No evidence of damage to the motor financing scandal

The managing director of the Lloyds Banking Group was suspended on Tuesday in front of a grill of the Treasury Select Committee due to the historical exposure of the lender compared to the motor level market.

Charlie Nunn, the head of the bank, said that there is “no evidence of damage” from the company's business activities on the car financing market.

The scandal in this sector went to the Supreme Court at the beginning of April when the lenders argued for a change in the Court of Appeal that it was illegal for banks to pay a commission without the customer's declaration of consent.

Now said he was expecting a decision from the country's highest court in July.

The Financial Conduct Authority (FCA) has undertaken to carry out an industry -wide legal feed within six weeks if a negative judgment is handed over to the lender.

Analysts have expected “shock waves” in the entire bank and financial services industry if the Supreme Court confirms the judgment of the Court of Appeal.

But now repeated Lloyds, “have no evidence of damage or that we broke the regulation.”

Instead, the banker said that the court of appeal seems to be contradictory of 30 years of legislative regulations and, according to the judgment of the court, called for a “clarity”.

“Without clarity, it will create a functional disorder on the market,” he warned.

Barclays has hundreds of engineers for motor -financing complaints

Lloyds heads the package for supplies that are reserved for the motor financing scandal with 1.2 billion GBP.

Barclays reserved 90 million GBP. The British managing director of the lender, Vim Maru, commented on an increase in complaints in connection with motor financing, even though he left the market in 2019. He emphasized certain complaints that are due to two decades, which made it “more difficult”.

Maru said that Barclays “dedicated a few hundred employees to deal with the processing and preparation of the decision of the Supreme Court if there are further inquiries”.

Analysts from RBC Capital predicted the overall remuneration for the motor financing scandal could reach up to 32 billion GBP.

In a base case, analysts had the banking sector for 5.9 billion GBP on the hook. But this number doubled in a downward scenario to 10.8 billion GBP.

If the saga steered in the direction of a “worst case”, Lloyds would be faced with a 3.6 billion GBP.

Despite the increasing provisions, Nunn said that there were “no significant changes in consumer behavior”.

“Everything will depend on the details of the decision.”