Lloyds makes £450 million provision for FCA review

Lloyds Banking Group has announced a £450 million provision for the potential impact of the FCA review into historical motor finance commission arrangements in its fourth quarter results. The bank’s total provision for bad loans was £541 million, substantially higher than analysts’ predictions of £126 million, and a big increase on the £187 million set aside in the third quarter.

Lloyds makes £450 million provision for FCA review

Feb 22, 2024

Lloyds Banking Group has announced a £450 million provision for the potential impact of the FCA review into historical motor finance commission arrangements in its fourth quarter results. The bank’s total provision for bad loans was £541 million, substantially higher than analysts’ predictions of £126 million, and a big increase on the £187 million set aside in the third quarter.

FLA launches broker accreditation scheme

The Finance & Leasing Association (FLA) has announced a new service offering funders a single-source broker review, streamlining the checking process for working with intermediaries, in a move designed to reduce the cost and time required for lenders to demonstrate that core compliance requirements are being met. Speaking at the association’s annual dinner, FLA chair John Phillipou said the service, branded ‘FLA Accredited Broker’, would ‘help participating brokers demonstrate best practice through alignment with our Business Finance Code and compliance with FCA regulations.’

FLA launches broker accreditation scheme

Feb 21, 2024

The Finance & Leasing Association (FLA) has announced a new service offering funders a single-source broker review, streamlining the checking process for working with intermediaries, in a move designed to reduce the cost and time required for lenders to demonstrate that core compliance requirements are being met. Speaking at the association’s annual dinner, FLA chair John Phillipou said the service, branded ‘FLA Accredited Broker’, would ‘help participating brokers demonstrate best practice through alignment with our Business Finance Code and compliance with FCA regulations.’

What might be the eventual outcome of the FCA investigation? Julian Rose makes his assessment

Julian Rose, director, Asset Finance Policy, and a regular commentator on the asset finance industry provides his take on the eventual outcome from the FCA review of motor finance and the impact on the lending market. There’s a lot of uncertainty about what the FCA will do later this year after it completes the review announced in January. Until then, the regulator has said it will ‘analyse the issues and decide what, if any, further action including legal steps are necessary’. The effects in the meantime can be seen in Close Brother’s share price, down by over 60% since the FCA’s announcement, and estimates by some analysts of the market-wide costs of compensation to customers at up to £13 billion.

What might be the eventual outcome of the FCA investigation? Julian Rose makes his assessment

Feb 19, 2024

Julian Rose, director, Asset Finance Policy, and a regular commentator on the asset finance industry provides his take on the eventual outcome from the FCA review of motor finance and the impact on the lending market. There’s a lot of uncertainty about what the FCA will do later this year after it completes the review announced in January. Until then, the regulator has said it will ‘analyse the issues and decide what, if any, further action including legal steps are necessary’. The effects in the meantime can be seen in Close Brother’s share price, down by over 60% since the FCA’s announcement, and estimates by some analysts of the market-wide costs of compensation to customers at up to £13 billion.

Close Brothers axes dividend citing FCA review ‘uncertainty’

Close Brothers has announced it will not be paying a dividend this year and is reviewing plans for any future payouts, as a result of what it called ‘significant uncertainty’ about the outcome of the FCA’s review of historical motor finance commission arrangements.

Close Brothers axes dividend citing FCA review ‘uncertainty’

Feb 15, 2024

Close Brothers has announced it will not be paying a dividend this year and is reviewing plans for any future payouts, as a result of what it called ‘significant uncertainty’ about the outcome of the FCA’s review of historical motor finance commission arrangements.

FCA probe has ‘significant financial ramifications’

A senior Bank of England official has branded the use of discretionary commissions “a bad structure and a bad incentive” and cautioned that the FCA’s investigation into the motor finance market could have “significant financial ramifications” for lenders. Sam Woods (pictured), CEO of the Prudential Regulation Authority (PRA), said the Bank was “very closely engaged” with the FCA and with the firms involved, not from concerns about financial stability issues, but because “the range of outcomes seems quite wide”.

FCA probe has ‘significant financial ramifications’

Feb 14, 2024

A senior Bank of England official has branded the use of discretionary commissions “a bad structure and a bad incentive” and cautioned that the FCA’s investigation into the motor finance market could have “significant financial ramifications” for lenders. Sam Woods (pictured), CEO of the Prudential Regulation Authority (PRA), said the Bank was “very closely engaged” with the FCA and with the firms involved, not from concerns about financial stability issues, but because “the range of outcomes seems quite wide”.

Inflation holds steady at 4% in January

UK inflation was unchanged in January 2024 remaining at 4.0%, according to figures released today by the Office for National Statistics (ONS). Despite forecasters predicting a rise, the Consumer Prices Index (CPI) remained 4.0% in the 12 months to January 2024, the same rate as in December 2023, and down from a peak of 11.1% in October 2022, the highest rate in over 40 years.

Inflation holds steady at 4% in January

Feb 14, 2024

UK inflation was unchanged in January 2024 remaining at 4.0%, according to figures released today by the Office for National Statistics (ONS). Despite forecasters predicting a rise, the Consumer Prices Index (CPI) remained 4.0% in the 12 months to January 2024, the same rate as in December 2023, and down from a peak of 11.1% in October 2022, the highest rate in over 40 years.

GAP insurance clamp-down

The Financial Conduct Authority (FCA) has intervened in the motor finance market for the second time in as many months, requiring multiple insurance firms to halt sales of Guaranteed Asset Protection (GAP) products over concerns that the product is failing to provide fair value to some consumers.

GAP insurance clamp-down

Feb 12, 2024

The Financial Conduct Authority (FCA) has intervened in the motor finance market for the second time in as many months, requiring multiple insurance firms to halt sales of Guaranteed Asset Protection (GAP) products over concerns that the product is failing to provide fair value to some consumers.

Industry must collaborate to manage regulatory creep into SME lending

Asset finance providers are closely watching the Financial Conduct Authority's (FCA) investigation into discretionary commission arrangements in the motor finance sector. Although asset is mostly focused on non-regulated transactions there is a reasonable expectation among many that the regulations that are likely to result in industry-busting fines for motor finance will be coming their way soon.

Industry must collaborate to manage regulatory creep into SME lending

Feb 09, 2024

Asset finance providers are closely watching the Financial Conduct Authority's (FCA) investigation into discretionary commission arrangements in the motor finance sector. Although asset is mostly focused on non-regulated transactions there is a reasonable expectation among many that the regulations that are likely to result in industry-busting fines for motor finance will be coming their way soon.

FCA commission review: How does it add up?

Big bills for compensation are likely following the conclusion of the Financial Conduct Authority’s (FCA) review of historical motor finance commission arrangements, which is expected to complete in the third quarter of this year. The FCA is believed to be looking back over 15 years of deals, with Sheldon Mills, the regulator’s executive director, consumers and competition, stating that 75% of the loan agreements between 2007 and 2021 had some form of discretionary commission.

FCA commission review: How does it add up?

Feb 08, 2024

Big bills for compensation are likely following the conclusion of the Financial Conduct Authority’s (FCA) review of historical motor finance commission arrangements, which is expected to complete in the third quarter of this year. The FCA is believed to be looking back over 15 years of deals, with Sheldon Mills, the regulator’s executive director, consumers and competition, stating that 75% of the loan agreements between 2007 and 2021 had some form of discretionary commission.

FCA commission review: How far can it go?

The motor finance industry is bracing itself for a deluge of consumer complaints about mis-selling following the announcement in early January of a Financial Conduct Authority (FCA) review of historical motor finance commission arrangements and sales across several firms.

FCA commission review: How far can it go?

Feb 08, 2024

The motor finance industry is bracing itself for a deluge of consumer complaints about mis-selling following the announcement in early January of a Financial Conduct Authority (FCA) review of historical motor finance commission arrangements and sales across several firms.

Interest rates held at 5.25% by Bank of England

The Bank of England has held interest rates at 5.25% for the fourth consecutive time, with the Monetary Policy Committee split three ways on the decision. It had been feared that interest rates would be increased following an inflationary rise in December 2023 to 4.0% from 3.9% in November.

Interest rates held at 5.25% by Bank of England

Feb 01, 2024

The Bank of England has held interest rates at 5.25% for the fourth consecutive time, with the Monetary Policy Committee split three ways on the decision. It had been feared that interest rates would be increased following an inflationary rise in December 2023 to 4.0% from 3.9% in November.

UK inflation unexpectedly rose to 4% in December

UK inflation unexpectedly rose to 4.0% in December 2023 from 3.9% in November. The Consumer Prices Index (CPI) marginal rise was attributed to rising alcohol and tobacco prices as a result of recently introduced increases in tobacco duty. The Office for National Statistics figures for December mean inflation has risen for the first time since February 2023, surprising economists who believed that inflation would continue to fall to 3.8%.

UK inflation unexpectedly rose to 4% in December

Jan 17, 2024

UK inflation unexpectedly rose to 4.0% in December 2023 from 3.9% in November. The Consumer Prices Index (CPI) marginal rise was attributed to rising alcohol and tobacco prices as a result of recently introduced increases in tobacco duty. The Office for National Statistics figures for December mean inflation has risen for the first time since February 2023, surprising economists who believed that inflation would continue to fall to 3.8%.

FSB super-complaint calls out banks’ use of harsh personal guarantees for business loans

The Federation of Small Businesses (FSB) has issued a ‘super-complaint’ to the Financial Conduct Authority (FCA) to highlight the harsh lending practices of banks that excessively demand personal guarantees for business loans. The 'super-complaint' marks the first instance of such an action taken against the financial watchdog.

FSB super-complaint calls out banks’ use of harsh personal guarantees for business loans

Dec 14, 2023

The Federation of Small Businesses (FSB) has issued a ‘super-complaint’ to the Financial Conduct Authority (FCA) to highlight the harsh lending practices of banks that excessively demand personal guarantees for business loans. The 'super-complaint' marks the first instance of such an action taken against the financial watchdog.