LONDON, April 27, 2026, 12:07 BST
- The UK motor-finance trade body has decided against contesting the FCA’s £9.1 billion redress plan, removing a potential hurdle for Barclays ahead of its results on Tuesday.
- Barclays won’t contest the scheme—just like Lloyds, Santander, and Close Brothers, the bank is steering clear of legal fights.
- The bank continued its share repurchases, revealing last week it had bought back roughly £116 million worth of stock for cancellation.
Barclays PLC approaches its first-quarter earnings with a clearer path, now that the industry’s main trade body has scrapped its opposition to the regulator’s £9.1 billion compensation plan tied to the costly UK motor-finance scandal.
Timing is key here. Barclays will release its Q1 numbers on Tuesday at 7:00 a.m. UK time. Investors want clarity on provisions, capital returns, and if those 2026-2028 goals are still standing.
The Finance & Leasing Association isn’t pushing back against the Financial Conduct Authority’s plan, though it says concerns remain. The programme sets out a redress scheme for borrowers who weren’t fully informed about commissions or the relationships between car dealers and lenders in motor-finance deals—a structured process to deliver compensation.
Barclays opted against launching legal proceedings, according to a Sky News report on Friday, putting it in line with Lloyds Banking Group, Santander and Close Brothers. The issue isn’t closed, but with fewer major players heading to court, the threat of a sweeping sector battle right ahead of UK banks’ earnings season has faded.
The FCA puts the number of eligible agreements signed from 2007 to 2024 at roughly 12.1 million. If three-quarters of those customers end up claiming, the regulator figures redress could total £7.5 billion. Average payout per agreement comes in at about £830.
“We’ve listened to feedback to make sure the scheme is fair for consumers and proportionate for firms,” said FCA Chief Executive Nikhil Rathi as the final plan went public. “It will put £7.5 billion back into people’s pockets.” FCA
Barclays faces a headache here, though it’s not overwhelming. The lender lifted its motor-finance provision sharply to £325 million, up from £90 million in October. That £235 million jump, Barclays said, will shave roughly 5 basis points off its common equity tier one ratio, a key regulatory capital measure.
Barclays is sticking to its capital-return plan. On Monday, the bank reported it bought back 26.8 million ordinary shares for cancellation during April 20-24. That brings total repurchases to 190.8 million shares since launching the buyback on Feb. 10.
The programme forms part of Chief Executive C.S. Venkatakrishnan’s broader drive to boost returns. Back in February, Barclays reported a 2025 pretax profit of £9.1 billion. Return on tangible equity — the bank’s preferred metric, which strips out intangible assets — hit 11.3%. For 2028, the target is set higher: above 14%.
Shares rose 1.1% to 428.80 pence as of 11:52 BST, based on delayed LSEG data tracked by Investors Chronicle. The uptick was slight; however, investors were clearer on the legal outlook for motor finance.
Risk remains, and not on a minor scale. Consumer Voice is gearing up for a legal challenge. Russ Mould, investment director at AJ Bell, told City A.M. that lenders face potential “gridlock” if any delay, reversal of the scheme, or increased provisions comes into play. City AM
The competitive picture is murky. Lloyds—parent of Black Horse—has heavier UK motor finance exposure than Barclays. Santander and Close Brothers are on the hook for compensation, too. Barclays got out of motor-finance lending back in 2019, trimming future risk, yet its legacy book still drags conduct costs into focus each earnings call.
