Business
Close Brothers to cut hundreds of jobs amid criticism over car finance scandal plan
One day after a famous short-seller said Close Brothers has “systematically misrepresented” the extent of its exposure to the car loan mis-selling scandal, the merchant bank said it would axe 600 jobs as it looks to cut costs.
Yesterday shares in the finance house tumbled 14 per cent on Monday after Viceroy Research, which has previously called out Wirecard and Home Reit, said Close would have to at least double its provision for the scandal, which could end up costing the car loan sector £10 billion, watchdogs estimate.
Close expects to pay £300m for the car saga, which saw the commission paid to sales people not disclosed to consumers.
Lloyds Bank has the biggest exposure of any financial business, with much of the car trade also on the hook. Lloyds could end up paying out £2bn, though it has raised criticisms of how the regulator, the Financial Conduct Authority, is calculating payments.
The FCA said payouts are due on around 14 million unfair car finance deals, averaging at about £700 each, within a 360-page consultation document for its proposed redress scheme published last week.
Shares in Close were up slightly today at 360p.
The firm said the cuts – nearly a quarter of its 2,600-strong workforce – would be made over the next 18 months across its teams in the UK and Ireland.
It comes as part of plans to cut costs by about £25 million in its current year to the end of September, up from a £20 million previous target, and by around another £60 million in the next financial year, which is a year earlier than planned.
The cuts will come from actions including moves to outsource and offshore work, cut back its office network and roll out the use of artificial intelligence (AI) “at pace”.
Chief executive Mike Morgan said: “While the impact on affected colleagues is regrettable, these actions are necessary to structurally lower our cost base, while increasing our agility and ability to serve our customers.”
The note from Viceroy said: “We believe Close Brothers has systematically misrepresented its exposure to the Financial Conduct Authority’s forthcoming motor finance consumer redress scheme.”
Viceroy thinks Close could have to pay out between £572m and £1.23bn to compensate customers in all. At the higher end, that exceeds the entire market value of the company.
Close Brothers said it “strongly disagrees” with Viceroy’s conclusions. It added: “Our provisioning approach in relation to this matter is in accordance with UK-adopted international accounting standards and follows a robust governance process.”
Short-sellers such as Viceroy take a market position against shares, betting they will fall.
Close today which it reported a £65.5m loss for the six months to the end of January. It reported a £102.2m loss for the same period last year.
Additional reporting by PA
Two ads promoting British beef and milk have been banned after television presenter and environmental campaigner Chris Packham complained that they misled consumers about the products’ carbon footprints.
Both ads for the Agriculture and Horticulture Development Board’s (AHDB) Let’s Eat Balanced campaign used the carbon footprint of British beef and milk to promote the products, firstly stating: “British beef not only tastes great, but has a carbon footprint that’s half the global average*.”
The asterisk linked to text that stated: “Full lifecycle emissions of CO2 eq (carbon dioxide equivalent) per kg of beef.”
The ad for milk stated: “British milk not only tastes good, but is also produced to world-class standards, and has a carbon footprint a third lower than the global average.”
Packham complained to the Advertising Standards Authority (ASA) that the ads, and specifically the carbon footprint claims, were misleading as they did not reflect the full environmental impact of British meat and dairy.
The AHDB said the ads’ mention of carbon emissions would be understood in relation to the environmental impact of beef and milk that occurred between the “cradle-to-retail” stages.
But the ASA said the average consumer “being reasonably well-informed, observant and circumspect” would understand the claims to apply beyond the retail stage and include actions such as cooking and wastage.
The ASA said: “While we acknowledged the potential difficulties in producing post-retail emissions data, the claims in the ads suggested those emissions were included and we therefore expected the evidence provided to also include them.
“We therefore concluded that the evidence presented was insufficient to support the full life-cycle claims in the ads, which was how the average consumer was likely to interpret them.
“We reminded AHDB that environmental claims should be based on the full life cycle unless the ad stated otherwise.”
AHDB’s director of communications and market development, Will Jackson, said: “Let’s Eat Balanced is doing what it was designed to do, providing clear, factual, evidence-led information about British food, nutrition and farming standards.
“Since the investigation began, we have conducted independent consumer research which found that the majority of respondents interpreted these adverts as relating to the production phase only, from farm to retail.
“This research provides important insight into consumer understanding and supports our belief that consumers were not misled by the information we shared in these two specific adverts.”
BENGALURU: India’s Gen Z workforce is embracing what experts describe as “portfolio careers” – balancing multiple professional identities and income streams simultaneously. New research from LinkedIn shows that 75% of Gen Z entrepreneurs in India now manage multiple income streams, significantly higher than the 62% among Gen X entrepreneurs. The findings point to a growing preference among younger professionals for flexibility, autonomy and diversified sources of income. “We’re also seeing the rise of the ‘portfolio era’, with more professionals creating multiple income streams and redefining what a career can look like. This shift is making entrepreneurship more accessible than ever before,” said LinkedIn India country manager Kumaresh Pattabiraman.Rather than depending on a single full-time role, many professionals are simultaneously building businesses, freelancing, consulting, creating online content and monetising specialised skills through digital platforms. The trend comes amid a broader rise in entrepreneurial activity in India. LinkedIn recorded a 104% year-on-year increase in members adding “Founder” to their profiles – the highest growth among all global markets.AI is also emerging as a major enabler of this shift. The report found that 85% of Gen Z entrepreneurs consider AI and digital tools important to their business operations.
Sam Altman said Elon Musk tried many times for total control of OpenAI, which he’s now suing.
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