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Close Brothers Group PLC (LSE:CBG) has seen its shares rise significantly as interest rates have begun to fall and concerns over the FCA's motor finance investigation have diminished. Currently trading at 543p, the shares have climbed 80% from their February 2024 low.
The bank is also anticipated to benefit from the recently relaxed Basel 3 regulations announced by the Bank of England, which may be addressed in future updates.
The full-year results are scheduled for release on Thursday, 19 September. UBS has projected that underlying profits for the second half of the year will be £73 million, reflecting a 22% decline from the first half. Increased costs and impairment charges are expected to offset a projected 2% growth in income, with a flat performance in banking and gains in CBAM and Winterflood.
Due to ongoing uncertainties related to the FCA investigation, the dividend has been canceled. UBS forecasts a £50 million provision for motor-related issues, out of an anticipated £280 million total provision by the end of 2026.
According to UBS, the upcoming results are likely to highlight key areas such as loan pricing, fee structures, cost growth, asset quality, and the outlook for Banking NIM, as well as volumes and costs. Additionally, the focus will be on the sustainability of any improvements in Winterflood profits and the pace and scale of progress in CBAM’s asset management operating margins.
