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"I'm puzzled as to why it's been in the doldrums ..."

I'll have a go, and someone can tell me if I'm wrong. As far as I can see CBG is the only bank with 'adjusted eps (continuing operations)' lower in 2026 than 2025.

So, forget about the car finance shenanigans ... CBG is the only bank not growing EPS in 2026.

OK, things will start to improve from 2027 (and at a much faster rate than other banks) - but no one seems to be giving credit for that right now unless and until the Board make some beefy statements about 2027 along with the final results.

From the FT ...

Lloyds will not take legal action against UK’s £9bn car finance redress scheme. Britain’s largest provider of vehicle loans wants to draw a line under scandal that rocked the sector.

The talk has all been about the car finance provision but it's time for other things coming into focus. CBG is in a transition under Mike Morgan - part of which is cost cutting and the other is to rebuild growth in Commercial, Retail and Property. AOP in all 3 divisions was down at the interims vs last year and is expected to start to grow from next year. Work still to be done.

Perhaps some institutional investors want to see growth starting to happen before buying in further? If the plan succeeds then it's seriously undervalued at such a low PBV.

Is there also a difference in that First Rand seem to have declared a worst case provision (for the purpose of having a shock effect) whereas CBG have consistently made a probability weighted provision?

In October we saw that CBG's provision depends "on the outcome of the consultation and any further legal, regulatory or industry developments". So it's a blended calculation and the end payout will be higher or lower depending on how events unfold.

So perhaps CBG will wait until a judicial review is officially declared - and understand which aspects are being challenged - and study the legal challenges from the opposite side also - to then issue another probability weighted provision?

It seems to be their style, to the frustration of some. That's just my guess though.

Thanks for you comments Liberty2. You say "It depends how optimistic or conservative CBG have been with ‘probability weighting’" ... and as such it certainly leaves me a bit in the dark. A more useful RNS would state the estimated liability based on the scheme as written and the (lower) provision to be made in the accounts based on probability weighting of the various outcomes. Too much to hope for I guess.

You can rest assured that it's not legal rubbish.

No change to the provision for Lloyd's ... and no comment about legality or otherwise. Don't want to read too much into that, but could it be that they are ready to move on?

No idea how this will pan out now. I was hoping for a 'let's agree and move on' outcome but let's see.

Hopefully CBG will issue a RNS very soon with an asessment of the implications of the scheme that will reassure investors. We need them to be more helpful with the communications.

Looking back, I think the FCA should have done more to stem the feeding frenzy (look guys, another PPI ... ) that was allowed / encouraged ... but the Covid fiasco was a watershed for that sort of mentality and now this attitude is seen everywhere with compensation expectations and government handouts demanded for anything and everything.

Monday for the announcement - desperately trying one last weekend to reach consensus even if it looks a lost cause. If agreement isn't reached and the circus drags on for another year then there will be no winners. And the FCA will rightly be accused of having mismanaged this activity from start to finish.

From a press release ... "The pro forma solvency 11 coverage ratio declined to 210% compared to 232% a year ago, and below 221% consensus.

Analysts at RBC Capital Markets called this a "significant" miss reflecting higher capital strain, 'other variances', and M&A-related impacts."

What I don't understand is how there was this miscommunication with analysts. Surely the reduction in coverage ratio was planned by LGEN, and if so why was it not signalled in advance (ie how come the consensus was so far off?). Isn't it someone's job to make sure the brokers are not surprised when the results come out?

What's the alternative to a redress scheme? Even if it's a redress scheme that neither lenders nor 'consumer champions' like.

And would the absence of a redress scheme be more costly? There's a economic benefit to the lenders putting the whole fiasco behind them and getting on with their day job. And perhaps even from a total cost (payout and implementation)?

If the redress scheme (that nobody likes) adds another £Xmillion to the compensation reserve - but allows CBG to talk about the future business and plans to get to double digit RoTE by 2028, start buybacks, pay dividends etc ... anything but having to drag this out for another year or two. As long as X is manageable of course. £300 million is already reserved - would £350 million be a disaster at this stage?

Isn't this what the FCA are saying, and most likely discussing behind closed doors? If we can't all agree by end of March without fear of legal action then we will not propose a redress scheme - and we will blame everyone else except the FCA (of course).

Is that possible? I keep thinking about the "If we proceed with a scheme" announcement.

It is a bizarre statement, the only sense is perhaps as some kind of warning to both sides to compromise and accept what will be proposed. Saying that this will be the lowest cost route - avoiding lengthy and costly implementation. Just agree, pay up and move on etc. It's pretty desperate stuff.

Great letter, keep up the pressure.

FCA should not be allowed to bully and bluster their way into creating a blanket redress scheme, which seems like a crazy Covid style (free money for all) arrangement.

Did we not learn anything?

Thinking about the Prelims on 23/9. Regarding the £165 million provision - I expect something similar to what STB said mid August "There remains continued uncertainty as to the eventual cost for impacted firms. As a result, the Group has retained its remaining provision for potential redress and operational costs"

And most likely the discussions with FCA et al could continue into 2026, so the Board (quite rightly) will not make much comment or commit to any changes until there's far more clarity.

Same goes for dividends or buybacks, maybe some news second half of 2026. Patience required as always.

20th August ... https://www.osb.co.uk/investors/financial-calendar

Do the FCA not know the regulatory remit ?

Indeed. And with half the costs eaten up by admin, legal fees and the like ... what an incredible waste of money. Not to mention the fact that the biggest cost to CBG and others has been the distraction away from their core business of lending and assisting in the growth of UK plc.

Any redress scheme that ignores the substance of the SC ruling is just going to end up in court. The banks will point this out to the FCA and the FCA’s going to end up looking like idiots.

The FCA certainly have an issue or two. Why did the FCA write the announcement in that way? Why mention any financial sum? Why not just a more considered announcement ... that in light of the SC decision they will consult on a compensation scheme, with the expected timings etc etc.

Looks like headline seeking rather than acting in the professional manner that you'd expect of a serious regulatory body. It's also a tad disrespectful to the people that you'll consult with.

The UK media are bad enough as it is without being fed this '£9bn to £18bn' sort of stuff ... that will be used solely for their own means - to grab more eyeballs. It also started a lot of unhelpful discussion on this chat board for sure.

Share price Monday = 25% chance - £3 / 50% - £5 / 25% - £6 That'll be £4.75 thank you very much.

Day 3 summary from MILS - https://www.mils.co.uk/news/johnson-v-firstrand-bank-ltd-wrench-v-firstrand-bank-ltd-and-hopcraft-v-close-brothers-ltd-day-three/

In Conclusion

After consideration of all three days, it is our opinion that this case could go either way. Whilst uncomfortable and extreme, Johnson, Wrench and Hopcraft's interpretation of case law and its application to the motor dealer relationship is capable of resulting in a fiduciary relationship being applied. If this is the case, the only way a dealer could have received commissions fairly would have been through informed consent, likely requiring the existence and amount of any commission to be expressly disclosed.

That said, there are some significant difficulties with this approach, not least of which is that all the case law refers to a traditional finance broker role who is not providing any goods. This is a significant factor. After considering the representations and the Court’s approach throughout, we are cautiously optimistic that a fiduciary duty is unlikely.

Most dealers may however still face a duty to provide disinterested advice which would need to be justified on a case-by-case basis. In this scenario we would likely have an FCA redress scheme whereby disclosure of the existence of commission could be all that would be needed to defend against any wrongdoing.

The greatest potential for an upset remains in how the Supreme Court engages with Plevin and the potential for an unfair relationship under s140A.

Either way, as the court has indicated that a judgement may be handed down as early as July, watch this space and we will keep you informed.

Pretty much as expected. Winterflood continues to tread water, and the fees and costs associated with administering the car finance fiasco are eye wateringly high. But the message is that it's all under control and manageable ... subject to etc etc And there's clearly a desire to return to dividends as soon as possible.

So it's £165m including legal costs. Which is presumably based on a 'most likely outcome' scenario.

Of course there are the usual caveats that you'd expect from a bank that's been around since 1878, but the ongoing business is solid and the bank is well financed and sensibly prudent.

It's a buy for me.