Close Brothers raises cost-cutting target to exceed £60m by 2027 and flags further restructuring as motor finance losses continue to reshape the FTSE 250 lender
Close Brothers, the FTSE 250 specialist bank, reported on 29 September that it had delivered £36 million of cost savings in its most recent financial year, surpassing its original £25 million target. The bank has now raised its savings ambition to exceed £60 million by 2027, to be achieved through a combination of offshoring, restructuring and property footprint reductions. The group described its transformation programme as having 'gained real momentum' and confirmed it is 'well into planning for the next stage of restructuring activity'. Restructuring costs for the year reached £14.3 million, up sharply from £2.3 million in 2025, primarily driven by redundancy payments, and are expected to rise to between £30 million and £40 million in the coming year. In March, the bank confirmed it would cut approximately 600 full-time roles by the end of 2027, representing around 20% of its total workforce. The bank also pointed to artificial intelligence as an area of significant potential for further efficiency gains and product improvements. The earnings update sits against the backdrop of ongoing pressure from the motor finance mis-selling investigation, which has been central to driving the bank's operational overhaul.
Why this matters
Close Brothers' accelerating restructuring is a direct consequence of the motor finance mis-selling controversy that has reshaped its financial position and forced a fundamental review of its cost base. The decision to raise the savings target by more than 140% from the original figure signals that management believes the transformation programme has runway beyond its initial scope, but rising restructuring charges show the near-term cash cost remains significant. For the broader market, the bank's trajectory is a live case study in how a mid-tier listed lender navigates a conduct-driven financial shock while simultaneously managing investor expectations on the London market.
On the Ground
The restructuring generates significant employment law and regulatory work, covering redundancy process compliance, consultation obligations, and any required regulatory notifications to the FCA and PRA as the group resizes. Banking lawyers will be involved if any asset disposals, outsourcing arrangements, or offshoring structures require contractual documentation. Capital markets lawyers advising close shareholders or debt investors will need to track the earnings releases carefully for any disclosure implications. A trainee would assist with regulatory notification drafting, tracking completion of the redundancy consultation timetable, and preparing board minute summaries from each earnings update.
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