Latest news with #CloseBrothers
Daily Mirror
5 days ago
- Automotive
- Daily Mirror
Major car finance compensation update issued today for millions of UK drivers
Earlier this year, the FCA confirmed it was consulting on a redress scheme and aims to announce the next steps for complaints within six weeks of the Supreme Court's decision A major update has been issued for millions of drivers who are waiting to see if they are due compensation over car finance mis-selling. The Financial Conduct Authority (FCA) is currently investigating whether drivers were unknowingly overcharged when they took out car loans. Specifically, the case is looking into car finance deals taken out before January 28, 2021, which contained 'discretionary commission arrangements'. This allowed car dealers to adjust the interest offered to customers without informing them, to increase their commission. The FCA banned this practice in 2021. However, last year, the independent complaints arbitrator, the Financial Ombudsman Service (FOS), said it had heard from "more than 10,000" people who feared they had been overcharged. The scandal is being compared to the infamous Payment Protection Insurance (PPI) scandal from 2008. The financial watchdog is currently waiting on a Supreme Court Verdict, which will decide whether to uphold a previous case that ruled several car finance schemes unlawful. If upheld, millions of drivers across the UK would be eligible for compensation. The outcome is set to be confirmed in July this year. Earlier this year, the FCA confirmed it was consulting on a redress scheme and aims to announce the next steps for complaints within six weeks of the Supreme Court's decision. In an update shared today, the FCA said it wanted to avoid the use of claims management companies in any compensation scheme for mis-sold car loans. Claims companies apply for compensation on behalf of individuals; however, they take a cut of the payout for their work. This means consumers do not keep all of the compensation they are owed. The 2008 PPI scandal saw a vast number of claims companies push their services onto affected consumers. According to a report from Reuters, the regulator said it aimed to make any redress scheme "comprehensive, swift, and easy for consumers to take part in" - without using claims management companies. The FCA is working on a potential redress scheme so it can move quickly if needed, but it hasn't decided whether consumers might have to opt into any scheme or would be automatically included unless they opt out. According to some analysts, the car loans scandal is projected to cost lenders, including Santander UK, Close Brothers, Barclays, and Lloyds Banking Group, over £40billion. Lloyds Banking Group, Close Brothers, and Santander have together already set aside more than £1.5billion to cover potential claims. However, the FCA said today that these estimates were too high. They said: "We've seen a range of redress rates suggested. This includes some highly speculative figures by some CMCs and law firms." Join Money Saving Club's specialist topics For all you savvy savers and bargain hunters out there, there's a golden opportunity to stretch your pounds further. The Money Saving Club newsletter, a favourite among thousands who thrive on catching the best deals, is stepping up its game. Simply follow the link and select one or more of the following topics to get all the latest deals and advice on: Travel; Property; Pets, family and home; Personal finance; Shopping and discounts; Utilities. Martin Lewis has been campaigning on this issue over the last year and has previously urged anyone who thinks they may have been affected to put in a complaint now, in case a cut-off date for complaints is introduced. You should submit your complaint directly to the lender that provided the car finance - not the broker or car dealer where you got your vehicle from. You could end up being eligible for compensation if you weren't told about commission and may have paid too much for your car finance, or if you had a car finance deal that contained a DCA. MSE has a free car finance tool to help you complain. Car finance lenders have until December 4, 2025, to respond to complaints.
Reuters
5 days ago
- Automotive
- Reuters
UK watchdog mulls scope of compensation scheme for motor finance scandal
LONDON, June 5 (Reuters) - Britain's Financial Conduct Authority on Thursday set out the considerations for a compensation scheme for customers affected by mis-sold car finance schemes, in what could become the country's next multibillion-pound consumer finance scandal. The FCA said it was awaiting a Supreme Court verdict likely due in July on whether to uphold a previous ruling that several such payments were unlawful, which could require a wide-ranging compensation scheme for millions of customers. The FCA said it was setting out the likely scope and considerations of any consumer redress scheme so it could move quickly to implement one if appropriate. Banks including Lloyds Banking Group (LLOY.L), opens new tab, Close Brothers (CBRO.L), opens new tab and Santander UK (SANS_pa.L), opens new tab have together already set aside more than 1.5 billion pounds ($2 billion) to cover potential compensation claims. Some analysts say the fallout could be the costliest for banks since they paid almost 40 billion pounds in compensation to customers for mis-selling payment protection insurance. The FCA said it would try to make a redress scheme comprehensive, swift, and easy for consumers to participate in, without resorting to claims management companies that take chunks of consumers' compensation in fees in return for helping with a claim. It also suggested that some estimates of how much customers might be due have been too high. "We've seen a range of redress rates suggested. This includes some highly speculative figures by some CMCs and law firms," the FCA said. Banks have argued a too-punitive scheme could harm a market that customers rely on to buy cars, and damage Britain's appeal as an investment destination for financial services. ($1 = 0.7378 pounds)
Reuters
21-05-2025
- Business
- Reuters
Close Brothers bolsters capital ratios before landmark motor finance judgment
LONDON, May 21 (Reuters) - Close Brothers' (CBRO.L), opens new tab total capital ratio rose by 80 basis points to 18% in the quarter to the end of April, as it bolstered its finances pending a ruling that may force the bank and others to pay out millions of pounds in redress to motor loan customers. Close and South Africa's FirstRand (FSRJ.J), opens new tab are seeking to overturn a Court of Appeal judgment which said brokers owe a fiduciary duty to customers and must have their fully informed consent to receive a commission from lenders. The ruling has sent shockwaves around the UK banking industry, with several banks facing the prospect of repaying affected customers compensation plus interest. Close said on Wednesday its common equity tier (CET1) capital ratio, which reflects a bank's ability to absorb losses without jeopardising solvency, was 14%. The applicable minimum CET1 and total capital ratio regulatory requirements were 9.7% and 13.7% respectively at April 30. Close also said it expected the CET1 figure to exceed its medium-term target range of 12% to 13% by the end of the financial year. Analysts at KBW said the improved capital position "removed the risk of a capital raise" to cover possible liabilities. KBW has set Close's 'worst case' liability estimate at 460 million pounds. Close shares, which have fallen 57% so far this year, were unchanged in early trading. "We are taking proactive steps to ensure that the group is well positioned to generate strong, sustainable returns once the motor finance commissions uncertainty has been resolved," CEO Mike Morgan said in a statement. "Alongside a stronger capital position, delivering on these priorities will create a more efficient and resilient business, one that delivers greater value for shareholders and continues to support customers, as we have through many cycles." Close and FirstRand have set aside 165 million pounds ($221.61 million) and 140 million pounds, respectively, to cover potential claims, while Lloyds Banking Group (LLOY.L), opens new tab has earmarked 1.15 billion pounds. Santander UK has set aside 290 million pounds and Barclays 95 million pounds. Close said it was on track to deliver annualised cost savings of around 25 million pounds by the end of the 2025 financial year and would update investors on further initiatives to increase savings. ($1 = 0.7445 pounds)
Auto Express
06-05-2025
- Automotive
- Auto Express
Electric car sales are still falling short of ZEV targets
Car registrations in the UK have fallen yet again for the sixth time in seven months, with EV sales still far away from the lofty targets still required by the ZEV Mandate following the conclusion of its review last month. Just over 120,000 new cars hit the road across the UK in April which, according to the Society of Motor Manufacturers and Traders (SMMT), is 10.4 per cent fewer than in the same period last year. Crucially, however, although the popularity of electric cars continues to grow – the number of new examples registered last month was a modest eight per cent up on 2023, at 24,558 – market share still sits at around one in five new cars, which is eight per cent shy of what's required for 2025 by the ZEV mandate. Advertisement - Article continues below By way of explanation, the SMMT points towards the latest changes to VED (Vehicle Excise Duty) road tax in April. These saw electric cars now liable for the yearly charge of £195, as well as the hefty Expensive Car Supplement (also known as the Luxury Car Tax) of £425. Of course, it's not only EVs that were hit by the changes, because tax rises were seen across the board, notably with first-year tax rates seeing a big jump for the most polluting new vehicles. Such a wide-reaching tax increase meant many buyers brought their purchases forward in order to dodge some of the financial burden, but nevertheless the slump in sales is representative of a market full of uncertainty and lacking in support. Skip advert Advertisement - Article continues below The chief executive of the SMMT, Mike Hawes, described the latest figures as 'disappointing, but expected after March's surge.' Such a sentiment was backed up by John Cassidy, the managing director of sales at Close Brothers Ltd – one of the UK's largest car finance brokers and one of the firms caught up within the ongoing car finance scandal. 'Following a record month for electric vehicle registrations, April has proved to be something of a step back to normality in this regard,' Cassidy said. 'Numbers continue to fall well short of the zero emission vehicle mandate targets, and the Government needs to think seriously about how to incentivise uptake of electric vehicles.' Cassidy called for what he described as a 'funding boost for EV charging infrastructure', stating that '57 per cent of motor dealers believe there isn't enough time to improve the infrastructure for the ban to go ahead. Arguably, people are yet to be convinced that the 2030 target isn't unrealistic.' Hawes also called for Government action, noting that 'EV uptake is still being heavily and unsustainably subsidised by the industry, which is why a compelling package of measures from Government is essential if consumers are going to make the switch.' Auto Express has asked the Department for Transport whether it plans to introduce further measures to stimulate the market beyond what was announced at the end of the ZEV consultation, but it refused to comment, simply pointing to the changes it has already laid out. Come and join our WhatsApp channel for the latest car news and reviews... Find a car with the experts Ford Fiesta set to return? Icon could be reborn with a little help from Volkswagen Ford Fiesta set to return? Icon could be reborn with a little help from Volkswagen The Ford Fiesta could be coming back from the dead, and our exclusive image previews how it might look New Renault 4 2025 review: as good as the Renault 5 with the bonus of extra space New Renault 4 2025 review: as good as the Renault 5 with the bonus of extra space The new Renault 4 takes everything that's good about the Renault 5 and adds extra cabin and boot space New 2025 Kia PV5 van starts from a tempting £22,645 New 2025 Kia PV5 van starts from a tempting £22,645 All-new entry into the van market promises competitive pricing and comes with a range of up to 247 miles
Sky News
18-04-2025
- Business
- Sky News
CMC chief Lord Cruddas in £40m raid on broker Winterflood
Lord Cruddas, the former Conservative Party treasurer, is plotting a £40m raid on Winterflood, one of the City's best-known broking franchises, as its parent reels from the crisis engulfing the motor finance sector. Sky News has learnt that CMC Markets, the online financial trading and investment group founded and run by Lord Cruddas, is among a number of parties which have held recent talks with Close Brothers Group about a possible acquisition of Winterflood. Close Brothers, which has set aside £165m for compensating customers who were mis-sold car loans, is said to be working with bankers at UBS on a potential sale of the broker. Founded in 1988 by Brian Winterflood with a team of nearly 40 brokers from County NatWest, the business was acquired by Close Brothers in 1993. Mr Winterflood, who died in 2023 aged 86, was dubbed the "founding father" of London's junior AIM stock market, having established its forerunner, the Unlisted Securities Market. Despite its prominence, Winterflood has struggled recently amid a tough trading environment. Last month, Close Brothers reported in its annual results that "market conditions have remained unfavourable" at Winterflood, posting a £0.8m loss for the unit in the six months to 31 January. Winterflood's trading income fell by 6% to £24m, which it said was partly the result of "subdued investor confidence" in AIM-listed stocks. "With inflation and interest rates moderating, we anticipate a gradual improvement in investor confidence and trading activity," it added. The wider Close Brothers swung to a loss during the same period as a result of the motor finance provision, with the company disproportionately exposed to the crisis - which has gone all the way to the Supreme Court - among British banks. An acquisition of Winterflood by CMC would be a logical bolt-on deal for Lord Cruddas, who has diversified CMC Markets into a broader investment empire in recent years. CMC has a market valuation of just over £650m, with Lord Cruddas holding a majority stake in the company. It recently signed a partnership with Revolut, one of the world's most valuable digital banks, to offer customers trading services using its CMC Markets Connect technology. At one point, the Tory peer explored a break-up of CMC, but is no longer actively doing so. It was unclear on Friday how advanced the talks were between CMC and Close Brothers. People close to Close Brothers said it was not certain that it would offload Winterflood, and would only do so if it could secure an attractive valuation. Close Brothers has already sold its wealth management subsidiary, striking a £167m deal with funds managed by Oaktree Capital Management. Lord Cruddas is not the only possible suitor for Winterflood, with Peel Hunt, the London-listed mid-cap investment bank, also said to be interested in the idea of a deal. Peel Hunt is not thought to have held serious talks about a bid, and it was unclear on Friday how it would finance any deal if it progressed. On Thursday, shares in Close Brothers closed at 295.4p, giving it a market capitalisation of £445m. The stock has slumped by a third over the last year.
