The London-listed UK bank, beset by the country's motor finance misselling affair, issued a trading statement update on its progress.

Close Brothers, the bank that along with other firms has been hit by the UK’s motor finance misselling scandal, said yesterday that it expected its group operating loss for the 2025 financial year to come below its earlier guidance of between £45 and £50 million ($60-$67 million). 

The annualised year-to-date net interest margin was 7.0 per cent (H1 2026: 7.1 per cent); the bank said it continues to expect the net interest margin to be slightly lower than 7 per cent for the 2026 financial year, reflecting loan book mix impacts. The trading statement covered the period from 1 February to 30 April.

“We are making good progress on our initiatives to deliver cost reduction and optimise operational processes, including the simplification of business and management structures, and further outsourcing and offshoring. We now expect to exceed our target of [around] £25 million of annualised savings by the end of the 2026 financial year, as a result of accelerating cost actions into the current year. We also expect the group's adjusted operating expenses to be below our previous guidance of circa £450 million for the 2026 financial year,” it said. 

“We are progressing well with the delivery of our strategic objectives and targets. Our capital position remains strong after absorbing the additional provision for motor finance commissions, enabling investment in future growth to further support the UK economy,” Mike Morgan (main picture), CEO, said. 

Close Brothers said its Common Equity Tier 1 capital ratio and total capital ratio stood at 14.3 per cent and 19.5 per cent respectively at 30 April 2026. The CET1 capital ratio reflects the additional £30 million provision in relation to motor finance commissions, offset by other profits attributable to shareholders in the quarter. 

In early April, Close Brothers said it could “comfortably” absorb the cost of the UK financial regulator’s motor finance redress programme announced late in March. 

Shares in the firm were down about 2.6 per cent yesterday; since the start of January, they have weakened by 14.8 per cent.