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.

• Announced sale of asset management division (CBAM) to Oaktree, simplifying the group and focusing on core lending.

• Proactive capital management actions underway, targeting up to GBP 400 million CET1 capital increase by end of FY 2025.

• Focused on cost discipline and significant progress on capital actions.

• Continued to support customers and maintain strong service, positioning for future opportunities.

Financial highlights

• Adjusted operating profit up 50% to GBP 171 million; statutory operating profit up 27% to GBP 142 million; return on tangible equity at 8.3%.

• Loan book grew 6% to GBP 10 billion; net interest margin strong at 7.4%; CET1 capital ratio at 12.8%.

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

• Adjusted EPS rose to 76.1p.

• Impairment charges down to GBP 99 million from GBP 204 million prior year.

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%.

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

• CET1 capital ratio could reach 14-15% by end of FY 2025, subject to management actions.

• Bad debt ratio expected to remain below long-term average of 1.2% in FY 2025.

• Dividend reinstatement considered only after clarity on FCA review, likely late FY 2025 or FY 2026.