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This..

https://next.io/news/casino/playtech-revealed-mystery-evolution-accuser/

I am really sorry for the holders on this stock... still trying to figure out the implications of this news.. Been following this stock a while and fortunate not to have entered it yet

Thanks Knot. My guess is that FLA will likely take up a legal challenge on behalf of all lenders and all lenders finance it. No single lender would want to take a fight alone in my view and be publicly named as taking up the FCA and potential PR risk that will follow from FCA + MPs. Also, different lenders may have different priorities to find common grounds - for example, one may have little exposure to DCAs, while others may have more and so and so,,. so, unlikely others to rely on someone else fighting FCA in court. And it makes little sense for all to mount separate ones. And I am pretty sure, FLA (as industry representative / body) must be already be acting as a liasion for all lenders to help find common grounds amongst lenders for rebuttal points on FCA's scheme proposal, with each lender add their own individual cases along with their response....

In my views, humbly, the narrative around Labour wanting to milk banks is fairly wrong. I am no fan of the Labour or chancellor, but very logically speaking, there are better ways for the treasury to milk banks and not via FCA scheme.. they also loose out on tax as Liberty2 I believe pointed out previously and in current environment when treasury has a big deficit to fill via tax hikes, this is plain silly. They have made a fool of themselves last year, I am sure there are smart people in treasury to realise and not to err on the same foolishness again..

I really really hope they use the dividend amount (all of it) for share buybacks instead.... will really rocket up the share price... B&M is not a dividend stock, and the messages should be its a great way to return capital to shareholders in the longer term by buybacks at these levels and also prop up the shares to shield themselves against potential takeover !!

My first post on B&M.. made a significant buy around 4, when the shares traded around 162-163.. you can also credit me with moving the shares to 164 :).. LOL. Looks like a fortunate timing, but direction seems to be good since. Now holding more than 2/3rds of portfolio in B&M, for near to long term. Have known the company and previous management from before the IPO, and think BME could be a good takeover target at these prices. I am trusting the new CEO and its good to get riddance of old management under which the shares have seen such a large collapse over last 2-3 years. The new CEO will need some time to turn this mess around, but his messages at the last earning resonated really well with me... While the shares can fall further and easy for fear mongerers to make loud claims, there is always a point where big value emerges, and I think we are not far from that point, if not already...

@Rick, I kinda agree with you. I also cut my holdings in half today to move some capital to another where I see more near term upside and will move back to CBG back again, as most likely the shares will move side-ways or in a narrow trading range during the time. There will unlikely to be any stock specific positive catalyst / news triggers in the next month or two, except broader sector or macro news, so the stock may go up 5-10%, but may then also retrace most of those gains, at which point I will hopefully come back.

If my memory serves me right, didn't the article in Italian papers suggest that the individuals (and MSC) have papers on their desk and are considering making a bid - i.e. there was no mention of a conversation or dialogue with Easyjet? If that's correct, Easyjet are under no legal obligations to make any public announcement - as they can not say if thats factually correct or wrong - if they are not involved. If they are, even then unless the dialogues are beyond preliminary, or unless they received any bid indication - they again are not obliged or legally required to make an announcement.

Barclays and Natwest report next week.. lloyds and others week after I think - if they indicate higher provisioning or worsening credit outlook, fear will spread to broader sector within the UK. CBG trading update is due in a month's time, and shares move on perception and expectations, while realities take time to catch-up. Fall I am saying may be short term or medium term, depending on UK macro outlook and it may not even materialize - will be driven by commentaries from other UK banks reporting first... One thing for certain I can bet on is that equities will remain volatile - usually are in Oct/Nov, new US/China tariffs in Nov, increasing jitters on US shutdown, UK budget etc. etc. all with in next 4 weeks!!

Needless to say, long-term holders needn't worry...

Likewise.. Today's fall is market jitters from US banking credit fears, spilling into Europe/UK. This will also pass next week, when UK banks report. Though, if they also indicate stress in the system, which is quite possible given the state of UK economy, CBG can definitely fall further on account of potentially higher NPL provisioning, given its SME exposure. Interesting days ahead.

Same also true for CMCs and consumers. If the FCA seems to have significantly whittled down, it could provoke strong criticism from left/labour MPs (remember the earlier HP meetings) and various consumer groups, who will also threaten court cases and disrupt the process. It’s a very delicate balancing act and I can’t see a win win situation without a court case.

Just to add one more thought to ponder over the complexity. Lets say FCA comes out with the final scheme, which is bad and not as bad - within the increased provision or slightly lower. CBG (and say Lloyds) decide better to go on with it and get it done with. But one of the other lenders (pressumably auto manufacturer's financing arm) decides to take FCA to court. Will CBG still carry on with redressal? Will be a big dilemma I think for the board/management. If they do go ahead with the payouts, while the case is won by the other lender in future, then they will look really foolish to have paid out, which will not be recoverble and squandered away significant shareholder capital, and investors will ask heads to roll. So, I highly doubt the CEO of CBG or any other lender will want to go ahead, unless the whole industry is going ahead with it.

@Jperryuk, your post yesterday made me realise a very good point that the HL could have raised, and I do not see that anyone has discussed that either. I am stating here purely for discussion and may be other legal experts can comment better on it.

FCA has stated that lenders deliberately hid the commission from customers - but why they have not justified it with the lender's motive - i.e. why did they do it? Was it to breach regulations to make more money - i.e. higher interest income over-all, adjusted for prevailing base rates etc? Clearly, lenders had not gain from just paying higher commission. So, if they did not enrich themselves doing it, there was no motive for them to be doing it, except ongoing market practice on account of lack of clarity.

I do not have the stats to prove this, but if lenders were to do it, it would be good rebuttal to FCA's argument in court I think... but again I may be wrong. FCA do not state this in their docs and I do not see it as well.

I broadly agree that first 15 or so mins were explosive and thereafter think it was balanced with FCA attendees less baffled with the questions and at least towards the end with committee chair almost pleading to consider some of the aspects - which for me gave away and probably strengthened FCA's hand in the process.

I was honestly quite disappointed with the process for various reasons, and had a chance to introspect on my investment theory in CBG. Spent some time revisiting the comments on this section as well as read through FCA's letters to the HL committee and few others. In the end, I had a few realisations, true to me, can not say for others ...

1) I had become too obsessed and partially attached to CBG with a significant investment. Which is not a bad thing, but this had made me a lot biased to analyse every bit of information and news with a one-sided biased lens.

2) FCA has some points that they are merited to - laws were broken (be it conc 4.5.3R, which does explicity state to disclose broker commission since 2014. Now one can argue that not before 2014 and that it was market practice etc, I am no expert and guess only courts can decide to that. And is the proposed remedy right in its current form - definitely not, but time/courts will tell and I do not have any say or influence on it. So will have to take it as it comes or leave it.

3) FCA's role has not been good and they are bloody incompetent - no doubt, but we can only blame them as far. they are not going to away quickly, no matter how much we fancy. even if some other organisation takes over and they are dissolved, they simply represents the fabric of this country, which is more socialist than capitalist.

4) While CBG valuation are depressed indeed, they are not only a function of motor finance. There is also a fundamental or rather more operational issue, which is evident in low RoEs, growth and margins. There are many similar examples in UK (B&M, Wizz etc to name a few), and more broadly the comments on each forum are quite similar broadly speaking.

So, do I sell the shares I own - not at this stage. Will hold for the next 6 months, until early next year to see how FCA redressal evolves vis-a-vis court etc. And more importantly how the management guides to double digit RoE and growth.

I am going to go into hibernation again - as we are unlikely to get any more concrete updates in near term and it will be more speculative with a confluence of macro, political news driving the SP, along with selective speculative leaks around the FCA consultation...

@Liberty2 - I agree that the panel probed and challenged FCA on a number of right points, but in my view the counter arguments were weak and some were left out. And since you asked, here are some of those based on the 3 key critical areas I posted before...

1) Timeframe

- FCA doesn't seem to relent on it and their argument is that they have consumer appeals from 2007-14, and what should they tell them? Well, thats not a valid argument, or is it to justify the timeframe. The key points they could have been challenged:

A) Conc 4.5.3R came about in 2014, then how can they use it for valid argument to justify the redressal before 2014?

B) Scrutiny for deliberate concealment vs partial disclosure or lack of disclosure. It was covered, but do not think that it was justified.

2) Cases covered

> All DCAs - why? and not just those where the commission was above a certain threshold as defined by FCA in 3rd category (35%/10%).

2) Redressal cost - they say proportionate, but how?

> What was the actual change in commission before and after 2021? Per their document, now the average commission is 700 (fixed and disclosed).. how is that any different than average ~750 before 2021 as per their own study, which include DCA? Statistically that means that consumer were not on average much harmed before 2021!!

> No challenge on the cost calculations ? It is highly ambiguous and faulty as per my previous post (reposting below)

> For DCAs and others - the simple calculation by FCA is not really simple and essentially implies a lot of overpayment as per their current proposed formulae. In nutshell, they imply payback of substantially more than 50% of commission + interest, in all other cases. For example:

i) Non-DCAs (no-tie up): say commission was 36% of total cost of credit, it would mean paying back 50-100% of commission. But if the commission was 34%, then no payment. How is that proportionate?

Also:

> Committee pressed on FCA's faults and at no point did Nikhil or others say sorry or they were at fault. Fine, then when why did it take Supreme Court or CoA to tell that there should be open and transparent disclosure? Why did FCA not enforce or clarify this after their study and DCA ban in 2021? Clearly, they have to take some accountability?

> The redressal allows for consumers to go to court, but can lenders go to court if they are not happy with the scheme? What is FCA's view on this?

As I said before, we should send emails to FCA and to the Lords panel to highlight the points the committee missed and still obvious shortcomings that the committee did not raise. I am sure the Lords must have had briefings from lawyers supporting the lenders, and they did not touch these directly!!???

I have many more and can go on, but these are the key ones that come to mind immediately

I must say, I am fairly disappointed with the outcome. Baring legal arguments, which I am not expert on and others can comment. But the scheme will not completely fall away, but the scope should be reduced, particularly the loss/cost calculation, time (looks difficult unless strong legal arguments), and cases it involves.

FCA council : "Discressionary commission agreements were not illegal before we banned them"

To be clear, they said that DCA itself was not illegal, but the undisclosure of commission was illegal as per Conc 4.5.3 R. Don't see anything wrong with that statement.

No. Under 35%, which is 56% of total agreements, equals zero redress?

Why have the FCA not being challenged that CONC 4.5.3R came into existence on April 1, 2014, when the Financial Conduct Authority (FCA) implemented the Consumer Credit Sourcebook (CONC) !!!???? And therefore how is the timeline 2007-14 really valid? They are using this as the justifications that the rules were clear for lenders and they breached them!!

If you are invested or short the stock - irrespective (even if you are on teh sidelines).. you should absolutely listen it. It is very very interesting. For first time FCA being put to task.

My understanding is that the onus on lender to check thoroughly from various databases (brokers, credit rating agencies in addition to their own database) and prove the individual was not its customer or ask for more details to arrive at the conclusion..