(Bloomberg) – The UK Supreme Court has refused to intervene in a groundbreaking trial over a controversial car loan.
The Treasury said last month that incidents regarding historic practices in car financing could cause considerable economic harm and could hinder the availability of domestic car loans. A Supreme Court spokesman scheduled to hear the case in early April gave no reason for his denial. The Ministry of Finance did not immediately comment.
Lloyds Banking Group PLC stock fell by 4%, while Close Brothers Group PLC fell by 15%.
The incident, and related regulatory investigation into the issue, is feared that investors will face costly compensation claims against consumers affected by practice, and therefore the UK Bank shares. We are comparing and considering the following:
Meanwhile, the UK Financial Conduct Authority is intervening in disputes between lenders and multiple clients.
“As long as the FCA is likely to be involved in future relief programs, this could be considered positive, especially if the FCA shares similar views with HMT regarding how potential future relief is calculated. ” wrote Gary Greenwood, an analyst at Shore Capital, in a note. “Ultimately, the situation and potential consequences are subject to significant uncertainty.”
Analysts at Bank of America Corp. recently estimated that the industry could face £38 billion in costs associated with the Motor Finance Saga. Lloyds, the biggest provider of auto finance, could be on the hook for £3 billion, they found. The bank has already secured £450 million ($589 million) to pay compensation and other expenses.
Close Brothers said this month it plans to secure a first half of £165 million ($205 million) due to compensation and other expenses that could be linked to the case and regulatory investigation. Ta.
– Support from Philip Aldrick.
(Stock price update, analyst comments from the third paragraph.)
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