RBC Capital Markets upgraded Close Brothers Group Plc to outperform, lifting its target to 625p from 475p. The move follows expectations of deeper cost cuts than current forecasts. Shares surged over 8% after the note, reflecting optimism about the bank’s restructuring plans and potential earnings lift for investors in the near term.

RBC cites a £32 million annual savings package, roughly 7% of FY25 costs, driven by management changes, offshore middle‑office roles, and headcount cuts. The bank projects a FY28 cost base of £402 million and a cost‑to‑income ratio of 56%, down from 59%. This reduction should improve profitability and shareholder returns for the company.

With a projected FY28 profit before tax of £205 million and adjusted EPS of 94.3p, RBC lifts its valuation model, citing a 12.5% cost of equity. The bank’s CET1 ratio is expected to hit 12.2%, comfortably covering restructuring costs and supporting future loan growth while maintaining regulatory compliance and capital adequacy.