"Lloyds Banking Group has set aside an additional £800 million to cover potential compensation claims related to the car finance mis-selling scandal, as the UK's financial regulator finalises plans for a sweeping redress scheme. The FTSE 100 lender said the provision "reflects the increased likelihood of a higher number of historical cases being eligible for redress" and a "higher level of redress than anticipated" under previous assumptions."
"The move follows last week's update from the Financial Conduct Authority (FCA), which detailed how it plans to compensate drivers over historic commission arrangements between car dealers and lenders. With the latest charge, Lloyds has now earmarked £1.95 billion in total to address potential claims. The group - one of the UK's biggest car finance providers through its Black Horse brand - has been among the most exposed to the FCA investigation, which centres on discretionary commission models"
Lloyds Banking Group set aside an additional £800 million to cover potential compensation claims tied to historic car finance mis-selling, bringing total provisions to £1.95 billion. The Financial Conduct Authority has outlined plans to compensate drivers affected by historic commission arrangements between car dealers and lenders, and estimates industry redress could reach £11 billion. The investigation focuses on discretionary commission models that may have incentivised brokers to increase interest rates for borrowers. Analysts warn the scandal could weigh on bank earnings into 2026, and other major lenders are expected to make further provisions. Lloyds says it continues to engage with the regulator.
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