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So at some point over the next week or two the FCA are expected to publish the Consultation for a potential redress scheme. This will run for around 6 weeks, and will be the time where all parties involved have the opportunity to understand, challenge, discuss the scheme the FCA intends on running. This will inevitably result in changes prior to the final scheme launching in 2026 (assuming no elongated legal challenge is provided by banks / non-bank lenders).

The consultation will give an idea of the type of liabilites CBG etc will face. What this will be continues to be the question for shareholders.

A couple of points to remember:

- the £165m provision which was booked for 2025 (year end 31st July), remained unchanged, it was calculated by CBG based on the then legal landscape of the CoA ruling. The subsequent SC victory significantly narrowed liabilites. Important point on that - to the best of my knowledge, given that the SC ruling was August 1st, after the year end, they could not actually adjust this provision between year end and results reporting this month. I believe the SC victory would count as a non-adjustable event, meaning it could not be formally recognised in provisioning until the next financial year - even if management are now estimating a different liability. That aside, I suspect the provision will be sufficient, perhaps give or take 25%.

- And just for a point of perspective - For those who take the stance of 'the Gov want to take all the money off the banks + shareholders, and give it to the common people', remember that HMRC and the Gov are heavily subsidising any redress scheme. Provisions and costs are made pre-tax. With the bank tax rate, HMRC has lost out on approx £50mn in tax revenue from CBG alone in the 2025 financial year due to the provision and costs associated with this. On a hypothetical £13bn redress scheme, they will directly lose around £3.2bn in tax revenue from the banking sector. Shines a different light on 'what' the Gov may actually want right now.

Enjoy your weekend folks.

Again it becomes obvious that there is a sense here that the management of a FTSE250 banks number one priority at any given time is the share price. This is not an AIM punty stock with maverick management willing to fly fast and loose to rip a SP.

Ive said time and time again that a regulated banks priority is to remain well capitalised and prepared for any uncertainty - of which CBG has plenty of right now, soon to be diminished. As per results there was £60m of restructure / fresh provision - taking around £70m out of equity this year total - there goes your token dividend.

They are driving this group in the right direction - taking the hard steps of winding down dead wood, acknowledging potential issues before they become a problem - its a messy transition period, which gives the undervalued opportunity. They have everything in their arsenal to fulfil the targets, and have a boat load of cash on reserve. Cash is King here.

I hold that the fundamentals of the results are good, forecast beating numbers where it matters, but the snippet of uncertainty from the motor finance arm and the other dragging costs have offset this - this coupled with the typical form of CBG results day SP action was always going to give a red one.

Patience is required!

Yes RNS is leaning on the poor side of the spectrum this morning.

- no dividend / buyback until further clarity on scheme, as expected

- NIM improvements forecast for medium term as expected

- motor finance scrutiny has seen something they are prickly about on the early repayment side so provisioning proactively for that

- Novitas legacy matters have been concluded, can move on from that

- group will focus on Business based lending and avenues of income going forward targeting higher returns, as expected

- capital ratios very strong

- cost saving going well, with another £60m forecast over 3 years

As to expected, the group is still very much in the midst of this thing, and they are making that clear.

Longer term view required as always, but no danger of a green one today!

All the best.

The very high II ownership plays into the volatility that CBG endures. There is a relatively small float of stock which is actually being traded on a daily basis, creating limited liquidity a higher volatility with it - namely by the impatient retail and shorts which you mention.

*DISCLAIMER FOR THE BB POLICE - NOT ADVICE OR A PREDICTION TO ACT UPON - JUST A GUESS FOR CONVERSATION SAKE* - In a contrary mechanism, todays action actually suggests to me that tomorrow will see a meaningful positive bounce - some funny old shenannigans with bids / asks, MMs leading it lower regardless of some bulky buy side pressure from the off-market trades, catching a few of the impatient along the way.

I have witnessed similar patterns ahead of the SC announcement for example, and prior to various other notable up days.

Who knows!

One would hope for a positive SP reaction aided by the right noises coming out of management, as you suggest. However, historically (atleast in recent times) the market does use CBG results day to push the price lower, which then recovers and gains ground over the following couple of weeks. I would also poise yourself for another buying opportunity on the back of an artificial fall tomorrow. I have been actively adding at the £4.50 - £4.60 range since the SC ruling - only around 15% on my large initial holding but I do consider this value territory in light of the significantly narrowed liability. I always have more capital to apply when the opportunity arises.

The fundamentals remain exciting here, even more so after the aggresive SC narrowing. 0.5 price/book, low forward p/e, likely dividend / buyback SP catalyst in the next 12months, clear paths to higher NIM through more selective business / cost cutting / removed overhead of larger structure and legal costs etc, agile group potentially a buyout target.

I do strongly hold that this is still an undervalued asset and there is significant room for further re-rating in the short / medium term.

All the best.

Results - this is their first opportunity to expand on the positive impact of the SC victory so I would expect something on how that.

As previously stated, i’m not expecting a buyback or meaningful dividend, don’t believe its the right move with FCA quantum unknown and media scrutiny still live - maybe a token though due to existential CoA threat removed (things like this could have contributed to an audit delay).

You would hope for continued cost reduction success - £25m+

Commentary on Winterflood sale.

Steps to improve NIM going forward - wouldn’t expect progress on this since last update in the current cycle.

They’ve launched new funding in areas such as BTR recently and they will speak more on the cutting of deadwood from the Consumer Premium Finance business and where they see opportunity on the business focused side - I believe they will push heavily into the different Business focused lending across the group - better margin, less regulation that consumer based products.

And of course that ‘they are looking forward to engaging with the FCA’.

Why not just say - because its not particularly relevant to the public, at this early stage. Its a relatively small loan for one of the major banks, coupled with gov underwriting. - why would the gov go to such a small player when they have links with the far more capitalised banking giants. Where is CBG getting £1.5bn from in investable capital right now, with enough surplus addition to their Tier1 equity to satisfy their coverage ratios? Unsure why this matters but its not CBG who have provided this loan.

Why results were delayed a week - because PwC over promised and under delivered by a few days after a complex trading year for CBG. You’d be amazed at how frequent these failures are in the Big 4 firms (my wife being a Director in one of them).

Enjoy your Sunday folks.

That would equate to 15% of loan book for CBG - not going to be them. More likely HSBC, Lloyds etc.

Fidelity tipped over the 5% reporting threshold of CBG again. Recent acquisition was done by the FMR LLC company they operate. Couple this with their previous acquisition using FIL Limited in March, they now own around 10.2% of CBG.

Institutional interest returning.

Don’t spend too long wishing and just get them sold to somebody who values them - pennies in the pound difference from £5.

All the best.

In my experience the algo trading causes the initial drops / rises, which then causes the aggressive spreads and MM influence on price direction, which then panics the PI’s into dropping bulkier volume through off book trades, exasperating the dip / rise.

Some intense support around £4.70 today which reversed the initial panic dip.

All just fun and games.

Fairly typical knee jerk reaction from the PI’s.

Delayed result notification never going to be received well - a conversation to be had with the auditors regarding their efficiency.

A lot of moving parts to line up for a regulated bank this results period - provision amounts, business sales, risk weighted calculations etc.

One week delay suggests nothing else but an admin oversight.

SP will likely settle neutral by EoD I would think.

All the best.

Amongst other things, its a display of Game Theory - ‘Cooperation’ being the most successful strategy. Look it up, its interesting.

Barclays are acknowledging a comfortable legal precedent being freshly set by the SC. They have indicated pressing their case further could risk complicating that legal landscape.

Its in nobody's interest that this matter rumble on through the courts for months / years. The FCA have poised themselves to be cooperative to reach an agreeable scheme, the banks appear to be following suit. Again, going back to the Trump playbook - the consultation period will keep matters within a legal framework and workable for all parties - allowing a line in the sand to move on. If it doesn’t, well it will go legal, and I don’t believe anybody wants it.

From extremes in life, logic normally prevails and a middle is found. Remember a few months ago it was a £44bn compensation bill to rival PPI we were looking at as shareholders, now here we are at a third of that with likely better to come.

Good place to be right now.

All the best.

Good find - missed that update this week.

Barclays state the SC provided the clarity required through the ruling and continuing their case through the CoA risked complicating the landscape. They now ‘look forward’ to applying their resources without distraction to engaging the FCA in their October consultation with this clarity.

Interesting timing bladerunner - I do recall you enjoy being in and out of this on a regular basis.

‘The FCA is ignoring the SC’ - yes in essence they are brushing over the important aspect that it took very specific tests to find unfairness under the CCA in Johnson. They are also not acknowledging the lack of fiduciary duty. They can however still argue there was a breaking of FCA CONC rules regarding commission disclosure / potential impartiality conflicts - which is what they will end up refining the end scheme to. We also have Tuesdays CoA DCA case which will impact the final scheme, and could see an over-rule in Clydesdale (Barclays) favour, shaking this whole thing up again.

The important point here is that this is pre-consultation. It is during the consultation next month that the legal boundaries will be demanded by the banks, and if they feel that the proposed scheme after consultation does not acknowledge the law correctly then judicial review will refine it further - as I have previously noted the FCA need to avoid this route. The FCA are playing the old Trump handbook ‘we tell them we want 100% now, so that when we agree to 50% later they will be happy’.

Aside from this, the FCA has already set the finger in the air financial goalposts - £9-£18bn. This is based on their current relatively expansive viewing of the matter. Once this is challenged and refined this number can only logically decrease. Again, ‘hit them high and they’l be pleased with the compromise’. CBG £165m provision is for the mid-range of this estimate (analyst calculation), and will likely suffice. There is also potential it will be over generous. There is also another £300m in reserve.

All this said and done, at 0.5 book value still, with huge capital on reserve for a scheme which has now been aggressively limited by the SC, significant SP catalysts such as potential dividend resumption or buyback in the next 12m, and an underlying consistently profitable ftse250 bank emerging out of a diminishing uncertainty blanket - theres a lot of bullish pressure here in my view, which gives more chance of seeing £7 than £4 over the next 12m - but what do I know, hopefully we are still here in 12m!

Enjoy your weekend folks.

Does anybody happen to be subscribed to The Lawyer for access to the below, would be interested to read:

https://www.thelawyer.com/car-wars-the-inside-story-of-how-slaughters-won-the-day-for-close-brothers/

SG2025 - yes thats correct and I agree with your thoughts. I am using 'banks' as a general term for the opposing side of Consumer in this case. In fact, they estimate that 60% of the car finance market is provided by the non-bank segement (Manufacturers finance arms, such as Volkswagen Financial Services, Alphera BMW) which the FCA alluded to today when quoting new car sales. So of this finger in the air £9bn - £18bn number, remember that only 40% is attributed to the likes of the banking names we recognise on the high street, or hold shares in.

As I stated last week, this was not the informed Financial Services Committee which raised the specific concerns with the FCA, and which they responded to by letter. You had a collection of relatively ill-informed panel members asking the FCA for education today - and as to be expected, the FCA educated them from their own text book.

Not much to take away from the back and forth, all I heard was the law firms want claims, banks don't want to pay them, the FCA are trying to justify their exisitence and some MP's don't know anything about the topic they are discussing - go figure!

We already knew the FCA intend on imposing a scheme, the question is at this point is making sure it is a scheme which follows legal principle (2007 / pending Clydesdale V FOS DCA elements / SC fact specific tests etc). They will go along with their rehetoric for as long as possible, (remember we are still pre-consultation), until one of the 'uncooperative' banks pushes them into the legal route if they feel they are attempting to impose a scheme without legal legs - then there position will unravel. The lack of comment on the pending Clydesdale V FOS case from the Committee panel today shows the lack of knowledge they actually hold on the topic.

Analysing the FCA tone and wording, they are really pushing the fact that this is the banks best interests to just let this happen. They are publicly softening the consumer payouts to 'hundreds not thousands', playing down the hole matter. They NEED cooperation from the banks because they likely acknowledge that there is risk that they will lose down the legal route. Where this will end up will be upto the banks - if they believe the final scheme is overall enough to stomach to put this debacle behind them then thats what will happen, but if they believe it is too harsh or without merit then it'l end up in the courts - the FCA do not want that. This promotes a balanced and proportionate scheme, which the FCA are banging on about religiously. I also felt that they are leaning toward an opt-in scheme (two comments from the FCA gave the game away a little) - this will likely serve as a sweetener to muster the banks cooperation.

I am unsure what people are actually arguing about on this forum at this point - are there posters here who believe a scheme will not happen? If so, you are most likely mis-informed. A scheme is likely, and it is likely that the provision of £165m CBG has put aside (from the the £450 - 500m war chest) will be sufficient. As a shareholder here, thats your ultimate concern.

All the best.

Forsythm@parliament.uk

Have followed suit and voiced my opinons.

Enjoy your weekend folks.

Clydesdale v FOS is the 16th Sept. One day hearing.