LONDON, July 5, 2026, 16:02 BST
- Close Brothers Group plc (LON:CBG) jumped 7.9% Friday, much better than the FTSE 250’s 0.52% rise.
- The move in one day put on about £48 million of market cap, which is only around 15% of the company’s £320 million set aside for motor finance.
- The shares still closed the week off 1.1% and are trading under both their 50-day and 200-day moving averages.
- The FCA suspension puts redress work on hold, but the liability risk is still there.
Close Brothers Group plc (LON:CBG) opened the week in better shape after Thursday’s noise, but the jump looks more tied to relief on timing than real balance-sheet changes. Shares last changed hands on Friday, up 7.9% at 439.8p, compared to a 0.52% gain for the FTSE 250. Markets in London were closed over the weekend.
The move came after the UK Financial Conduct Authority paused parts of its motor finance redress scheme due to ongoing legal challenges. Shore Capital also upgraded Close Brothers to “buy” from “hold” and bumped its price target up to 495p from 490p. FCA
The more telling detail is the scale of the move. With the LSE/FTSE Russell share count at 150.5 million and a 32.2p gain on Friday, that’s an added £48 million in equity value. That’s just 15% of Close Brothers’ £320 million set aside for motor finance commissions. The provision itself stands at about 48% of the total £662 million market cap.
| Measure | Figure | Investor read-through |
|---|---|---|
| Market value | £662 mln | LSE/FTSE Russell July 3 figure |
| Motor finance provision | £320 mln | That’s about 48% of the market value |
| Friday equity value gain | About £48 mln | Near 15% of the provision size |
| Provision vs Friday gain | 6.6 times | The overhang is still big after the rally |
The FCA order pushes back when firms have to pay cash, but doesn’t solve the accounting issue. According to the regulator, companies can wait to figure out and pay redress until the Upper Tribunal process wraps up. But the rest of the rules stay in force. The tribunal hearing is set for Dec. 14-18, 2026, or Feb. 16-26, 2027. If the redress scheme survives and there’s no appeal, payouts are set for 2027. If the scheme is thrown out and reshaped, those payments could be delayed to 2028 or later.
Daniel Gore, partner at Withers, told Reuters the legal fight over the case would probably be “a ferocious fight for every compensation percentage point.” He said both lenders and consumers would be left “waiting with bated breath” for how the tribunal rules on the scheme’s scope. Reuters
Close Brothers is trading in a mixed technical spot. The LSE/FTSE Russell tear sheet from July 3 showed shares at £4.40, 1.8% under the 50-day moving average and off 3.9% from the 200-day level. Shares dropped 1.1% last week and are off 15.8% since the start of the year, even after Friday’s bounce.
| Price performance | Close Brothers | Difference vs FTSE 350 |
|---|---|---|
| 1 day | up 7.90% | 7.63 pts higher |
| 1 week | down 1.12% | 2.75 pts lower |
| 4 weeks | off 2.96% | 5.86 pts below |
| Year to date | fell 15.83% | 23.04 pts under |
| 52 weeks | up 12.77% | 6.84 pts behind |
Shore Capital’s Gary Greenwood said sentiment is still hit by uncertainty in motor finance, but AJ Bell’s market report notes investors are now “adequately compensated for the risks.” The broker keeps a 495p target, about 13% above Friday’s 439.8p close. AJ Bell
Close Brothers reported in May that its loan book grew 1% in the third quarter to £9.3 billion. The annualised net interest margin so far this year was 7.0%. “Our capital position remains strong,” Chief Executive Mike Morgan said after the company booked an extra provision. CET1 ratio was 14.3% at April 30, with total capital ratio at 19.5%.
Close Brothers doesn’t have any trading update set for this week, according to its calendar, with only prelims due in September. Monday’s new car sales data out of the UK could give a steer on motor finance demand. The next regulatory events for the company are the tribunal periods due in December or February.
