Close Brothers Group PLC (LSE:CBG)<\/a>, the UK specialist lender, has been upgraded to ‘buy’ from ‘neutral’ by UBS, which argues the stock’s near-40% decline year-to-date has created a compelling entry point that materially undervalues the group’s recovery prospects.<\/p>\nUBS retained its 555p price target, implying more than 40% upside to the current 383p share price.<\/p>\n
And it said the market is embedding a higher risk of further motor finance redress provisions than the broker considers likely, while failing to adequately price in a forecast recovery in return on tangible equity (ROTE) to a sustainable 9%.<\/p>\n
The bank reported first-half adjusted pre-tax profit 18% ahead of consensus, with costs 2% better than expected and impairments 13% below forecasts at a bad debt ratio of 0.8%, partly reflecting an updated motor finance model, against a full-year average of 1.0% in the prior year.<\/p>\n
Close Brothers increased its restructuring spend guidance for the current financial year to \u00a310-15 million and added new guidance of \u00a330-40 million for the following year, with the combined programme expected to deliver annualised cost savings of around \u00a360 million by the end of FY27 and a headcount reduction of more than 20%.<\/p>\n
UBS said the stock is trading at 7.3 times FY27 earnings per share, a 30% discount to its 10-year average and below the sector multiple of 8.5 times, and at just 0.4 times tangible net asset value.<\/p>\n
At the level, the bank said it implies the market is pricing in either a ROTE of below 6% or a doubling of the existing \u00a3300 million motor provision.<\/p>\n
The FCA is due to publish its final approach to motor finance redress on 30 March.<\/p>\n","protected":false},"excerpt":{"rendered":"UBS upgrades Close Brothers to buy with 555p target as motor redress fears seen overdone Proactive uses images…\n","protected":false},"author":2,"featured_media":39153,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[129],"tags":[22758,22759,22761,22760,5255,223],"class_list":{"0":"post-39152","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ubs","8":"tag-close-brothers","9":"tag-motor-finance","10":"tag-recovery-prospects","11":"tag-redress","12":"tag-target","13":"tag-ubs"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116295511840842079","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/39152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=39152"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/39152\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/39153"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=39152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=39152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=39152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"UBS](\"https:\/\/www.europesays.com\/ch\/wp-content\/uploads\/2026\/03\/014753951fdfc925b2af54a18b219030.jpeg\")
UBS upgrades Close Brothers to buy with 555p target as motor redress fears seen overdone Proactive uses images sourced from Shutterstock <\/p>\n