Close Brothers Group PLC (LSE:CBG) has raised provisions for potential motor finance redress to around £300 million following last week's proposal from the Financial Conduct Authority on an industry-wide compensation scheme.
The update adds £135 million to the group’s previous £165 million provision, after the FCA outlined details on which commission models would be covered, how unfairness would be assessed and how compensation would be calculated.
The lender said the new guidance places potential costs at the upper end of its earlier forecasts and like Lloyds yesterday, said it "does not believe the redress methodology proposed by the FCA appropriately reflects actual customer loss or achieves a proportionate outcome".
Its Common Equity Tier 1 capital ratio remains strong at around 13% after taking the additional charge, comfortably above the regulatory minimum of 9.7%.