Factbox: UK lenders raise motor finance mis-selling provisions

Close Brothers

29/10/2025 11:33

Updates Barclays' provision and details on Santander UK's third-quarter results

Oct 29 (Reuters) - Britain's Financial Conduct Authority this month estimated that the motor finance industry would need to compensate consumers between 8.2 billion pounds and 9.7 billion pounds ($11 billion and $13 billion) due to car loans with undisclosed commissions.

Although the FCA's compensation estimates came in lower than the earlier projections, some UK lenders have increased their provisions to align with the proposed redress scheme, while others have not updated their estimates yet since the October 7 consultation.

Here is the list of companies that have announced significant increases to their existing financial provisions:

LENDER
PROVISION SET EARLIER
TOTAL PROVISION AFTER REVISION
% CHANGE
IMPACT
Barclays BARC.L
90 million pounds
325 million pounds
261.1%
Lloyds Banking GroupLLOY.L
1.15 billion pounds
1.95 billion pounds
69.6%
Close BrothersCBRO.L
165 million pounds
About 300 million pounds
81.8%
Additional provision to reduce CET1 capital ratio by about 130 basis points on a pro-forma basis as of July 31
Bank Of IrelandBIRG.I
143 million pounds
About 350 million pounds
144.8%
Additional provision to reduce CET1 ratio of 16.0% by about 35 basis points as of June 30.
Secure Trust BankSTBS.L
5.5 million pounds
21 million pounds
281.8%
Additional provisions to reduce CET1 ratio by about 50 basis points to 12.8% as of September 30.

The UK arm of Santander SAN.MC, SANS_pa.L
withheld
its third-quarter results as the lender seeks clarity on the UK financial regulator's
proposals
 related to the motor finance mis-selling scandal. It is yet to update its previous provision of 295 million pounds.

(Sources: Reuters stories, company annual reports and press releases)

($1 = 0.7451 pounds)

 (Reporting by Ankita Bora, Nithyashree R B and Yamini Kalia in Bengaluru; Editing by Vijay Kishore)

 ((Ankita.Bora@thomsonreuters.com;))