Lloyds Bank will take an additional £800m charge over mis-selling of car finance

Open Editor’s Digest for free

Rula Khalaf, editor of the Financial Times, picks her favorite stories in this weekly newsletter.

Lloyds Banking Group said it will make an additional £800m provision to cover the cost of the long-running car finance mis-selling scandal.

Move by Lloyd’s The additional charges come after the Financial Conduct Authority said last week that the fraudulent sales scandal would cost banks a total of £11 billion.

Lloyd’s is the UK’s largest car finance provider through its Blackhorse business, and has already made a £1.2 billion provision to cover the cost of the compensation scheme.

According to a statement from Lloyd’s on Monday, the FCA’s ruling increased the risk of the bank having to offer a “higher level of compensation” to customers.

She added that Financial Supervision AuthorityThe court’s ruling means that the potential impact on the bank would be at the “negative end of the range of previous expected outcomes.”

The scandal stems from commissions that lenders paid to car dealerships as part of millions of car sales over many years, which the regulator and courts said provided an incentive for higher interest rates and were not adequately disclosed to consumers.