Close Brothers Share Discussion Threads

[blackhorse23] 12/11/2024 15:29

I would say likely drop below 100p by Xmas , I told last month it will drop below 200p and here it now

[jonnybig] 12/11/2024 10:18

If 200p breaks it's bloodbath time.

spud

[blackhorse23] 11/11/2024 08:12

Brokers rating down today

[stoopid] 10/11/2024 23:59

CBG are back underwriting new Car Finance loans. Are these the actions of a bank that's going bust? I think not. I'm not saying there aren't problems ahead, and the share price won't languish, possibly for quite a while until this is resolved depending on losses/quantum. And yes, there may even be a rights issue, although I hope not and don't believe one will be needed.https://cardealermagazine.co.uk/publish/close-brothers-starts-underwriting-new-finance-business-again-as-industry-recovers-chaos/309698

[robizm] 10/11/2024 22:22

The costs are quite easy to calculate and if they settle at complaints stage that avoids going to ombudsman and saves money. The ombudsman decimated the payday and door step loan companies with thousands of claims but long term customers got all the interest paid refunded plus 8% interest. These are just the commission and they are not for every loan made.

[blueclyde] 10/11/2024 13:38

What was apparent in the last results was not necessarily the exposure but also the sheer cost of processing any potential claims. Looks like the floodgates have been opened and that alone, the cost of investigation ect could sink this never mind any payouts.

[jonnybig] 10/11/2024 09:52

It is unlikely Aberdeen directly hold cbg as it will account for too big a slice of their own market cap, so it most likely is indirect, holding on behalf of clients (AUM- assets under management).

spud

[berny3] 10/11/2024 08:43

Another area I was thinking about last night is the legal and financial situation. Firstly the county courts will be very busy with an influx of these case due to promotion however it is not clear yet whether the courts are using the judgement from the appeal case. It would be super messy if they did and it was overturned by supreme court. But more interesting how can you prosecute, via Mens rea as their needs to be criminal intent and acts reus there needs to be a criminal act. If the firm was following the law and what was defined by the FCA at the time. You can't retrospectively change the approach to the law to and then claim criminal intent based on new facts. I think it is a very interesting case and will highly likely play out for years to come.

Reading the law it I far wider than finance. It draws into the mix any commissions paid for any work undertaken. Every service that has been provided where a broker has been used and they have taken a commission falls under this, look at insurance, estate agents, letting agents, auctioneers, money exchange etc. It creates a senecio where the consumer has no risk and generates a high degree of moral hazard in the consumer. the consumer has to be grouped into sophisticated and non sophisticated but that alone generates it's own issue. When buying a £5,000 car who is sophisticated and who is non sophisticated. The courts are going to be jammed for sometime and a solution has to be found, hence in my opinion why the COA is pushing hard for no one to challenge. The knock on ramifications are huge and it has to be challenged and at the least clarified. People should not be ripping people off full stop not good etiquette. there needs to be a level of responsibility also from the sales side too. good luck all

[berny3] 10/11/2024 08:27

My view is watch the institutional holders. Aberdeen hold 10% of the company that is quite a bath they are taking. I note in another o their UK funds they hold AstraZeneca as third largest holding that would have also taken a bath (not as bad as Close though). There is likely pressure being placed upon the share price with a high-level of shorting forcing the hands of fund managers going into Christmas/end of year performance. It will be tough on those long holders desks!! Therefore ignoring the very loud noise the share price is likely to be being overly depressed by market activity. Therefore it is a speculative punt based on the assumption the sell pressure will be released at some stage. The bounce back will be swift and large if that is the case. Therefore if you feel there is value here in excess of market cap then it is a buy.

[blackhorse23] 09/11/2024 21:40

Likely drop below 100p , they went high court which cost more money and take time to solve problems, meantime share price will keep falling. Compensation amount £650 million to 1 billion . They should set aside money right now and move forward

[kktoonot] 09/11/2024 19:37

Might not be long or never. You have no idea either way and certainly no clue on financials.
What about the other bn plus on the books or is that inconvenient for that short position ?

[stoopid] 09/11/2024 15:11

Good post and agree. The stock isn't currently even worth the £400m in cash CBG will have on their books.Might catch that falling knife if it falls.under 200. Might not be long to wait.

[pj84] 08/11/2024 22:51

Well if you are looking for a more positive post.

I will start by saying the share price is likely to remain depressed until there is anymore clarity on the eventual outcome from the Hopcroft case.

Having said that the latest adjusted eps was 76p share and that would normally support an undemanding of market cap of about £8 (a PE of just over 10) which is roughly where the share price was before the main slide started with the motor finance review. Not too long before that it was even higher at around £10/share.

The market cap with a share price of £8 was around £1.2 bn and it has dropped £900m since then to a current market cap of just over £300m.

RBC's previous worst case scenario (not their base case scenario) was £420m and if the Hopcroft judgement widens the exposure their new worst case scenario is £640m.



So arguably a drop of £900m already in the market cap more than reflects that worst case scenario.

CBG has suspended the dividend to bolster it's capital and at the moment it is fairly certain that will continue next year and until this whole situation is both clarified and dealt with.

Whatever the outcome it is unlikely it will all be dealt with in a single one off write off and is likely to remain uncertain for some time which should allow CBG more time to continue to bolster its capital position.

If, however, there is a clear need to write of £640m next year and that a draws a line under the issue then CBG might need to raise capital but once it is dealt with what would the new share price be once the adjusted eps is again around 76p without any further write offs?

The above is based on the current worse case scenario but whilst it looks unlikely what would the situation look like if any of the appeals are successful.

As I say the share price is likely to remain depressed for the time being but I don't subscribe to the view that this is curtains for CBG.

[chriss911911] 08/11/2024 16:33

Hmm, well at least it's consistent I suppose, I thought a more positive post was overdue, this is ark ward, tumbleweed moment, erh, okay, it has stopped falling now and will not fall for at last 2 days , that's it from me on the positive post thing.

[ricardo montalban] 08/11/2024 15:46

These are going down the pan, will be zero equity value left, just capital raising and paying bond holders. Dump it.

[berny3] 08/11/2024 10:59

We have two weeks until quarterly update, that hopefully will give some substance. I understood if the company thought there was a material change to its estimated figures it needed to alert the market. I must be missing something as the company looks to be priced to fail and it does not look like it will.

[stoopid] 08/11/2024 10:01

Yeah, gotta say a 680m hit wouldn't be good. That might well require a large capital raising/rights issue to cover so that the required regulatory Teir One capital requirements are not breached. Probably no dividend for years.This would be to cover the costs, fines and associated quantum for any FCA judgement. CBG are already in the process of securitising their car finance loan book to provide extra capital on top of the 400m already set aside to cover any judgement. This will reduce profitability but provide more liquidity and available cash to cover any judgement.I still don't think CBG will go under and no one, press or analysts, have suggested it but with the associated risks, hit to profitability and lack of dividend for the foreseeable future no one will want to invest and share price will go nowhere.

[j2m] 08/11/2024 09:24

Wall to wall (2 full pages in the Mail) coverage in newspapers and online on Wed on how to claim and possibility of it spreading to other sectors! Glad I took the hit and got out! It's a stitch up but what can you do!

[tomboyb] 08/11/2024 07:15

If city AM are close to correct then CBG are in serious trouble -

It all hinges on the court of appeal -

However that estimate is "up to" -

[blackhorse23] 07/11/2024 23:44

https://www.marketscreener.com/quote/stock/CLOSE-BROTHERS-GROUP-PLC-9590157/news/Close-Brothers-warned-of-640m-hit-if-car-loan-scandal-spreads-48268077/

[tomboyb] 07/11/2024 14:32

21st nov trading statement -

[tomboyb] 07/11/2024 14:26

Unfortunately only 67 shares -