Close Brothers Group (CBG) H2 2024 earnings summary

Executive summary

• Delivered resilient FY 2024 performance with key metrics in line with guidance, including strong loan book growth and margins in Banking, and market-leading net inflows in Asset Management; Winterflood impacted by unfavorable market conditions.

• Adjusted operating profit rose 50% to £171m, driven by lower impairments and strong banking income.

• Announced sale of asset management division (CBAM) to Oaktree for up to £200m, simplifying the group and strengthening capital.

• Continued focus on cost discipline, core lending, and capital management actions to boost CET1 capital.

• Maintained strong customer service and positioned for future opportunities.

Financial highlights

• Adjusted operating profit up 50% to £171m; statutory operating profit up 27% to £142m; ROTE at 8.3%.

• Loan book grew 6% to £10bn; net interest margin at 7.4%; CET1 capital ratio at 12.8%.

• Asset Management net inflows 8%, AUM up to £19.3bn; Winterflood's WBS AuA up 21% to £15.6bn.

• Impairment charges fell to £99m from £204m (prior year included £117m Novitas charges).

• Adjusted EPS rose to 76.1p.

Outlook and guidance

• Planning for low single-digit loan book growth in FY 2025 to support capital build.

• NIM expected to be sustained at 7.2% in FY 2025.

• Annualized cost savings of £20m targeted by end of FY 2025; positive operating leverage expected in FY 2026.

• CET1 capital ratio targeted at 14–15% by end of FY 2025, above steady-state 12–13% to buffer FCA review uncertainty.

• Bad debt ratio expected to remain below long-term average of 1.2% in FY25; Asset Management net inflows targeted at 6-10%.