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Close Brothers Reports £103.8 Million Loss Linked to Motor Finance Scandal

The lender has set aside £165 million for potential legal and compensation costs as the Supreme Court prepares to hear an appeal in April.

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Close Brothers said there was still “significant uncertainty” over possible compensation costs

Overview

  • Close Brothers posted a £103.8 million pre-tax loss for the six months ending January 31, 2025, impacted by provisions for the motor finance commission scandal.
  • The company has allocated £165 million to address potential compensation and legal costs tied to allegations of hidden commission payments in car loans.
  • The Financial Conduct Authority is considering an industry-wide compensation scheme, pending the Supreme Court's decision on the legality of commission practices.
  • Cost-cutting measures include reducing the workforce, consolidating office space, and increasing annual savings targets to £25 million.
  • Shares in Close Brothers have dropped 70% over three years, reflecting investor concerns about the financial fallout from the mis-selling scandal.