London, June 11, 2026, 11:01 (BST)
- Lloyds was trading 1.2% higher at 98.38p as of 10:57 BST. The shares ended lower on Wednesday.
- The FCA’s motor-finance redress payouts are now not likely before 2027, with the timetable pushed back as legal challenges to the regulator’s plan continue.
- Lloyds kept up its buyback program, picking up 5 million shares for cancellation on June 10.
Lloyds Banking Group shares climbed in London on Thursday, recouping some losses from the last session. Investors are still looking at buybacks while waiting for more information on the UK motor-finance compensation bill. The stock was up 1.19% at 98.38p as of 10:57 BST. Barclays and NatWest also traded higher as UK bank stocks moved up.
Lloyds has told investors it will look at extra capital returns twice a year starting mid-2026. These capital distributions, usually dividends or buybacks, are cash paid back to shareholders. The bank says it still aims to bring its common equity tier 1 ratio, an important measure of capital strength, down to about 13.0% by the end of 2026. CEO Charlie Nunn said with the Q1 results that Lloyds was “confident in our delivery for the year ahead” and had stuck to its 2026 targets. Lloyds Banking Group
The Financial Conduct Authority’s motor-finance redress scheme is the overhang here. The regulator links the issue to commission deals between lenders and car dealers from 2007 to 2024, saying these may have led borrowers to pay more in interest on car loans. Legal challenges from Volkswagen Financial Services, Mercedes-Benz Financial Services, Crédit Agricole Auto Finance, and Consumer Voice will push back payouts, Reuters said this week. Most of the sector—Lloyds, Barclays, Santander, and Close Brothers—did not contest the scheme.
FCA Chief Executive Nikhil Rathi told parliament’s Treasury Committee that “payments through the scheme which were scheduled to start this year will now be delayed.” The FCA now sees the legal case not likely to be heard before October 2026. If the scheme stands, payouts would begin in 2027. If the scheme is rewritten, compensation could come in late 2027 or early 2028.
Rathi signaled firms can act before cases are closed. “Some firms have also said they want to resolve these liabilities now,” he wrote. The FCA would try to help, “in a way that is fair, transparent and consistent for consumers.” Investors may look for signs of voluntary settlements to clear up uncertainty, as long as those deals do not bring more problems.
TechStock² put it clearly in the article linked above: “Legal uncertainty could make provisioning unpredictable.” The site also said investors are watching buybacks and cash returns as the motor-finance schedule slides. TechStock²
Lloyds went on with its buyback, picking up 5 million ordinary shares on June 10, according to a filing. The bank bought the stock from Goldman Sachs International, paying between 96.58p and 98.22p, with a volume-weighted average at 97.4734p. Lloyds will cancel the shares, it said.
Lloyds is buying shares as part of its £1.75 billion buyback that started this year. A buyback can lift earnings per share by cutting the share count, but does not change the group’s legal or regulatory exposure.
Lloyds gave a governance update Tuesday, saying Danuta Gray will join its board on July 1. Gray chairs Croda and is a non-exec at Burberry, and will also chair Scottish Widows Group. The move isn’t behind the stock’s action, but brings more insurance-board background as Lloyds looks to grow beyond basic retail banking.
The risk hasn’t gone away. FCA Deputy Chief Executive Sarah Pritchard told MPs the legal battle “had consequences.” The regulator said using a complaints process instead of a central scheme could add over £6 billion for lenders and stretch out for three years. Lloyds could see higher costs, bigger provisions, or less cash for distributions. The Guardian
Lloyds’ next key update comes at its half-year results on July 30, with investors expected to question leaders on capital returns, motor-finance assumptions and what the next strategy will look like. In the meantime, the shares are moving more on the pace of buybacks against the unfolding redress timeline than on new earnings numbers.
