As a result of the firm’s losses, its adjusted operating profit was £74.9m or 15% lower than the £88.1m recorded in the first half of 2024.

This led to adjusted basic earnings per share falling by 29% from 43.4p to 30.9p.

In contrast, Close Brothers’ property finance division reported adjusted operating profits of £42.1m in the six months to 31st January 2025, up 1% from the same period a year before.

As part of an update for the wider Close Brothers Group, management hailed “solid financial performance” despite a “difficult market backdrop” for SME developers.

The property finance division grew its operating income by 6% to £68.7m over this period, which was driven by year-on-year loan book growth.

However, the net interest margin on this decreased to 7.1% - from 7.3% - in a reflection of the lower interest margins from the firm’s loan mix.

Impairment charges on the firm’s loans rose to £8.8m, from £5.2m in the first half of 2024, which was driven primarily by an “ongoing review of individually assessed provisions.”

Looking ahead, the firm’s management identified expansion outside of London and the South East as an opportunity with over 50% of the property finance portfolio made up of regional loans.

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The firm is also continuing to make hires and target other residential asset classes such as BTR and PBSAs.

Overall, Close Brothers management has been focusing on simplifying the business which included selling its asset management division in February for a profit of £59m.

Cost-cuttings are also being pursued throughout the business. Around £5m of savings are expected to be generated, leading to total savings of £25m by the end of the financial year.

A significant challenge for the business has been within its motor finance division with the FCA recently launching a review into historical discretionary commission arrangements in relation to these products.

Complaints levelled against Close Brothers over motor finance commissions has led the firm to make a £165m provision, to cover operational and legal costs as well as potential remediation for customers.

“Our goal is to ensure that, once the motor finance commissions uncertainty has been resolved, the group is well positioned to generate strong, sustainable returns,” said Mike Morgan, CEO at the group.

“Alongside a stronger capital position, delivering on these priorities will create a more efficient and resilient business, one that delivers greater value for shareholders and continues to support customers, as we have through many cycles."