Lloyds surges after motor finance ruling
By Michele Maatouk
Date: Monday 04 Aug 2025
(Sharecast News) - Lloyds Banking Group surged on Monday after the Supreme Court ruled largely in favour of banks in the car finance case, as it said it will keep its £1.2bn provision under review but that it was unlikely there would be any material changes.
In its long-awaited ruling on car finance, the Supreme Court announced late on Friday that hidden commissions from lenders to dealers on car loans were not unlawful. The ruling means that millions of motorists will not be able to claim compensation.
Following the ruling, the Financial Conduct Authority said it will consult on running a compensation scheme.
In a statement on Sunday, the FCA said it was unlikely that the cost of the scheme, including to run it, would be much lower than £9bn.
"And it could be higher, up to £18 billion in some scenarios though the FCA doesn't believe these are the most likely," it said. "A total cost midway in the range, as forecast by some analysts, is more plausible."
The FCA estimated that most individuals would probably receive less than £950 in compensation.
Lloyds reiterated on Monday that in establishing its provision, it created a range of scenarios to address uncertainties around a number of key assumptions. These included a range of potential Supreme Court outcomes, regulatory responses and outcomes in relation to redress.
"Whilst the judgment announced on 1 August provides additional clarity, there remain a number of uncertainties that the group continues to consider in its approach to provisioning," it said. "The group's approach therefore continues to include the assessment of multiple scenarios."
It added: "The ultimate impact on the group will be determined by a number of factors still to be resolved, in particular the outcome of the FCA consultation and any further interventions as well as any broader implications of the judgment, including legal proceedings and complaints."
Lloyds said that if there is any change to the provision it is unlikely to be material in the context of the group.
"The provision will continue to be reviewed for any further information that becomes available, with an update provided as and when necessary."
At 0840 BST, Lloyds shares were up 7.5% at 81.44p.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN