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Secure Trust Bank PLC on Friday said it did not expect to make any adjustments to its motor finance redress provision. Shares in the Solihull, England-based business and consumer lender traded 1.8% higher at 1,344.00 pence on Friday morning in London. The bank previously had estimated charges of £21.5 million in relation to motor finance redress mandated by an investigation into commission-related payments. The lender has assessed the impact of final rules published by the UK Financial Conduct Authority last week. The regulator estimated around 12.1 million agreements will be eligible for redress, down from 14.2 million proposed at the consultation stage, after tightening eligibility criteria. The scheme is expected to see firms pay out around £7.5 billion in compensation, with total costs including administration estimated at £9.1 billion. This is lower than earlier projections of up to £11 billion. Secure Trust Bank said on Friday that it ‘does not consider that any adjustment to its motor finance commission provision is currently necessary’. ‘While there have been some welcome developments in the final rules, the ultimate financial impact remains uncertain due to a number of factors. These include several areas requiring judgement, the need for further clarification on the application of the rules, information and assistance required from vehicle dealers/brokers and the outcome of any legal challenges. The group continues to monitor developments closely,’ Secure Trust Bank continued. Secure Trust Bank in February closed the sale of its Consumer Vehicle Finance branch to funds managed by LCM Partners for an estimated £458.6 million. It had shared its plan to exit motor finance last July, after the UK watchdog began its investigation into the sector. In a letter to the UK’s Supreme Court in December 2024, the FCA said almost 99% of the roughly 32 million car finance agreements entered into since 2007 involved a commission payment to a broker. Secure Trust Bank on Friday stressed ‘that its vehicle finance lending was designed to provide competitive, fair, finance to its selected customer segments’. ‘However, it considers that the FCA’s approach to assessing unfairness is not aligned with the Supreme Court judgment in Johnson v FirstRand, where the test for unfairness is highly fact specific and must take into account all relevant factors,’ the lender added. FirstRand Ltd last year went to the Supreme Court to challenge a court of appeal ruling that it owed redress to a customer, Johnson. Lawyers told the court that the decision holding FirstRand liable was an ‘egregious error’, while the Financial Conduct Authority intervened in the case and claimed the ruling ‘goes too far’. Other firms with exposure to the redress scheme include Banco Santander SA, Lloyds Banking Group PLC, which had previously raised its provision to around £2.0 billion from £1.2 billion, Bank of Ireland Group PLC, whose provision stands at €429 million and Close Brothers Group PLC, which has set aside £300 million. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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