Close Brothers halts dividend due to FCA’s motor finance probe.

The UK financial services company, Close Brothers, has announced that it will suspend its dividend payout for fiscal year 2024 as it assesses the impact of the Financial Conduct Authority’s (FCA) investigation into past commission arrangements made by motor finance companies. The company plans to review the reinstatement of dividends for fiscal year 2025 and beyond once the FCA has concluded its process and the financial consequences have been assessed. Close Brothers stated that there is significant uncertainty surrounding the outcome of the FCA’s review, and it cannot reliably estimate the potential financial impact at present. The company is taking several actions to accrete capital, including optimizing risk-weighted assets and implementing cost management initiatives. The FCA’s investigation into historic commission arrangements follows a high number of customer complaints. Close Brothers reported strong performance in its banking division, generating £112 million ($140.7 million) of adjusted operating profit for the six months ended January 31. The company expects to deliver an adjusted operating profit of approximately £94 million after net expenses.