Lloyds estimates £1.95bn hit from motor finance scandal

Lloyds Banking Group has acceptable speech a further £800m to screen estimated costs associated with the car concern mis-selling scandal.

The slope said the sum took its full proviso to £1.95bn.

It had been assessing the interaction since the Financial Conduct Authority (FCA) revealed past week it was consulting connected a compensation scheme, with up to 14.2 cardinal car concern agreements perchance eligible for payouts.

The regulator had antecedently recovered that galore lenders failed to disclose committee paid to brokers, which could person led to customers paying much than they should person betwixt April 2007 and November 2024.

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Eligible customers could person an mean of £700 each nether the proposals.

Lloyds said connected Monday that it would beryllium contributing to the consultation to reason a fig of points.

Lloyds said connected Monday morning: "The Group remains committed to ensuring customers person due redress wherever they suffered loss, nevertheless the Group does not judge that the projected redress methodology outlined successful the consultation papers reflects the existent nonaccomplishment to the customer. Nor does it conscionable the nonsubjective of ensuring that consumers are compensated proportionately and reasonably wherever harm has been demonstrated.

"In addition, the attack to unfairness successful the redress strategy does not align with the ineligible clarity provided by the caller Supreme Court judgement successful Johnson, successful which unfairness was assessed connected a information circumstantial ground and against a non-exhaustive database of aggregate factors. The Group volition marque representations to the FCA accordingly."

Shares successful Lloyds, which fell past week erstwhile the slope warned of a imaginable "material" summation successful its provisions, could crook higher connected Monday arsenic the estimated compensation fig came successful by little than immoderate fiscal analysts had predicted.

The shares are 50% up successful the twelvemonth to date.

Another listed lender exposed to car indebtedness mis-selling is besides expected to rise the magnitude it has acceptable aside.

Close Brothers, which has a £165m proviso currently, saw its shares tumble 7% erstwhile it admitted an summation was apt erstwhile its investigation of the compensation consultation documents was completed.

Car concern makes up astir a 4th of its full indebtedness book.