Overview

• Under the FCA’s consultation, lenders face an estimated £8.2 billion in payouts based on about 85% customer participation, rising to roughly £11 billion including implementation costs for agreements from 2007 to 2024.
• Lloyds Banking Group said its £1.2 billion provision is likely insufficient and may require a material increase, with shares falling around 3% after the update.
• Close Brothers signalled a material uplift to its £165 million reserve if the scheme proceeds as proposed, sending its shares down by about 10%.
• Analysts estimate the sector has provisioned only around £2 billion so far, and other lenders including Santander (£295 million) and Barclays (£80 million) are reviewing their positions.
• The FCA says about 44% of 32 million agreements are likely to be deemed unfair, with category-based awards averaging about £700 and a small number of high undisclosed-commission cases potentially eligible for larger remedies; the plan remains under consultation.