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The FCA's intervention may complicate the compensation process for banks facing potential payouts exceeding £10 billion due to a court ruling on motor finance. It argues that each case should be evaluated individually, which could limit payouts and increase reputational risks for banks like Lloyds and Close Brothers. Investors will need to await the Supreme Court's decision later this year for clarity on the situation.
Lloyds and Close Brothers face significant scrutiny as the UK's Supreme Court hears a case regarding motor finance mis-selling, which could lead to substantial compensation claims for borrowers due to undisclosed commissions. Analysts estimate Lloyds may need to set aside up to £6 billion, with current provisions at £1.2 billion and expected additional charges of £1.3 billion. The outcome, anticipated in several months, could impact multiple lenders in the sector.
A multi-billion pound case involving Barclays, Lloyds, and NatWest is set to reach the Supreme Court, stemming from consumer claims against lenders for undisclosed broker commissions in motor finance products. The Court of Appeal previously ruled such commissions unlawful unless transparently disclosed, a decision now under appeal. Analysts warn that a broad ruling could impact mortgage lenders, as many past broker remuneration arrangements may not comply with current standards.
President Trump has nominated Michelle Bowman as the Federal Reserve's vice-chair for supervision, aiming for a more industry-friendly regulatory approach. Meanwhile, UBS has delayed its net zero target from 2025 to 2035 due to an expanded corporate real estate portfolio after acquiring Credit Suisse. Close Brothers reported a £104 million loss linked to a car finance scandal, while Santander plans to expand its US presence through a partnership with Verizon, offering bill credits for new high-yield savings accounts.
Lloyds Bank's share price has surged 13% in January 2025, nearly matching its entire 2024 gain, following supportive comments from the UK Treasury regarding potential liabilities from a mis-selling scandal. The Chancellor's plea for leniency could ease financial burdens on the bank, which has set aside £450m but may face costs up to £1.5bn. While uncertainty remains, this development may bolster investor confidence in Lloyds' future and its projected 4.8% dividend yield.
The UK's Financial Conduct Authority is contemplating extending the timeframe for banks to address customer complaints related to fixed commissions on auto loans. This consideration arises amid ongoing scrutiny of significant lawsuits involving Close Brothers Group Plc and FirstRand Ltd, both of which plan to appeal their recent losses.
The UK's Financial Conduct Authority plans to request the Supreme Court expedite its decision on two significant cases involving auto lenders Close Brothers Group Plc and FirstRand Ltd. These cases are crucial for the FCA's ongoing regulatory investigation into car finance practices, as both lenders intend to appeal their recent losses.
UK banks are facing potential payouts in the billions following a court ruling that deemed lenders insufficiently transparent regarding auto loans. Analysts from Citigroup Inc. suggest that the estimated £9 billion charge for the sector could double if the ruling influences broader motor financing practices in Britain.
Shares of Close Brothers Group Plc fell sharply after the company lost a court ruling regarding its disclosure obligations for car loan customers, which could lead to significant liabilities. In response, Close Brothers has paused new UK motor finance business while reviewing its processes and plans to appeal the decision to the UK’s Supreme Court.
Lazard has appointed Will Thompson as Managing Director of Healthcare Services, effective November 4, 2024, based in London. Thompson, who previously worked at Lazard from 1998 to 2004, joins from Barclays, enhancing Lazard's healthcare advisory capabilities alongside recent hire Michele Colocci. The firm has seen significant growth in its healthcare business, advising on over $245 billion in transactions since 2020.
Close Brothers Group plc
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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