Member Info for Garydav2

Qube reduced their short position .

I think we should see an update again on a reduction. Maybe the 221p yesterday was the close out for others . Recovered well off that level.

Not surprised seeing the Sp has dropped from 3.90 to this level in a week.....

Well done anyone who bought in yesterday. This could have a bit of legs as fallen a long way . It's a BUY for me

Has cut target prices for a number of UK-listed banks after this week's landmark ruling on motor finance commissions, saying that the news brings about an increased level of uncertainty and potential downside for lenders.

Last Friday, the Court of Appeal ruled that it was unlawful for motor dealers to receive commission from lenders when providing finance unless it was disclosed to the customer, who needs to give their consent. Banks are now liable to return the commissions to the customer because there was an agency arrangement in place.

RBC said there will likely be a delay in the FCA announcing its findings until next summer, extending a period of uncertainty for UK banks about he potential impact that could be incurred.

"Our impact assessment of this issue had remained largely unchanged for nine months. However, today we update our estimates to reflect the higher uncertainty and potential downside which has been created following last week's Court of Appeal judgement," RBC said.

"Three examples of the many questions which have been left outstanding include: (i) does this decision extend beyond motor finance?; (ii) which years are now in scope?; and (iii) do all of the commissions paid need to be returned to the borrowers?"

For Lloyds, RBC estimates a £3.2bn impact, up from an earlier estimate of £2.5bn, while Barclays could be charged £400m (previously £360m) and Close Brothers could see a £320m bill (previously £250m). The estimated impact on Santander UK and Bank of Ireland have also been increased.

Regarding Lloyds, the broker believes the bank will reduce its 2024 buyback programme to just £1.0bn, compared with an earlier estimate of £2.0bn.

The broker has cut its target price for Lloyds shares to 56p from 60p, keeping a 'sector perform' rating on the stock. The target for Close Brothers ('outperform') has been slashed to 435p from 540p while the target for Barclays ('outperform') has been maintained at 285p.

RBC cuts Close Brothers price target to 435 (540) pence - 'outperform'

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No trade of that size today mate

Another near 30p off the price from yesterday. Peaked around 2.60 yesterday: (

Can't even see trades on that link you sent.

I went on the LSE website and looked at all trades from 4pm and it's not there !

No there's not!!

There's a 71k trade that's it ...

Https://www.autoexpress.co.uk/consumer-news/364820/court-decision-car-finance-commission-threatens-huge-compensation-bills

This states suspension only in days. Will we get an RNS to update?

We will be temporarily pausing the writing of new UK motor finance business while we review and implement any relevant changes to our documentation and processes to ensure compliance with these new requirements.

(From RNS)

So if the lenders like Close and Lloyds have suspended lending for car finance. How long will this be for? It will obviously impact the dealers and banks business . So will they rewrite the T's and C's and recommence in a reasonably short time frame. Or are they all going to hold out for the appeal?

Lloyds is considered the most exposed lender in absolute terms as the owner of Black Horse, the UK’s biggest motor finance provider. It made a £450m provision for potential costs in February.

The lender said on Monday that it was “assessing the potential impact” of the ruling, which “sets a higher bar” for disclosure of DCAs than previously thought.

RBC’s worst-case scenario now estimates a £3.9bn bill for Lloyds, including compensation, interest and administration costs.

That number has increased from a previous estimate of £3.5bn. RBC forecasts a potential £387m hit for Close Brothers, up from £350m.

So as all this is an unknown and the sp action fearing the worst what are holders feelings now?

I mean this share has been battered this year and again since Friday. Do we think it will at least recover a little in the short term

Lloyds have just issued an RNS and have pretty much stated the same as Close Brothers ...

Doesn't sound right deadly and as Close Brothers have said themselves :

Close Brother’s added that it is therefore currently not possible to assess the timing, scope or quantum of any potential financial impact on the group.

Since when did you become an accountant? That's why the shares are falling as at this point in time they do not know their potential payouts .

GLA

£2.30 tomorrow anyone? .....

Deadly this is the important bit:

Close Brothers informed its shareholders that it “disagrees with the court’s extension of the existing case law in this area”. The merchant bank said it would be appealing this decision to the UK Supreme Court.

The bank noted that the financial impact of the Hopcraft case in isolation is not material to the Group.

However, subject to the appeal to the Supreme Court, the judgment may set a precedent for similar claims, which may (depending on the specific facts of those cases) result in significant liabilities for the group.

Close Brother’s added that it is therefore currently not possible to assess the timing, scope or quantum of any potential financial impact on the group.

As a result of the ruling, shares in Close Brothers dropped over 18 per cent on Friday.

Over the last year, the group’s shares have dropped nearly 60 per cent as a result of the news of the motor finance review.

Autumn Budget 2024: All the latest news

Friday 25 October 2024 12:51 pm | Updated: Friday 25 October 2024 3:47 pm

Shares drop at Close Brothers as court sides with consumers in motor finance claims

By:Maria Ward-Brennan

Senior Reporter

Share

In a landmark decision in the motor finance test case, a court has resoundingly sided with consumers against the banks and lenders, including Close Brothers.

The Court of Appeal has ruled that a broker could not lawfully receive a commission from the lender without obtaining the customer’s fully informed consent to the payment.

The court ruled that in order for consent, the consumer would need to be told all material facts that might affect their decision, including the amount of the commission and how it was to be calculated.

The judges ruled that did not happen in any of these cases.

Three cases were merged earlier this year, the Hopcraft case is against merchant banking group Close Brothers, Wrench is against South African Firstrand Bank, and Johnson is against Firstrand Bank and Motonovo Finance.

The claims stem from regional courts around England, with the case against Close Brothers being dismissed by Kingston-upon-Hull Combined Court last year, while the other two are appealing an decisions by County Courts.

The three cases were given the green light in March to appeal the decisions of their respective courts, and all proceeded to one trial at the Court of Appeal in July.

Today, the court revealed it has unanimously allowed all three appeals.

Could go on for years. How can they pay for such large liabilities multiyear? No dividend and ultimately a RI or share holder dilution. Still very over priced considering this news