Close Brothers has swung to a £122.4m pre-tax operating loss in its latest annual results, from a £132.7m profit last year.

The figure equates to a 192% decline for the 12 months to 31 July.

Close Brothers’ figures were heavily impacted by a £165m provision for historic motor finance commission claims, as well as £33m put aside for potential customer redress. Figures were also dampened by a £30m hit from exiting its loss-making vehicle hire business.

The group did state it had simplified the structure of the company over the last year, including the sales of Close Brothers Asset Management, and Winterflood, while it had repositioned its premium finance business to focus on commercial lines.

In relation to the group’s motor finance provision, it is still awaiting a verdict from the Financial Conduct Authority (FCA), as the regulator continues to consult on a compensation scheme.

This is after a ruling by the Supreme Court in August, which stated that while some motor finance customers won’t get compensation because in many cases the commission payments were legal, the Court decided that in some circumstances, the failure to properly disclose commission arrangements could be unfair, and therefore unlawful.

“We welcomed the positive outcome of the Supreme Court judgment in August, which provided much-needed clarity to the industry, and now await the outcome of the FCA consultation on the design and scope of an industry-wide redress scheme,” Close Brothers chief executive, Mike Morgan, said.

Close Brothers also reported that it had made £25m worth of annualised cost savings across the 2025 financial year, and that it was targeting at least £20m additional annualised savings per annum in each of the next three years.

“Over the last year, we have taken decisive action to address legacy issues and reposition the business for growth,” added Morgan.

“Whilst some of these actions have an upfront financial impact on the group, they provide the foundation for the next stage of our journey: driving efficiency and capturing growth.

“As we emerge as a simpler, more focused bank, we see significant growth opportunities across our chosen markets. We will use our strong market positions, reputation and specialist expertise to win in the segments where we can truly differentiate and become the specialist lender of choice for SMEs in the UK and Ireland.”

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