Banking group Close Brothers has confirmed plans to axe around 600 jobs across its UK and Ireland operations in a major blow for the British economy.
The financial services firm has announced the job cuts will take place over the next 18 months as it looks to reduce annual costs by about £85million.
Yesterday, shares in Close Brothers slipped by as much as 19 per cent after short seller Viceroy Research said the firm will have to at least double its £300million provision for Britain’s car finance scandal.
According to the Viceroy, the firm had “substantially misrepresented” its exposure to a scheme designed by the City watchdog to compensate motorists over the scandal.
A major banking group is axing jobs
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In the firm’s analysis, the ideal “blue sky” scenario for the banking group would to pay out £572million. However, Viceroy’s base case is for a £999million hit, and in a ‘bear scenario’, this would reach £1.23billion.
Mike Morgan, the chief Executive, said: “Close Brothers has been part of the backbone of the UK business community for nearly 150 years. Last year alone, we lent £7billion into the economy, continuing to make a real difference to the businesses and consumers we serve.
“In the first half of the 2026 financial year, the group delivered a resilient trading performance reflecting cost discipline, solid credit performance, and a robust net interest margin. We have repositioned the business to focus on markets where we see strong and sustainable opportunities.
“As a result, and given current market conditions, the loan book has marginally reduced in the first half, while a number of our core businesses continued to grow. We are well-positioned for future growth as a specialist banking group.
High street banks have taken a hit in recent months
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GETTY“Our CET1 capital ratio remains strong at 14.3 per cent and we are confident that this leaves us well placed to absorb a range of potential outcomes from the FCA’s proposed motor finance commission redress scheme.
“We remain focused on delivering our strategic priorities: simplify, optimise, and grow. With the simplification of our business largely complete, we are firmly in the optimisation stage, and have accelerated our cost savings plans.
“We now expect to deliver c.£25million of annualised savings in the current financial year and a total of c.£60million of annualised savings by the end of 2027 rather than 2028. This positions us well to reach double-digit returns by the 2028 financial year, rising thereafter.”
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