Major banking group to axe 600 jobs in UK and Ireland as part of £85m cost-cutting efforts

Yesterday, shares in Close Brothers slipped by as much as 19 per cent after short seller Viceroy Research said the firm will have to at least double its £300million provision for Britain’s car finance scandal.

According to the Viceroy, the firm had "substantially misrepresented" its exposure to a scheme designed by the City watchdog to compensate motorists over the scandal.

In the firm's analysis, the ideal "blue sky" scenario for the banking group would be to pay out £572million. However, Viceroy’s most likely scenario is for a £999million hit, which would reach £1.23billion in the worst case situation for the firm.

Mike Morgan, the chief Executive, said: "Close Brothers has been part of the backbone of the UK business community for nearly 150 years. Last year alone, we lent £7billion into the economy, continuing to make a real difference to the businesses and consumers we serve.

"In the first half of the 2026 financial year, the group delivered a resilient trading performance reflecting cost discipline, solid credit performance, and a robust net interest margin. We have repositioned the business to focus on markets where we see strong and sustainable opportunities.

"As a result, and given current market conditions, the loan book has marginally reduced in the first half, while a number of our core businesses continued to grow. We are well-positioned for future growth as a specialist banking group.

"Our CET1 capital ratio remains strong at 14.3 per cent and we are confident that this leaves us well placed to absorb a range of potential outcomes from the FCA's proposed motor finance commission redress scheme.

"We remain focused on delivering our strategic priorities: simplify, optimise, and grow. With the simplification of our business largely complete, we are firmly in the optimisation stage, and have accelerated our cost savings plans.

"We now expect to deliver c.£25million of annualised savings in the current financial year and a total of c.£60million of annualised savings by the end of 2027 rather than 2028. This positions us well to reach double-digit returns by the 2028 financial year, rising thereafter."

AJ Bell's head of financial analysis Danni Hewson said: "London’s FTSE 250 struggled to stay in positive territory thanks to a double-digit slump in Close Brothers’ share price after a report from short-seller Viceroy suggested the lender would need to significantly up the amount of cash it had set aside to compensate mis-sold motorists.

"The Financial Conduct Authority (FCA) is expected to publish the final rules on a compensation scheme for motor finance customers later this month, which could see millions of motorists receiving payments in the coming year.

"The average payout is expected to come in around £700, but some could get a higher amount, and Viceroy has argued that Close Brothers would need to at least double the existing provision currently set aside to settle all its claims."