Close Brothers Group PLC (LSE:CBG), the mid-sized bank in the eye of the motor finance storm has appointed a new chief executive.
Adrian Sainsbury, the current chief exec has stepped down after a period of medical leave to focus on his recovery, which is going well said the statement without specifying his illness.
Mike Morgan, currently finance director, is stepping up to the CEO role permanently following Sainsbury’s departure.
Morgan takes the reins at a critical time for the bank, which is awaiting a Supreme Court ruling on the amount of compensation it has to pay for failing to tell customers the level of commissions on car purchase loans.
Estimates from credit rating agency Moody’s put the bill for the sector overall are £30 billion, with broker KBW yesterday suggesting Close Bros might have to pay out £460 million.
The bank has already halted its dividend and agreed the sale of its asset finance arm to bolster its balance sheet by £400 million ahead of the final judgement.
Lloyds Banking Group PLC (LSE:LLOY), which faces potentially the largest bill of all the car lenders, has already set aside £450 million as a provision.
The Supreme Court is expected to make its ruling on two key Court of Appeal judgements that went against Close Bros and FirstRand Bank in March this year.
Shares in Close Bros fell 2.5% to 227.2p.