Close Brothers Group (CBG · LSE)
Lending Where the Big Banks Won't
Close Brothers is a UK specialist lender serving SMEs, property developers and consumers in markets often underserved by larger banks. After simplifying the group and strengthening its capital position, management is cutting costs, growing its core lending businesses and rebuilding returns.
Bull case for Close Brothers Group
Secured lending on assets it can repossess
Almost all lending is backed by identifiable assets, keeping loan losses low and predictable.
Cost programme brought forward a year
Management has pulled its £60m savings target forward to 2027 and accelerated headcount cuts.
Leading share of asset and invoice finance
It is the largest non-clearing-bank provider in markets high street lenders are leaving.
Bear case for Close Brothers Group
Motor commission redress is still uncapped
The regulator's compensation scheme faces legal challenges, so the final bill remains uncertain.
Property lending is the most cyclical division
Housebuilding delays and build cost inflation have already pushed up bad debts on developments.
Rebuilding returns depends on execution
Cutting a quarter of headcount while growing lending is a demanding balancing act.