8:28 am, February 20, 2025
Lloyds has almost tripled the amount of money it has assigned to handling the car finance crisis as the potential impact of the scandal continues to grow.
The banking giant has ring-fenced an additional £700m to deal with the situation, having already put aside £450m last year.
The extra funds takes the bank’s total provision to an eye-watering £1.2bn ahead of Close Brothers’ Supreme Court appeal later in the year.
Bosses say the decision to assign the additional cash was taken in response to last year’s landmark Court of Appeal decision against Close Brothers
The group has been openly critical of that ruling, with boss Charlie Nunn saying it had created an investability problem’ for the UK.
Nunn also welcomed Rachel Reeves’ proposed intervention into the case, which has since been rejected by the Supreme Court.
Lloyds is among the most exposed lenders to the scandal, through its ownership of one of the UK’s biggest finance providers, Black Horse.
It has made the decision to give more funds despite its profits taking a significant hit in its latest set of annual accounts.
The results show that Lloyds reported a pre-tax profit of £6bn for 2024, a fifth lower than the £7.5bn generated the prior year, and coming in below analysts’ expectations.
The decline was driven by lower total income for the group, higher business expenses and the higher impairment charge.
The documents also directly addressed the impact of the commissions scandal, with the bank saying that ‘clearly significant uncertainty remains around the final financial impact’.
