Our prior caution in relation to Close Brothers had simply been an issue of valuation yet, after trading on 2.1-2.5x tNAV through FY13-FY18, it now stands at 1.6/1.5/1.4x FY19/20/21e tNAV (Fig 9, page 6). A material de-rating. Following Close Brothers’ FY19 pre-close statement 3 weeks ago, we have made downgrades of only 1% to our FY20/21e EPS forecasts. Bloomberg consensus has moved down by 1.5/1.95% for FY20/21 (Fig 8, page 5). The shares are down 12%. We recognise that Close Brothers is (primarily) a bank; we forecast that the Banking division will contribute 86% of underlying profit before tax in FY19e (Fig 1, page 2), yet we see these as resilient earnings shielded from the any material adverse impact from declining UK interest rate expectations (in stark contrast to the high street banks). Loan growth remains steady (Fig 2, page 2), while credit conditions are benign (Fig 3, page 3). Close is also capital accretive; we forecast a CET1 capital ratio of 13.4% by FY21e versus its minimum requirement of 9% (Fig 4, page 3). Given such capital strength, we see little risk to the sustainability of a progressive dividend policy (Figs 5/6, page 4). We continue to model 66/69/72p through FY19/20/21e, which gives a decent prospective dividend yield of 5.2/5.4/5.6%. We cut our TP to 1420p (from 1430p). According to Bloomberg, our TP remains the lowest on the street. Be that as it may, on 1.4x FY21e tNAV for ROTEs of 17.1/16.9/16.0% through FY19/20/21e (Fig 7, page 5), with strong defensive credentials plus consistent dividend support, we upgrade to Buy (from Hold).