UK's Close Bros expects potential motor finance redress claims to hit 2025 guidance
Adds background in paragraphs 3-4, CET1 details in pargraph 5-6
Nov 21 (Reuters) -Close Brothers Group CBRO.L flagged a hit to its 2025 forecast on Thursday and said it expects to fully resume its motor finance lending business soon, as the British lender assessed the impact of a recent ruling on car loan commissions.
The UK's Financial Conduct Authority (FCA) has been pressing the Supreme Court to expedite a decision to permit lenders to appeal a crucial judgement that may pave the way for a $21 billion consumer redress scheme linked to motor finance commissions.
The FCA said on Thursday that it is seeking feedback on proposals to give lenders more time to handle complaints on non-discretionary motor finance commissions.
The ruling appears to have widened the scope of possible cases of mis-selling that could come under review, analysts say, making it harder to predict the full cost of compensation and creating more uncertainty for banks.
The company said it remains confident that its CET1 capital ratio guidance, a key measure of financial strength for lenders, will be between 14% and 15% at the end of financial year 2025 in July next year, excluding any potential redress or provision for motor finance redress claims.
It disclosed a CET1 ratio of 13.2% as of October-end.
Reporting by Yamini Kalia in Bengaluru; Editing by Rashmi Aich
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