Close Brothers Group PLC (LSE:CBG) shares fell 1.5% to 452.9p despite the lender saying it expects cost savings and operating expenses to improve beyond previous guidance as restructuring measures accelerate.
The merchant banking group said it now expects to exceed its target of about £25 million of annualised savings by the end of the 2026 financial year after bringing forward cost reduction measures, including outsourcing, offshoring and management simplification.
Adjusted operating expenses are now expected to come in below the previous guidance of around £450 million for the year.
Close Brothers reiterated full-year guidance and reported resilient lending performance during the third quarter.
The loan book increased 1% to £9.3 billion in the three months to the end of April, supported by growth in motor finance and invoice finance lending, partially offset by weaker conditions in property lending and a planned reduction in personal lines premium finance.
Net interest margin eased to 7.0% from 7.1% in the first half, with the group continuing to expect the full-year figure to be slightly below 7%.
Bad debts remained stable at 0.8%, below the group’s long-term average of 1.2%. The lender also maintained a strong capital position, with its Common Equity Tier 1 ratio unchanged at 14.3% at the end of April.
Chief executive Mike Morgan called it a “solid performance” during an “important transitional year”.