Full Year 2024 Close Brothers Group PLC Earnings Call Transcript
Key Points
- Close Brothers Group PLC (CBGPY) delivered a resilient performance in an uncertain environment, with key metrics in line with guidance for the full year 2024.
- The banking division achieved growth in income, maintained focus on costs and pricing discipline, and grew the loan book by 6%.
- The sale of the asset management division, CBAM, is expected to strengthen the group's capital position and simplify the business, allowing a focus on core lending.
- Customer demand remained strong, with healthy levels of new business written and the acquisition of Close Brothers Motor Finance in Ireland.
- The company maintained strong capital, funding, and liquidity positions, with a CET1 capital ratio of 12.8% as of July 31, 2024.
- Winterflood's performance was negatively impacted by unfavorable market conditions, resulting in an operating loss of GBP2 million.
- The FCA's review of historical motor finance commissions introduced significant uncertainty for the industry and the group.
- Expenses rose by 10% due to increased staff costs and continued investments in banking, with banking costs increasing in line with guidance.
- Impairment charges of GBP99 million were incurred, although down from the previous year's GBP204 million.
- The decision not to pay a dividend in FY24 was made to retain around GBP100 million of CET1 capital, impacting shareholder returns.
Good morning, and welcome to the presentation of Close Brothers 2024 full year results. Unfortunately, Adrian can't be here with us today. As announced earlier this week, he is taking a temporary medical leave of absence from the business. So I will be taking you through the presentation this morning.
I'll start with an overview of the year before taking you through our financials. After that, I'll cover the progress we've made to date on the capital management actions and our strategy update. (Event Instructions)
Our business delivered a resilient performance in an uncertain environment with the key metrics in line with guidance we had given you for the full year 2024. In banking, we continue to deliver growth at strong margins, albeit at a reduced pace due to the measures taken to moderate capital consumption. CBAM delivered market-leading net inflows, although Winterflood's performance remained impacted by the unfavorable market conditions. We remain focused on cost discipline and have made further
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