(Reuters) -British lender Close Brothers beat annual profit estimates on Tuesday, as cost-saving measures and selective lending helped offset pressure from the motor finance commission probe.
The Supreme Court’s August decision was favourable for Close Brothers and other lenders, easing concerns over potential liabilities from historic motor finance commission arrangements.
The company had set aside up to 165 million pounds ($221.9 million) in provisions to cover potential operational and legal costs, and said on Tuesday it expects handling costs in relation to motor finance commissions to be single digit millions of pounds in fiscal 2026.
The company is reshaping the group by shedding non-core or underperforming businesses, with the exit from its Vehicle Hire arm as the next step in that process.
“As we emerge as a simpler, more focused bank, we see significant growth opportunities across our chosen markets,” CEO Mike Morgan said in a statement.
Close Brothers posted an annualised cost savings of 25 million pounds at the end of fiscal 2025 and is set to deliver at least about 20 million pounds a year over the next three years.
The company reported an adjusted operating profit from continuing operations of 144.3 million pounds for the year ended July 31, compared with analysts’ estimates of 125 million pounds, according to a company-compiled consensus.
($1 = 0.7437 pounds)
(Reporting by DhanushVignesh Babu in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
