Member Info for LIBERTY2

Buyback - resolution has been continuously passed for several years for the company to purchase upto 10% of its shares. CBG has instead opted for dividends, but it has been at higher SP levels which makes sense. This resolution again was included on the voting form for this AGM. So to answer the question - yes they already have the authority from the previous AGM to purchase upto 10% of outstanding shares, and this will be renewed at the AGM this month. I would like to see a buyback program launch, I do not feel they will get much of a better opportunity given the current SP, and the scheme in its extremes can be tested now that they have the bones of it proposed by the FCA - prior to this point they were very much guessing at the extremes. Whether they will or not is a different matter - there is still uncertainty and it cannot be ignored, depends what their internal modelling is telling them.

Liability - well they have broadly implied their liability to the scheme in its current form with the provision. Whether they will provide specifics to the market, I don't know. They will clearly have different scenarios modelled internally accounting for adjustments to the scheme as you suggest, don't know that these would be made public currently given their conservative track record. I don't believe the majority of the PIs would know what to do with the information regardless and it just leaves the door open to the big boys playing with it, or the FCA scheme makers utilising it to their favour.

Who knows - as always, time will tell. Enjoy the show.

From a more simplistic micro standpoint, CBG has far higher relative exposure to the motor finance saga than STB.

Current STB provision is £21m, which accounts for around 6% of equity. Current CBG provision is £300m which accounts for around 17% of equity. These are broad calculations just to give a perspective on why CBG is underperforming others in the sector.

Like I have said previously, it was this reality which allowed the SP to reach around 0.2 of book value 12 months ago, and created a fantastic opportunity for investors.

I do not know the indepth details of STB business. I know they are a far smaller bank, which makes a lot less money in real cash terms, and have a lot less cash and asset on book, than CBG. They are still trading at a surpessed level, around 0.5 of book.

Both have the prospects of a very strong relief rally if the scheme is refined, or perhaps simply confirmed, removing uncertainty. I feel CBG has more legs for SP appreciation given its strong asset base, earnings record, history, size, and current price.

Https://www.lse.co.uk/news/LLOY/press-motor-finance-firms-seek-intervention-to-limit-compensation-p14ntz0wb7315ax.html

Redress scheme*

Indeed - without manufacturing a distinction, which the FCA has, there is no difference between the commercial practice of the lender / dealer making as much money as possible on the finance, as there is for the dealer making as much money as possible on the vehicle sale.

Where does this stop? Will they be coming to the car dealers with a rebate scheme because they did not explicitly inform the consumer they made a profit on the vehicle itself, or because the FCA deems the dealer made ‘too much’ profit from said vehicle?

We become more socialist by the day. Absurd situation.

Firstly - I am not invested in VANQ, I have a position in CBG and monitor other lenders motor redress commentary.

The motor finance provision has more than likely dented optimism, to answer the question on the SP performance this week. Vanquis has held the position of having no exposure to the issue for a long time, now they are advising shareholders that if the scheme is implemented in its current form they expect a cost of £7m, enough to take out the majority of the years forecasted profit.

Never going to be received well by the market, but on balance the scheme will likely be reined in and hopefully Vanquis can keep to their current modest provisions.

Lots of conversation around the FCA scheme can be found on the CBG page, if any VANQ holders have taken a renewed interest in the matter.

All the best.

Interesting theory Jperry.

When I saw the 'emergency pre-budget conference' the other day, I took away to the impression that the banks were going to avoid being hit with the an additional levy, as has been rumoured this morning. It was very much leaning on 'unpopular choices', 'all having to contribute' - shes coming for the average Joe. Do not think this levy would have had a direct impact on CBG regardless due to their size, but it will aid the overall sectors investability and index linked movements.

It does lean into a pro-growth stance coming into the budget, which may support your theory.

Extended Consultation period - as suggested by Rathi on yesterdays ML show. Suggests some robust discussions on both sides of the spectrum are on-going, as one would expect. The lenders will be presenting in-depth legal basis for the rejection of the proposed scheme. The 'consumer side' will be arguing it should be interest rate of circa 7% - this seems to broadly be their only disagreement with the current scheme. I can hazard an educated guess at which objection is taking longer for the FCA to run analysis on and compute likely outcomes of a future Judicial Review, in the event that unfolds.

Courmac sponsored APPG - not much to say other than comical, where 'conflict of interest' would be a gross-understatement. You can't blame them, they will be exposed to the tune of millions of £'s from the run-up to this scheme through advertising, processing, data analysis etc. All funded by Eram Capital - who will be seeking their investment return. Its just business, they've worked an angle, let them crack on. I have no doubt the multi-billion pound lenders will have similar reports proving the exact opposite conclusion, with support from Parliamentary members such as in the Lords.

"There are three kinds of lies: lies, damned lies, and statistics"

In the meantime - this 'gap fill' is proving fascinating. As somebody who is not a chart follower, very interesting to see these dynamics play out.

It can't be forgotten why CBG is trading at these sort of levels. If the scheme is implemented in its current form (this is the status-quo currently for the market), then its possible there will be an additional provision of some description (CBG probability-weighted estimate). If it is reined-in modestly, the £300m will likely suffice. If there is a fundamental over-turning of the scheme or large portions of it, then the original £165m or less may be accurate. As this paragraph shows, there is still a vast amount of uncertainty and therefore difficulty for the market to value correctly. Not forgetting that the business is also at the tail-end of a messy reorganisation period and at the start of an improvement phase for returns.

Why CBG is 'fairing worse' in this uncertainty period - same reason as it has always been throughout. Relatively smaller bank with higher proportionate exposure.

It was this reality which gave the opportunity to buy it at a 30 year low a few months ago. Its the human mistake of expecting the direction of a SP to change simply because we now own it - take the good with the bad, and have some patience. Time is what moves it.

Don't get me wrong - as a holder with an eye on 5 years, I fully expect a higher SP based on the current fundmentals of the business, but I can understand and accept why that is not today. It doesn't matter to me either as I don't intend on selling today, or at £5 / £6 / £7.

On with the show - been a very interesting experience for the past 12 months.

Martin Lewis show; nothing new to speak of. Strongly anti-CMC. Suggestion from FCA that the consultation period will be extended. Lewis believes the scheme will be modestly adapted to pass but not significantly, he then goes on to suggest Judicial Review in that event is possible.

Rathi noted ‘hundreds’ of public feedback emails received so far - I would get those sent in.

Needless to say, given the platform, no pressing details around the legal basis of the scheme were pressed.

Throughout this process the FCA has quoted public engagement / comments several times. I do believe that they will be tallying public 'fors and againsts' from the Consultation period in a ruidmentary fashion in order to, in some part, justify whatever conclusion they draw. I agree public input will have limited effect on the outcome, but for the sake of a well rounded fact-based email, why not.

I do not believe a scheme will be implemented this year. If they did, they would would come up against a further argument as to why they have chosen the BofE rate plus 1. The FOS will be implementing this rate as their standard from Jan 1st 2026 - I believe they are aligning these to give justification.

Cp25-27@fca.org.uk

I would strongly suggest providing feedback to the FCA on the proposed scheme with details about agreement / disagreement of it or various elements. This feedback must be received by 18th November.

You can also email them on the same address today (4th Nov) to suggest they extend the deadline for firms responding to claims. It would benefit the lenders for this to be extended into 2026 - which I think will happen.

Nikhil Rathi will be encouraging the average Joe car buyers to provide feedback tonight.

Whats interesting to witness here is the immense pressures and scrutiny building on the FCA from all sides of the spectrum. I wonder how many times the phrase 'we should never have started this' has been muttered, sighed or screamed in the FCA HQ over the past 24 months.

The regulator has fundamentally failed here and its becoming more apparent by the day with the information which surfaces. Systematic failures of regulatory over-sight dating back many years which ends in this mess of their own creation. Now under attack from consumers, lenders, CMCs, trade bodies, Gov, international investors etc etc. Its unbelievable.

I am starting to wonder what an industry wide revolt looks like and a total rejection of their authority as a regulator.

Ah yes, more sensationalist left leaning journo articles to start the day. Quote Guardian article:

‘’That was at the expense of car loan victims who they said were due up to £15.6bn, rather than the £8.2bn-£9.7bn currently forecast in the FCA’s scheme, which the APPG said was based on estimates produced by the regulator in 2019.’’

Another stake through the heart of the scheme in court - publicly available estimates provided by the FCA in 2019 which now time-bars those cases related to it? Plausible entrapment that the industry was allowed to continue under the same permitted practices for a further 5 years. *credit Knot following Lords meeting*

Great that all of this info is being published in writing and discussed in Parliament, indisputable proof for the lenders.

Looking at the opposing points being made on balance, you have the consumer side who is simply complaining that interest rate is 5% lower than they think it should be. Where as you have the banks stating clear legal precedent that 80% of the scheme as a whole is fundamentally flawed.

The direction this needs to move to reach an agreeable conclusion is clear.

Quote from Guardian article:

''Claims law firms and consumer groups say borrowers should be offered the same terms as Marcus Johnson: the sole driver whose case was upheld by the supreme court in a landmark case in August.''

And by that notion of demanding parity from the SC judgement, all of the other contracts which fall into the Hopcraft and Wrench bucket (vast majority of the 14 million currently in scope), should not be penalised under a redress scheme. Brainless comments by toothless organisations.

As predicted, nothing of substance is likely to surface until late December / early 2026, whenever the FCA publish a potential scheme - just going to be stuck with sensationalist journo articles and posturing from both sides in the meantime.

Will be tuning in for the AGM later this month.

As has been stated, we are in another period of uncertainty, thats all.

If using your comparison of Oct / Nov 2024 to today, uncertainty still exists as it did then, albeit it has been significantly narrowed post SC ruling and following FCA putting some numbers on this at 25% of the potential '£44bn' estimate following the CoA.

Lets not overlook the major difference between CBG SP in that 12 month window you are quoting, a circa 100% increase in share price... so yes we may be going side-ways, up, down, for a period until further clarity materialises but a shareholder holding from 12 months ago cannot be dissapointed. From my perspective, uncertainty was what allowed me the opportunity to buy CBG at 30 year low a few months ago - just make use of it.

Patience my friends, patience.

Ah yes, the abundantly contradicted Financial Chaos Authority.

Consumer champions for those who willingly transacted a commercially fair deal 20 years ago, but actively removing visibility for the private investor, plausibly creating difficulty in making an informed investment decision.

Logic, logic, logic.

Manfor - just for conversation sake on a Monday morning; whats caused the significant shift in your investment case for CBG, from aggresively stating it could not be worth more than £4.50 and criticising other posters for giving price predictions, to now giving price predictions and suggestings it has to be worth £7?

Makes no difference to me, just interested to understand the physchology of it from your perspective. Perhaps this is just what PI's do on these platforms when they want to buy a stock thinking their comments have any bearing on a share 87% owned by II's, then the rhetoric shifts once they own said stock. Who knows - interesting nonetheless.

£33m provision in the recent accounts - it was related to how they historically settled early repayment accounts. So when a customer who has a 5 year term on a deal, called up CBG and settled the deal in year 3 for example, CBG will compute a settlement figure. I am assuming the provision is related to this computation method, and I would assume its something to do with how much interest was charged for the period which the loan was cut short by, i.e. they may have charged a 10% early repayment fee for on the 2 year term balance. Perhaps this was found to be unfair amidst the mass scrutiny on their practices either internally or externally.

You can guarantee if CBG are provisioning for it, others will too. They all shared the same practices as we have seen.

I was disappointed to see it in the accounts and it will have played into the ‘what next’ mindset for investors. It was worded as a definitive pro-active provision so I trust it is final.

Very coincidentally as I read that analogy I am watching a program on the downfall of the Third Reich. Very fitting.

Who is more up for the battle may guide the process for the next few months. I am betting the multi-billion pound boys who have been pushed into a corner will forcibly move this to a logical conclusion.

Yes - called a Leapfrog Appeal. If granted, it would go straight from High Court to Supreme Court, missing the CoA.

Has precedent in cases of great public interest, and ones which are time-senstive. I would suggest this is one of those cases.

I have done some brief research on this - both parties need to consent (Lenders and FCA) to a Leapfrog of the CoA. I would sway to the side of the FCA not agreeing to this in that event, as once at the SC they are in dangerous territory of a scheme being found illegal by the highest court in a very definitive way, or having their future redress powers trimmed from the current status-quo - as would have potentially been the case if Bluecrest had succeeded at the SC.

If it went through the CoA first, the FCA could take a view on their chances and look to negotiate a settlement prior to a very definitive public failing and power curbing verdict, if they thought thats the way it was headed.

As I say, all very hypothetical, interesting to discuss, but only time will tell the path it takes.