Lloyds Banking Group PLC (LSE:LLOY) said it believes the impact from the Supreme Court's judgment on motor finance mis-selling is "unlikely to be material".
On Friday, the highest court in the UK largely overturned a previous Court of Appeal ruling on car finance that was expected to lead to massive compensation payouts.
The Supreme Court ruled that in many cases commission payments could be legal, but some lenders did act unfairly due in part to the size of the commission they paid to motor dealers and how it was disclosed.
The Financial Conduct Authority issued a follow-up statement on Sunday, confirming its previous guidance proposing a redress scheme for customers affected, but with individual compensation payouts estimated to be less than £950 per person.
A consultation will be launched on the redress scheme for discretionary commission arrangements (DCA) and to decide which non-DCA arrangements and other factors should be included.
Lloyds said in a statement on Monday that its existing financial provisions had allowed for a range of scenarios, including a range of potential Supreme Court outcomes, regulatory responses and outcomes in relation to redress.
It said there still remain "a number of uncertainties that the group continues to consider in its approach to provisioning", with the FCA consultation meaning the ultimate impact on Lloyds and other lenders will be determined by a number of factors still to be resolved.
Lloyds said as well as the outcome of the FCA consultation, there could be "further interventions", while broader implications of the judgment could include further legal proceedings and complaints.
"After initial assessment of the Supreme Court judgment, and pending resolution of the outstanding uncertainties, in particular the FCA redress scheme, the group currently believes 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," the FTSE 100 lender said.
The FCA said it thinks the cost of the scheme will be between £9 billion and £18 billion, most likely in the middle of the range.