Close Brothers Group PLC (OTC:CBGPY) Faces Financial Challenges Amid Adjusted Ratings and Price Targets

RBC Capital adjusts its rating for Close Brothers Group PLC (OTC:CBGPY) to "Sector Perform" and lowers the price target amid concerns over future profitability.
The company reports a pre-tax loss of £122 million for the year, with a notable decline in net interest margin (NIM) to below 7%.
Despite financial challenges, Close Brothers achieves an annual profit of £144.3 million, exceeding market expectations through effective cost-saving measures and selective lending.

Close Brothers Group PLC, trading as OTC:CBGPY, is a British financial services company. It offers a range of services, including lending, wealth management, and securities trading. The company faces competition from other UK banks and financial institutions. On October 3, 2025, RBC Capital adjusted its rating for CBGPY to "Sector Perform," maintaining a "hold" action, with the stock priced at $13.08.
RBC Capital also revised the price target for Close Brothers, lowering it from 525 GBp to 500 GBp. This adjustment comes amid concerns about the company's future profitability. Close Brothers recently warned that its net interest margin (NIM) is expected to fall below 7% in the coming year, down from 7.2% last year. This decline has contributed to a 5% drop in the share price.
The company's financial performance has been challenging. For the year ending in July, Close Brothers reported a pre-tax loss of £122 million, compared to a £133 million profit the previous year. The adjusted operating profit from continuing operations decreased by 14% to £144 million. These results were impacted by a £165 million provision for motor finance commission claims and other charges.
Despite these challenges, Close Brothers reported an annual profit of £144.3 million, surpassing market expectations. The company attributes this success to effective cost-saving measures and a strategy of selective lending. Chief Executive Mike Morgan stated that the group had taken "decisive action" to address these issues.
Currently, CBGPY is priced at $13.08, reflecting a change of $0.10, or 0.77%. The stock has seen a high of $15.03 and a low of $4.62 over the past year. The company's market capitalization is approximately $979.06 million. However, the trading volume is notably low, with only 2 shares exchanged on the OTC market.