Close Brothers Group has posted an operating loss before tax of £103 million for its half year results.
Mike Morgan, Close Brothers chief executive, said the performance is one of strength and resilience of the firm’s business model despite putting aside a provision of £165 million to ready the business for a potential redress scheme for customers if one is introduced by the Financial Conduct Authority (FCA).
The FCA is still reviewing motor finance commission arrangements and a Supreme Court appeal process is pending at the start of April.
As a result of this uncertainty, Close Brothers is not paying interim dividends for the first half of its 2025 financial year.
Morgan said: “My priorities include focusing on greater simplification, improving operational efficiency and driving sustainable growth.
“Our goal is to ensure that, once the motor finance commissions uncertainty has been resolved, the group is well positioned to generate strong, sustainable returns.
“Alongside a stronger capital position, delivering on these priorities will create a more efficient and resilient business, one that delivers greater value for shareholders and continues to support customers, as we have through many cycles.”
The wider industry is still waiting for the FCA to publish the results from its review into the past use of motor finance discretionary commission arrangements (DCAs).
The results of the review were expected to be published in May, but it has now confirmed it will publish its results and next steps within six weeks of the Supreme Court’s decision.
Since the FCA launched its review, a ruling by the Court of Appeal has raised the possibility of widespread liability among motor finance firms wherever commissions were not properly disclosed to customers.
The Supreme Court will hear an appeal against the Court of Appeal’s judgment on April 1-3.
