Lloyds boss ‘concerned’ with motor finance impact on UK investability
The boss of Lloyds Banking Group told has lawmakers there was a “deeply important” investability issue in the financial watchdog’s proposed motor finance redress scheme.
Charlie Nunn said, in a session with the House of Lords Financial Services Regulation Committee on Wednesday, he was “concerned” about investability and sentiment towards the UK following the regulator’s redress.
“Having a scheme like this, that can take away more than 20 years of profitability from the sector, is a really difficult issue for both global companies looking to invest in the UK – and for that matter my investors looking to invest in financial services,” Nunn said.
His remarks came just hours after the Financial Conduct Authority (FCA) extended the deadline for its consultation on the redress programme following mounting backlash from lenders.
Nunn said: “There is a deeply important investability issue for the UK coming out of this.”
Lord Forsyth, chair of the committee, pressed the banking chief whether he was “aggrieved” after “operating with the rule book by the regulator and now find yourself having to make these huge provisions does that not cause you concern?”
The bank boss said his concern laid with “overall investability and sentiment around the UK – broadly based and then with financial services”.
FCA faces accusations of favouring lenders
Lloyds – which owns the UK’s largest motor finance lender Black Horse – raised its provisions to £2bn last month after the FCA outlined further details on its £11bn car mis-selling scheme.
The lender’s share price rose following the provision is up over five per cent in the last month.
FTSE 250 lender Close Brothers near-doubled provisions to £300m and Barclays almost quadrupled to £325m.
Across the industry banking giants took a swing at the regulator for a scheme they branded “disproportionate”.
But the watchdog has also faced accusations of favouring lenders from the the All-Party Parliamentary Group () on Fair Banking.
The group accused the regulator of being “influenced by the profit margins of the lenders” with its analysis showing a “£4.4bn gap” in the scheme.
As it announced its consultation extension on Wedesnday, the FCA said: “It’s important we receive as much evidence as possible on specific concerns through the consultation as well as alternative suggestions if respondents don’t agree with our proposals.
“We’ll consider all the evidence and ideas received before taking final decisions.”