Merchant bank Close Brothers Group PLC (LSE:CBG) has confirmed that it will appeal to the Supreme Court against an October ruling over its motor finance practices.
Close Bros and Lloyds Banking Group PLC (LSE:LLOY) were found liable for potentially billions of pounds of customer compensation over their failure to disclose commissions received from loans for car purchases accurately.
In a first-quarter trading update published on Thursday, Close Bros said: “It remains our position that the group disagrees with the court's findings and that the judgment raises important issues of law and general public importance that should be determined by the Supreme Court.
“The group intends to submit an application for permission to appeal the Court's decision directly to the Supreme Court imminently.
“Given the judgment's broader relevance and potential impact on the group, we intend to request that the Supreme Court considers our application for permission on an expedited basis.”
Close Bros added that the financial impact of the regulatory review into motor finance commissions remains uncertain.
Today, The Financial Conduct Authority announced an extension to the deadline for banks handling complaints.
The ruling has caused chaos in the motor finance market, with numerous lenders exiting their market entirely.
Elsewhere in the first-quarter results, Close Bros’ loan book increased by 0.6% sequentially and the year-to-date net interest margin remained steady at 7.3%.
The bank’s market maker ring Winterflood posted an operating loss of £700,000 in the first quarter due to “unfavourable market conditions”.
Its asset management wing, which Close Bros agreed to sell in September to shore up its cash position amid motor finance uncertainty, saw net inflows of 4%.