Close Brothers Share Discussion Threads

[albert arthur] 10/2/2024 10:59

7 day and Intraday for Friday.. CBG 464.52 457.04 451.00 444.96 436.36 431.24 411.47 404.20 393.76 379.32 353.00 342.56 291.36 259.72INTRADAY 470.75 467.13 464.20 461.27 457.11 454.63 445.05 441.53 436.47 429.48 416.73 411.67 386.87 371.55

[sandeep67] 09/2/2024 23:20

How's the Fibs look Arthur for next week?

[pj84] 09/2/2024 23:09

From the This is money article referred to earlier



"RBC Capital Markets suggests anywhere between £6billion and £16billion, having recently upgraded its estimates following a recent FCA webinar on historical motor commission arrangements.

The investment bank thinks Lloyds Banking Group, Black Horse's parent company and the UK's biggest motor finance lender, could pay out around £2billion alone in compensation.

Large sums: RBC Capital Markets suggests motor finance lenders could end up paying Britons anywhere between £6billion and £16billion

It also anticipates Santander UK will have to cough up £850million, while Barclays and Close Brothers will pay up to £120million and £150million, respectively."

If these figures turn out to be broadly correct then after Novatis a further hit of £150m would clearly be very unwelcome but from the final results for the year ended July 23 there was a £204.1M charge for impairment losses on financial assets and for the previous year ended July 22 there was a charge of £103.3m. After the charge last year there was still a pre tax profit of £112m and an after tax profit of £81m and whilst a further charge of that magnitude this year would be very unwelcome, it would only appear to delay the return to a more normal profit by a further year (if it is provided for the in the upcoming results, if they don't think they are liable they might not want to make a provision and it may overhang the share price for longer).

It still seems that all the bad new and some is already in the share price unless the situation is far worse than RBC are forecasting.

[pj84] 09/2/2024 22:37

I have always regarded the recent trend in car finance as akin to long term renting of a car even though people think they have bought it.

There is clearly something morally wrong with brokers being able to increase the interest rate charged to increase their commission earned. But that is not the same as being illegal.

Loan sharks are illegal, but extortionate interest rates charged by regulated lenders to people with poor credit histories aren't illegal.

I admit I don't know enough about the legal position but from what I have read no one has any clarity on that yet but it does appear until the FCA changed it's guidance the brokers were in compliance with the FCA guidance which would suggest it was legal unless there was some disclosure part of the guidance the brokers haven't complied with.

So from my limited understanding it appears that either before the change of FCA guidance there was some element of non-disclosre contrary to the guidance or following the change of guidance some brokers carried on regardless.

The other possibility is that it was always illegal and the FCA guidance before it was changed was fundamentally wrong. Where that leaves the lenders and brokers who relied on that guidance is an interesting point, particularly as the FCA are now launching the investigation!

[dplewis1] 09/2/2024 16:53

Big uncross .. maybe ABRDN reducing. Nasty

[jonnybig] 09/2/2024 12:49

Would be the biggest laugh out loud ever if Martin Lewis (or should that be his "team") has got this wrong.

I avoid his moronic programme followed by his moronic audience but had a peak re the motor finance issue. I had to laugh when he had a stupid viewer concerned that her monthly payments would increase by £500 on a £7,000 loan once it switched from a fixed. Martin smugly said it would only be £20 and everyone started applauding as though he was some kind of financial wizard. I laughed my head off!

[dplewis1] 09/2/2024 12:48

hTTps://www.thisismoney.co.uk/money/markets/article-12922759/Will-FCAs-motor-finance-probe-lead-PPI-style-payouts.html

[flyfisher] 09/2/2024 12:36

An article in this is money comments on some lenders having a broker indemnity agreement. Can't post as I am using my phone.

[stoopid] 09/2/2024 11:20

Well, i reckon a bit of due diligence and number crunching going on sonits unlikely CBG will put out anything until they are sure of their figures.They have already had to write down £180m approx for the novitas debacle over the last two years so I'm sure they will want to get this right.Next date on the financial calendar is 19th March for the half yearly results so I doubt there will be anything released before then.Pointless updating the market when you have nothing to update.

[albert arthur] 09/2/2024 08:25

409,429,439 potential entry targets... expect an end of day Friday selloff...

[dplewis1] 09/2/2024 08:19

If the amounts have been overblown by the media this is a good buying opportunity.. already a 15% upside to RBC's revised target price

[pj84] 08/2/2024 23:57

This was posted on the Lloyds thread: -

"richie1218 8 Feb '24 - 13:32 - 27506 of 27515

Below are a few snippets from the Policy Statement regarding the motor finance debarcle,

The document states that "a ban would save motor finance consumers around £165m a year" where are these people getting billions of compo from...
And also it looks like it was the fca's own rules ambiguity that may have caused all this in the first place "We agreed that our rules and guidance could be clearer to reflect our policy aims".



Financial Conduct Authority
Motor finance discretionary commission models and consumer credit commission disclosure – feedback on CP19/28 and final rules.

CP19/28, published in October 2019, set out the following proposals to address this
harm.
• A ban on ‘discretionary commission models’ in the motor finance market. We
classed these as discretionary commission models if the amount the broker
receives is linked to the rate that the customer pays and which the broker has
the power to set or adjust. We estimated that banning discretionary commission
models would save motor finance consumers around £165m a year. We proposed
that the ban would come into effect 3 months after we published the final rules.
• Amending parts of our rules and guidance on the disclosure of commission
arrangements with lenders. We agreed that our rules and guidance could be clearer
to reflect our policy aims. We proposed relatively minor Handbook changes to give
consumers in all consumer credit markets more relevant information. We proposed
that these changes would come into effect as soon as we published the final rules."

[jonnybig] 08/2/2024 21:53

Maybe there's no case to answer at this stage? Martin "ear piece" Lewis's programme was wishy washy and the fca representative was a waste of space.

Not convinced at all this motor finance issue is comparable with the ppi scandal, and even though the lenders have expressed they will assist in the fca investigation, there's a good chance this is a storm in a tea cup and the lenders will legally successfully challenge any alleged wrong doings.

[damanko] 08/2/2024 09:57

Quite sad.

The BOD failing to come clean, issuing clear guidance on what is going on with the car finance stuff, is turning CBG into a typical day trader's stock, buy in the morning, and hope for an uptick when Wall Street opens. Then sell, and wait another day.

I reckon regular long term, income seeking investors will be thinking 'barge pole' until the Board do the right thing.

Think Lloyds Bank, once a safe, boring bank stock, hovering above £3, paying a juicy, well covered dividend, year after year... We know the rest.

d.

[albert arthur] 07/2/2024 21:11

Fibs: 7 & 2 Day. Think this is going lower before recovery:CBG 495.18 492.05 489.52 486.99 483.39 481.24 472.97 469.92 465.55 459.50 448.48 444.11 422.67 409.42INTRADAY 496.79 494.66 492.94 491.22 488.76 487.30 481.67 479.60 476.62 472.50 465.00 462.02 447.42 438.39

[pj84] 07/2/2024 21:06

The following is from yesterday's questor column which starts with GSK and then provides an update on Close brothers, S&U, and Lloyds all potentially affected by the car finance probe: -

...

"Our previous tips include several names that provide motor finance, such as Close Brothers, S&U and Lloyds Banking Group.

We now face a tricky decision, as second-guessing the outcome of the investigation is impossible (as per this column’s mantra of “never bet upon stewards’ inquiries, for the stewards know not what they do”).

The damage is already done with Close Brothers’ shares, and it appears to have sufficient regulatory capital and a sufficiently lowly valuation relative to book value, so we shall tough it out.

S&U, covered here in 2019, is a well run business but we will bank our diminished profit (boosted by very healthy dividends) in the view that we can return to it another time.

Lloyds, which we wrote about in May 2022, has a double-digit percentage share of Britain’s motor financing market and PPI is an unfortunate precedent.

The bank is well capitalised but it trades at 0.9 times historic book value and we fear par value could be a cap until this regulatory cloud lifts. So we shall – reluctantly – walk away for now and seek better opportunities elsewhere.

We’ll sell S&U and Lloyds but hold on to Close Brothers."

That was before today's further fall and at the current share price I am going to continue to hold.


"hTTps://www.telegraph.co.uk/money/investing/gsk-performing-well-despite-legal-clouds-heartburn/

[albert arthur] 07/2/2024 20:54

Wow staggeringly since we launched our new car finance commission reclaiming tool at 7:30pm last night, already it has generated 130,000 complaint letters for people. If 40% of those end up due an average £1,100 as predicted, that'd mean £57,000,000 paid. See the guide... moneysavingexpert.com/reclaim/reclai...https://x.com/martinslewis/status/1755203615961080255?s=46

[cirlbunting1] 07/2/2024 11:02

Final tranche set at 4.2.. not sure if we will hit that price but hoping.

[dplewis1] 07/2/2024 08:07

Peel Hunt cuts target price to 518p from 785p

[alex1621] 06/2/2024 19:05

Martin Lewis show tonight will focus on how to claim on the car finance issue. I would expect an avalanche of claims in the next few months. The fact that anyone could have raised finance from alternative sources is not considered, caveat emptor no longer applies.

[petersinthemarket] 03/2/2024 13:09

2 February 2024
(Bloomberg) -- Close Brothers Group Plc extended a share price rout that has wiped out a third of its value this year, amid ongoing reviews by the Financial Conduct Authority of two markets in which the 145-year-old British bank operates in.
The stock fell as much as 5% on Friday, as RBC Capital downgraded its rating due to the regulator’s separate reviews of both motor financing and insurance taken out on credit, known as premium finance. Close Brothers, which also owns City of London stockbroker Winterflood Securities Ltd, has seen £424 million ($537 million) erased from its market capitalization amid this year’s 35% stock plunge, according to data compiled by Bloomberg. “Management are under pressure here,” said RBC analyst Benjamin Toms, warning that the saga is putting the group’s interim dividend — due next month — in question.
“They will have to weigh up keeping income investors happy against making sure that capital is robust enough to potentially take a large hit from motor finance,” added Toms. RBC cut Close Brothers to market perform — the equivalent of neutral — from outperform.
Close Brothers declined to comment. Last month, the FCA said it would review car finance loans made before 2021 amid complaints of misselling, which could result in millions of customers being eligible for compensation. It’s also weighing a crackdown on insurance premium financing after describing the business as a “poverty premium.”

[lindowcross] 02/2/2024 19:48

From The °Times today, looks like another issue has arisen - premium finance. As a long term holder, this is not good news. "Close Brothers fell by 26½p, or 5 per cent, to 501p afterthe merchant banking group was subject to a downgrade by RBC. The broker reckoned that while a review of motor finance, a large part of Close Bros’ business,was already baked into the price, the fact that premium finance was also in the regulator’s crosshairs meant there was little upside for Close Brother’s in the short term"

[2theduke] 02/2/2024 18:15

Same thing again, every day / £1m trade. Seen it last 4 days now.