Member Info for LIBERTY2

If using the Lloyds provision as a measuring stick, it is a 70% increase from their initial £1.15bn to £1.95bn. Under the same calcs CBG total would be £280m approx.

Too many variables to ascertain if this would be accurate, such as was Lloyds provision realistic initially, lender specific exposure to the scheme etc.

Best to simply expect the update when it is given.

The Lloyds wording has clearly shifted gear - this one is not going through as proposed.

Https://www.thetimes.com/business-money/companies/article/bmw-seeks-meeting-with-rachel-reeves-over-finance-scandal-bill-ptltvjk8m

BMW is reportedly seeking a meeting with the Chancellor, Rachel Reeves, to discuss the FCA’s proposed compensation scheme for mis-selling car finance, which could cost lenders as much as £11 billion. 

• The scheme, as proposed, would require many motor finance providers to pay redress to customers in agreements dating from April 2007 to November 2024. BMW’s UK finance arm has already set aside ~£207 million to deal with its exposure. 

• Under the regulator’s assumptions, 44% of motor finance agreements in the covered period would be deemed “unfair” under the scheme’s criteria. 

• The article also notes that BMW is likely to raise the issue in the context of the broader electric vehicle (EV) investment and policy environment in the UK — i.e. it’s not just redress, but how regulation intersects with capital investment, incentives, and industry strategy. 

• The Treasury is aware and watching closely; one quote from the Treasury in the article says it wants a “resolution that is efficient and orderly, giving certainty for consumers and firms.”

*All the best.

The market rarely follows conventional rules Bladerunner, I agree with that. At least in the immediate sense. Over a longer time horizon is when logic would often prevail, if the measurement of logic is a share price. Short term, irrational behaviour is the order of the market.

I see why you would be out of the larger market right now. I see opportunity arising in the market over the coming months, lots going on. Will accumulate if it happens.

At the end of the day you have to do what suits you. I acknowledged a long time ago that attempting to 'time the market' is a failing game for me. Because of this, several years ago I shifted to a 100% Global Index fund for my stock portfolio allocation, put your money in, sit back, and live your life - with a 30+ year horizon on my side I should be okay. CBG proved to be the exception. Because of my intimate knowledge of it as a company, and its price / fundamentals, I went heavy into it last year. I check my index funds probably once a month, I spend too much time looking at the CBG news / events right now because there is a lot of moving parts to stay across - I am looking forward to the day it can be more passive.

For better or for worse I do not sell, I only accumulate, same goes for the indexes - again because I cannot consistently time the market. I thought we would be holding £5.60 this week - I was wrong, but I can say with a greater level of confidence that £5.60 will be achieved again at some point in the future. I cannot say with confidence if that is this week, or next year, so if the fundamentals and my convictions remain, I hold and buy more if the price is right. ''its easier to predict that something 'will' happen, rather than 'when' it will happen''.

On my CBG analyses I have worked various outcomes ranging £25m-£200m of extra costs if the scheme goes live in its current form (this is not advice, I have no idea what it will be - simply using this calc to understand the investment case). I am still delighted to own this stock under these ranges, should it arise. I would pragmatically like to see the FCA wind-back the current scheme by '25%' on specific elements following the aggressive pushback from the banks, and get this done and dusted. What will happen, I have no idea, could well go legal if the banks interests do not align with the scheme and could be delayed - I trust they will do what is broadly in my interest as a shareholder, as it will broadly align with their own.

I do also enjoy the psychology of it as you mention. I am a deep thinker and enjoy the analysis. I also find observing the emotions of investors / the market mechanics fascinating. Humans really are so predictable, its no wonder the little guys money can be transferred so consistently to the asset giants. After seeing this for years I stringently reject reacting as the market is doing at that time, again for better or for worse - I'll tell you in 30 years if it works.

All t

I can hazard a guess as to what ‘niharroy’ would suggest:

1 - reinstate dividend immediately, 60p per share, regardless of uncertainty over final exposure to a potential redress scheme.

2 - all of the board buy £1m each of stock.

3 - tell the FCA to stick it up their arze, and keep it as business as usual.

(I might agree with point 3).

Why have they issued the RNS? Because they are absolutely obligated to. They are a regulated bank and the moment they believe their provision may change, based on new information (redress scheme including scope they did not anticipate), they have a duty and obligation to inform the market.

And you don’t feel that the current price to book ratio of around 0.5 reflects the uncertainty lag appropriately? If we say that under normal circumstances CBG would trade at a modest book value of 0.8 ( its long term average is far greater ) this would imply a current market discount of around £450m (in addition to its provisioned £165m)

You believe the discount should actually be more like £750m ( plus £165m prov), whilst considering the vast improvements in the potential costs ( Sc victory ) / financial position ( capital buffers ) since Jan 2025?

Interesting thought - I for one couldn’t say it won’t happen with certainty, so I won’t.

Good to see you Pineapple - last heard from in April at £2.xx educating everyone on how the shorters know best. Hope you’re well.

Rickengland - interested in your analysis on how you arrived at £2.70 / £3.

The market last priced CBG at these levels whilst a ‘£44bn’ cost to the industry was in play. Prior to a major SC victory. When CBG had materially less capital provisioned / allocated for this. In the midst of a global stock market sell off (Trump tariffs).

Uncertainty still prevails, thats for sure - but now that the top end extent of a potential scheme is know ( £11bn vs £44bn ), and CBG have actively provisioned what will likely prove a very significant portion of any final costs in a worst case, curious as to what path leads to your numbers?

I appear to have missed the fun today - not to rub it in but sounds like I had a much more relaxing day in the green Irish countryside!

Human emotions are a wicked thing - the market has a unique ability to twist them every way possible, this is why we humans aren't very good investors, generally speaking...

I stand by the notion that this BB is bit of a gem when compared to some other cesspits I unfortunately stumble across from time to time - lets try and keep it that way ladies / gents.

Emotions aside - as Knot says, totally understandable why the market has done what its done today having been involved here for a year. I can genuinely say that at this point in my CBG journey I feel nothing when looking at the screen this eve. I remember investing at around £2.20, to then see it fall to £1.80 a few days later - I had the recognisable pit in my stomach that day, and a couple since (crazy year when I look back!), but after the 30th rinse and repeat over 11 months it means very little to me - long term convictions are unchanged. Just zoom out and see the overall price trend and logical prevailing - we should all be here for the long-haul and not watching so closely strictly speaking, which makes these events far easier to stomach. Will take the buying opportunity as usual when the right price comes along.

Bear in mind that a 'material increase' could be 15% (accepted lower limit of material in this context). It could be more. What we have to acknowledge is that the uncertainty is as real as ever, hence the reactions. I find great comfort in the £400-£500m chest that CBG have compiled for this, naturally as a SH I want to hand over as little as possible, but its there if required. And yes, as has been stated, 'if implemented in its current form', given the tone and pushback in a mere 48 hours from 3 of the 38 lenders, this one is far from over yet chaps.

Being objective about my initial viewing of the FCA scheme on Tues, in the moment I too appear to have fallen for the FCA engineered ploy - relief at a lower number when compared to the potential £18bn which they punted out initially. The banks clearly have eyes for a far lower number, and the more I read / understand about the scheme and its holes, I can understand why. I recall commenting in early August following the FCA weekend release that the likes of Lloyds would take the baton from CBG and challenge this in the courts if the FCA significantly overstepped - it appears something like that may well come to fruition if they cannot hammer out their differences in the next 6 weeks. For better (lower liability) or for worse (delays) - it is what it is at this point, i'm happy to be along for ride.

Life goes on folks - much more important things than CBG, BB's or any other money related distractions in life - keep perspective on this one.

Enjoy your evenings.

So we are now into the inevitable first stage of negotiations during the Consultation period - Lender pushback.

FirstRand sound aggressive on this. Lloyds statement supporting a similar rhetoric, albeit in a more conservative tone. Both suggest some element of the scheme has exceeded their estimations (or hopes), at least on a surface level ready for negotiations with the FCA.

The 2007 / 2014 time scope Knot has discussed is likely one of the elements, and will certainly be an area for pushback if the lenders do feel there is legal grounds to do so. The banks must be convinced of legal grounds to avoid later CMC challenges through the courts - I am not qualified to give an opinion on this, both sides clearly hold opposing views.

The 35% / 10% test for unfairness is also certainly going to be a point of contention. This 'unfairness' at these levels is not founded in law, to this point. Johnson was based around the 55% level + several other caveats. Even modest levels of modification to this during the Consultation period, i.e. 40% / 15% for example, would have significant affects on lowering the amount of contracts caught by this element, and thus significantly lower redress scope. Something like £3bn of the £8bn, was from this element, with a very small amount caught by the 50% / 22.5% excessive level, which shows a significant number of deals are in this limited ascending window, which as this 35% / 10% number increases even marginally, will disproportionately lower the scope of costs. This will certainly be an area the lenders are looking to push on - and indeed the FCA have welcomed discussion on this specific element in their report, strangely.

Where this goes after 6 weeks is anybody's guess at this point. It will clearly hinge on the negotiations and how much give is on both sides, with an eye on the 'better the devil you know' scenario of getting this resolved neatly, as opposed to the legal route.

An RNS from CBG is required, I would expect one this week. Remember that Close maintains a war chest of around £400m - £500m - the cash is there for all eventualities, its a question of damage limitation at this point.

All the best.

Sg2025 - if that info is from a article or note can you link it please?

Thanks

Firstly from a basic SP perspective - the initial rise this morning was the sincere side of the market, took it to around £5.50. I can only assume at this point there are some significant options open with a strike price of £5, it has proved incredibly magnetic over the past few weeks - shown to be artificially so this morning. If this is the play and MMs are hedging to maintain this level, this will pass, quickly. I do not accept that the FCA release is not worth 10% or £75m on the share price given the diminishing uncertainty and limited exposure, and £5.60 should be achieved which would still only be around 0.55 / 0.6 of book.

Secondly - RBC analyst Benjamin Toms has updated his estimated provisions for various banks this morning such as Lloyds being able to release £300m from their £1.2bn, and Barclays exposure being in line with their £90m provision, no comment on CBG. I find this very interesting, given that RBC released the below figures in August following the SC verdict:

Based on their estimated redress scheme of £11.5bn (they got this bit right), the provisions required would be:

Lloyds - £1.6bn (extra £400m on current provision)

Barclays - £216m (extra £125m on current provision)

CBG - £170m (extra £5m on current provision)

https://www.cityam.com/motor-finance-beneath-the-bonnet-uncertainty-lingers/

Now this morning they suggest that their estimated base case has been delivered, and Lloyds can RELEASE £300m (previously said would need another £400m), and Barclays will suffice (previously said would need another £125m) - what does this say for CBG and why have they not commented?

Tin foil hat time - it feels like RBC has been put on a task with CBG. I found their forecast downgrade to £5 a few weeks ago very odd and unfounded, and it now perfectly aligns with this magnetic £5 number in the market. Is somebody attempting to manipulate a buyout position here and has analysts on side for it?

That aside - SG2025:

1) If one of the lenders takes FCA to court, does it mean the whole redressal will have to be paused or falls through ?

2) Am I right to say, CMCs can still take lenders to court after the redressal. If so, how does the uncertainty resolves with this redressal ?

My interpretation of both - a legal challenge could delay implementation, but I do believe the scheme will be finessed over the next few weeks and will go live early 2026 for the reasons stated in previous posts. CMC could take lender to courts after a redress scheme, but only on the grounds of a different legal challenge. Once a consumer accepts the Opt-In scheme, they legally agree to full and final settlement of that matter (I believe). The CMC would have to find a different legal angle to then go back to court, or for those consumers who choose not to partake in a scheme because they believe they will do better through the courts. I do not believe there is enough financial scope for gain, for the consumers or

Knot - hope you’re well.

I agree that there are angles for challenge on this.

Im my view it comes down to the more pragmatic reality of do the lenders want the fight at this point, or are they willing to take the levels being proposed on the chin to put this behind them.

Its reasonable to conclude that if a redress scheme does not go ahead, the lenders will face legal challenges through the courts, it will leave space for CMC led class action suits prying away at any hole in the defence, wrangling on for years, costing a fortune in terms of cash, SP and reputation.

Viewing this from the business perspective, I might be minded to take the pill and move on. And I believe, as I always have done, that this is why the FCA will, and have, pitched this scheme low - to dampen any fight.

Time will tell - but i’m optimistic that the final scheme will be at todays approx values or less - from November 2024s estimates to October 2025s realities, i’m happy.

All the best.

I would hazard a guess that £5.60 (high point following SC) becomes the new floor, in a similar way as £4.60 was hit in July, fell to £4, and subsequently then £4.60 has served as the support following the SC.

I would think £5.60 is achieved tomorrow, perhaps a slow burn from there until further confirmation of a schemes final design and all important commentary from management of group exposure.

Its fair to say the underlying business is performing well, but theres room for improvement as management is working toward. The worst is behind CBG, this can be said with some certainty now - i’m a believer that 2027 / 28 are when you will see some strong ‘teen’ SP returns following fundamental improvements. Until then more basic SP rerating in terms of price to book, diminishing uncertainty, dividend / buybacks, potential buyout etc.

Onward and upward.

This is the scheme which I hoped for, and expected.

Regardless of the FCAs previous statements suggesting the scheme would be an automatic opt-out several months ago, I have long felt that this would be the gesture of goodwill and point of compromise to get the lenders on side. As suspected, they are tabling an opt-in scheme for those claims not yet lodged. Remember that a large proportion of the ‘4 million complaints already lodged’ will now not be valid based on the requirements proposed by the FCA.

Compensation calculations sound reasonable to lenders, not punitive.

Happy with the 2.09% interest calculation.

Total redress estimate including admin costs of £11bn, bang on what I thought would be logical given the various pieces of analysis. Average comp of £700 per customer.

Have always held the FCA have been negotiating throughout this process. Hit them high (£18bn) and they will be happy with the compromise (£11bn).

Deadline extension to end of July 2026 - allows time for the automation process to be implemented by firms to keep costs low.

All this coupled with the FCA going to war with the CMCs. The FoS implementing the £250 fee to CMCs who refer cases under-complaint. Tight lines on what is allowable for a claim under the SC ruling / now FCA requirements. You will see very limited CMC activity here going forward.

This is still consultation and this proposed scheme is subject to change, however I am very comfortable with todays announcement. The banks are the ‘sway’ in the next 6 weeks, not consumer groups, could get better from here.

Analysis estimate of a scheme of around £11bn was that CBG would incur costs of £170m. Provision should be accurate. This is the point at which CBG can start to rerate at a rather fast pace I believe.

The market has to receive this well - any negative SP movement is sheer short-term manipulation and given the opportunity I will be adding aggressively again.

All the best.

Heat getting turned up to a boil on the CMC companies - https://www.fca.org.uk/news/press-releases/regulators-join-forces-tackle-poor-claims-management-practices

‘’The FCA has launched a £1m ad campaign to make people aware they don’t need to use a CMC or law firm to seek motor finance compensation, and that they stand to lose a chunk of any compensation they’re owed if they choose to. Research shows 4 in 10 people don’t know they can receive motor finance compensation without using a CMC or law firm. The campaign will run online and on radio.’’

Just a guess, not advice - I also interpret this paragraph from the FCA as ‘leaning’ toward a opt-in scheme - based on them working hard to ensure consumers are aware that they can go direct to banks with the complaint without using s CMC - I do not think they would be pushing this if it was an automatic opt-out scheme without consumer input required - I also felt their wording and a couple of slips in the Committee panel suggested the same. Could be wrong, find out tomorrow.

An opt-in scheme would push this toward the lower end of any estimates.

Article for interest - https://www.ft.com/content/3d9af3d7-2af6-4a4e-8712-5998eea47828

I am going to guess that this consultation will include the estimated cost, in the same way they finger in the aired the initial £9-18bn, so that will be the main point the wider market trades on. This of course will not confirm CBG liabilities tomorrow, that will come with time, but you’l get an idea. It is also not the final design so there will be refinements.

RBC believed that a scheme would be around £11bn from memory (check), and that CBG would likely require around £170m.

Key drivers of the financial scope of the scheme will be elements such as opt-in or opt-out setup, date ranges for claims i.e. 2007 / 2010, how much a customer is actually entitled to of the overall finance deal to allow for fair profit.

Will be interesting to see.

All the best.

Update - We will issue a statement to the market and publish our consultation on a proposed motor finance redress scheme, along with supporting evidence and analysis, shortly after markets close on Tuesday 7 October 2025.

https://www.fca.org.uk/news/statements/timing-fcas-motor-finance-redress-scheme-consultation

Good news for all concerned, the initial proposed scheme will be tabled tomorrow - uncertainty diminishing. The quicker this can be put in the rear view mirror, the better.

For the avoidance of doubt - I am referring to typical capital gain of 11% from your basic global fund, as opposed to ‘yield’.

To humour the machine gun questions:

- to the best of my knowledge the CoCo is a non-retail instrument. Institution access only, due to the complexity of the instrument it is not regulated for retail brokerage. Happy to be corrected on this. It also has a minimum investment of £200,000, not unachievable but suggests to me that its geared away from your average retail investor.

- if you could, should you sell shares and buy this bond? You seem to now be ignoring the basic capital appreciation opportunity in the current SP that you were posting about a few days ago. 11% pa seems fairly realistic, conservative I would suggest, for CBG in SP appreciation alone over the next few years, coupled with a likely resumption of dividend. Potential for very aggresive spikes on the back of a buyout etc.

- thats before you even get into the complexities and realities of holding and trading the bond, regarding liquidity, CBG potential to redeem in 2029 or leave it open ended etc.

If you need answers to these questions from a forum im going to suggest a basic global index fund may be a better bet if you have your eyes set on a modest 11% yield.

All the best.