London, April 6, 2026, 12:11 BST
Lloyds Banking Group is keeping its £1.95 billion motor finance provision unchanged after reviewing Britain’s final redress, or compensation, rules, leaving investors to wait until the bank’s first-quarter statement later this month for any fresh revision. In its latest confirmed update, the lender said it does not currently believe any change to the provision is required. 1
That matters now because Lloyds owns Black Horse, the country’s largest motor finance lender, and the next markers for shareholders are close: the stock goes ex-dividend on April 9 and the bank’s Q1 interim management statement is due on April 29. London’s market is shut on Monday for Easter Monday, leaving last Thursday’s company statement as the latest firm signal from management. 2
The scandal centres on hidden commission and other commercial ties between lenders and dealers that were not properly disclosed to borrowers. The Financial Conduct Authority said its final scheme covers 12.1 million agreements from April 2007 to November 2024, with firms expected to pay about £7.5 billion in redress and total costs estimated at £9.1 billion, down from £11 billion at consultation. 3
Lloyds said uncertainties remained over response rates, operating costs and litigation, and that the ultimate outcome could still shift depending on legal proceedings and complaints. The bank said it would provide a further update with first-quarter results at the end of April. 1
The unchanged reserve drew a split read from analysts. Derren Nathan, head of equity research at Hargreaves Lansdown, said Lloyds “may have set aside more than it needs” and could eventually release about £400 million, while Benjamin Toms, an RBC equity analyst, said a court review of the scheme was “highly likely.” 2
Barclays and Close Brothers are among the other lenders caught in the same clean-up. Reuters reported after the FCA ruling that some firms were still weighing whether they needed to adjust provisions or challenge the scheme, while Close Brothers said it was assessing the implications. 4
For Lloyds, the reserve matters because it cuts across a capital story management has been trying to sell. The bank reported 2025 pretax profit of £6.7 billion in January, lifted its target for return on tangible equity – a common measure of bank profitability – to above 16% for 2026 and announced a £1.75 billion buyback. 5
But the downside case has not gone away. Reuters reported on March 27 that Lloyds was bracing for a lawsuit by more than 30,000 consumers seeking £66 million over mis-sold car loans, and the FCA said it split the compensation plan into pre-2014 and post-2014 schemes partly to stop legal challenges from delaying all payouts. 6
For now, the bank’s message is blunt: the £1.95 billion pot stays put. With London shut on Monday and the next scheduled company update on April 29, investors will have to wait a little longer to see whether Lloyds has reserved too much, too little, or just enough for one of Britain’s biggest consumer finance clean-ups. 1
