Home / Business and Economy / Lloyds Stands Firm on £1.95B Motor Finance Scandal Cost
Lloyds Stands Firm on £1.95B Motor Finance Scandal Cost
3 Apr
Summary
- Lloyds confirmed its £1.95 billion provision for the motor finance scandal remains unchanged.
- The Financial Conduct Authority finalized compensation rules for mis-sold deals.
- The total estimated cost for lenders now stands at £9.1 billion.
Lloyds Banking Group has announced that its provision for the motor finance scandal will remain at an estimated £1.95 billion. This figure accounts for the compensation lenders will pay to motorists affected by mis-sold deals.
The Financial Conduct Authority (FCA) recently issued its final rules for the compensation scheme. Under these new guidelines, approximately 12.1 million deals are expected to be eligible, with each typically receiving £829 in compensation.
This development brings the total estimated cost for all lenders involved to £9.1 billion, a reduction from a previous projection of £11 billion. Other financial institutions like Santander and Barclays have also set aside provisions for the scandal.
While Lloyds does not foresee a need to alter its current provision, it acknowledges that certain uncertainties persist. The bank may also face a separate legal claim amounting to around £66 million from approximately 30,000 customers.
