a range of outcomes from this review,” said Close Brothers’ chief Adrian Sainsbury – who would go on to exit in January 2025 for health reasons before being replaced by finance director Mike Morgan.Sainsbury added the bank would take a “number of decisive actions to strengthen [its] capital position materially,” ahead of dropping dividend payments for the 2024 financial year.","collect":0,"end_time":0,"defaultTopTitle":"cityam.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"FCA":"First Trust China AlphaDEX Fund"},"translate_title":"亲密兄弟：汽车金融丑闻如何重塑“欧洲最具成本效益的贷款机构”之一","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FCA":1},"content_text":"Close Brothers could be more ambitious with its cost overhaul, analysts say. Nearly two years ago Close Brothers chief executive said the bank would take “decisive actions” to strengthen its financial standing. The bold overhaul of the lender’s capital structure came amid the Financial Conduct Authority’s (FCA) review into the motor finance industry – a sector which made up 20 per cent of its £9.5bn loan book in 2025.“The board recognises the paramount importance of preparing the group for a range of outcomes from this review,” said Close Brothers’ chief Adrian Sainsbury – who would go on to exit in January 2025 for health reasons before being replaced by finance director Mike Morgan.Sainsbury added the bank would take a “number of decisive actions to strengthen [its] capital position materially,” ahead of dropping dividend payments for the 2024 financial year. \n\nOver the last 20 months, the bank has taken the chop to operations in a bid to strip back costs with a target of adding £400m to its CET1 ratio, a crucial measure of a bank’s financial strength. \n\n\n\n\n\n\nNews Updates\nStay ahead with our three daily briefings delivering all the key market moves, top business and political stories, and incisive analysis straight to your inbox.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nThis included scaling back lending in its premium finance division, dropping its brewery arm and offloading its asset management firm. At the bank’s earnings update for the 2025 financial year, Close Brothers pledged to go further. After nailing £25m in annual cost savings the bank said it would deliver another £20m for the next three years. Yet for all the bank’s belt-tightening, the market remains skeptical. \n\nClose Brothers is the ‘laggard’ of mid-cap banks“Close Brothers has a cost problem, and the £20m of cost savings identified at full-year results fell short, in our view,” say RBC analysts Benjamin Toms and Pablo de la Torres Cuevas.The analysts said the bank could wipe out around seven per cent of its total costs over the next 12 months amounting to near £32m in savings.This includes tearing down Close Brothers’ management structure of 25 separate business units with unique management layers, in a move that could save £5m. Toms and Cuevas said a five per cent reduction in headcount – which could generate £9m in savings – would also help address the bank’s “very low” loans-per-employee ratio compared to peers.Should it adopt this more aggressive path, the analysts believe the bank could drive its cost-to-income ratio – a key profitability metric – down to 56 per cent, below the current target of 59 per cent.\n\nThis would also come with a leaner cost base of £402m.Among a crowded field of challenger and mid-sized banks, Close Brothers is under pressure to tighten its cost base. “Compared to other UK small and mid-cap lenders, Close Brothers’ efficiency materially lags that of OSB and Paragon (best-in class) and Metro’s,” analysts said, adding that the bank “stands out as one of Europe’s least cost-efficient lenders.”","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}