Evidence suggests that neurocognitive dysfunction is a transdiagnostic feature of individuals across the continuum between schizophrenia and bipolar disorder. However, there is significant heterogeneity of neuropsychological and social-cognitive abilities in schizophrenia, schizoaffective disorder, and bipolar disorder. The current study aimed to investigate the clinical and developmental characteristics of cognitive subgroups within the schizo-bipolar spectrum. 147 clinically stable patients with schizophrenia, schizoaffective or bipolar disorder were assessed using clinical rating scales for current psychotic and affective symptoms, and a comprehensive neuropsychological battery including measures of social cognition (Hinting and Reading the mind from the Eyes (RMET) task)). Developmental history and premorbid academic functioning were also evaluated. The study also included 36 healthy controls. Neurocognitive subgroups were investigated using latent class analysis (LCA). The optimal number of clusters was determined based on the Bayesian information criterion. A logistic regression analysis was conducted to investigate the predictors of membership to the globally impaired subgroup. LCA revealed two neurocognitive clusters including globally impaired (n = 89, 60.5%) and near-normal cognitive functioning (n = 58, 39.5%) subgroups. The near-normal cognitive functioning subgroup was not significantly different from healthy controls. The globally impaired subgroup had a higher score of developmental abnormalities (p<0.001), poorer premorbid academic functioning, mothers who were less educated and more severe disorganized speech (p = 0.001) and negative symptoms (p = 0.004) compared to the near-normal cognitive functioning group. History of developmental abnormalities and persistent disorganization rather than diagnosis are significant predictors of the subgroup of individuals with global cognitive impairment in the schizophrenia-bipolar disorder continuum.