No additional injury for Lloyds as its motor finance scandal compensations invoice stays at £2bn

Lloyds yesterday said the estimated cost of compensating motorists ripped off in a motor finance scandal would remain unchanged at £1.95billion.

That means the lender has avoided further damage at the hands of the Financial Conduct Authority (FCA), which set out final rules of the compensation scheme this week.

Lloyds has so far set aside the largest amount to cover the scandal, where car dealers were given commissions by lenders to sell loans to customers.

Under the FCA’s final plans, 12.1m mis-sold deals will trigger typical compensation of £829 each. 

It means the overall expected cost for lenders will now be £9.1bn, down from an earlier estimate of £11billion.

Santander budgeted for a £478million hit and Barclays for £325million, while Close Brothers has set aside £300million before the FCA’s latest ruling.

Compensation: Lloyds has so far set aside the largest amount to cover the motor finance scandal, where car dealers were given commissions to sell loans to customers

Lloyds does not believe any change to its provision is needed. But it added that there ‘remain a number of uncertainties’. 

It may also face a legal claim on behalf of around 30,000 customers, seeking some £66million.