LONDON, April 27, 2026, 12:07 BST
- The UK motor- finance trade body said it would not challenge the FCA’s £9.1 billion redress scheme, easing one uncertainty for Barclays before Tuesday’s results.
- Barclays has chosen not to challenge the scheme, joining Lloyds, Santander and Close Brothers in stepping back from court action.
- The bank separately kept buying back stock, disclosing about £116 million of share purchases for cancellation last week.
Barclays PLC heads into its first-quarter results with a cleaner route through a costly UK motor-finance scandal after the industry’s main trade body abandoned plans to challenge the regulator’s £9.1 billion compensation scheme.
The timing matters. Barclays is due to report Q1 results on Tuesday at 7:00 a.m. UK time, with investors looking for signs on provisions, capital returns and whether the bank can keep its 2026-2028 targets intact.
The Finance & Leasing Association said it still had concerns about the Financial Conduct Authority’s programme, but would not challenge it. The scheme is intended to compensate customers who were not properly told about commissions and links between car dealers and lenders on motor-finance deals, a redress scheme meaning a structured payout process for affected borrowers.
Barclays had already decided not to take legal action, Sky News reported on Friday, joining Lloyds Banking Group, Santander and Close Brothers. That does not end the matter, but it lowers the risk of a broad industry fight just before earnings season for the UK banks.
The FCA says about 12.1 million agreements made between 2007 and 2024 are eligible. Average compensation is expected to be around £830 per agreement, and the regulator estimates £7.5 billion in redress if 75% of eligible customers claim.
“We’ve listened to feedback to make sure the scheme is fair for consumers and proportionate for firms,” FCA Chief Executive Nikhil Rathi said when the final plan was set out. “It will put £7.5 billion back into people’s pockets.” FCA
For Barclays, the issue is manageable but not trivial. The bank increased its motor-finance provision to £325 million from £90 million last October, saying the extra £235 million charge would cut its common equity tier one ratio — a core capital cushion watched by regulators — by about 5 basis points.
The bank has also kept pressing its capital-return message. Barclays said on Monday it bought 26.8 million ordinary shares between April 20 and April 24 for cancellation, and had repurchased 190.8 million shares since the buyback programme announced on Feb. 10.
That programme sits inside a wider push by Chief Executive C.S. Venkatakrishnan to lift returns. In February, Barclays said 2025 pretax profit rose to £9.1 billion, return on tangible equity — profit measured against shareholder capital excluding intangible assets — reached 11.3%, and the bank was targeting more than 14% by 2028.
Shares were up 1.1% at 428.80 pence at 11:52 BST, according to delayed LSEG data shown by Investors Chronicle. The move was modest, but it came as investors had a firmer view of the legal path on motor finance.
There is still a risk paragraph, and it is not small. Consumer Voice has said it is preparing a challenge, and Russ Mould, investment director at AJ Bell, told City A.M. that lenders could be left in “gridlock” if implementation is delayed, the scheme is overturned or provisions have to be raised. City AM
The competitive read is mixed. Lloyds, which owns Black Horse, is more exposed to UK motor finance than Barclays, while Santander and Close Brothers also face compensation costs. Barclays exited motor-finance lending in 2019, which limits its forward exposure, but the historic book is still enough to keep conduct costs on the earnings call agenda.
