Close Brothers Share Discussion Threads

[thebutler] 26/10/2024 18:23

I rarely sell at a loss because I always believe stocks generally recover even after bad updates. But I'm afraid I had to sell CBG at a loss. This could be horrendous. Somebody mentioned this might be another Amigo and I tend to agree. IMO this will drag on for years, totally decimating CBG with no prospect of a dividend.

[pj84] 26/10/2024 13:52

Try this link

[stoopid] 26/10/2024 10:49

Paywall, any chance of posting the text??

[karv1] 26/10/2024 08:13

Tom that 2billion LLOY estimate, might of changed, I must admit I have not read all the information relating to the news yesterday. but that part of the RNS about halting new motor loans and rewriting there contracts would suggest a very grim picture.
Are they suggesting there could be liabilities from day 0 to 25/10/2024?

[pj84] 25/10/2024 22:17

Final para of article

"While Stephen Haddrill, director general of the FLA, which represent motor finance lenders said: “This is a significant and unexpected judgment, the implications of which stretch far beyond the motor finance sector, making it an issue that demands the immediate attention of the FCA.”

[pj84] 25/10/2024 19:30

Well whatever happens now it won't be due to lack of legal challenge with CBG pursuing this case to the UK supreme court as well as Barclays seeking Judicial review on one of the cases that they are involved in and I haven't heard any update from that challenge since. A quick reminder of my earlier post.



A reminder of the Barclays application for judicial review reported back in July

"Barclays attempt to quash key car finance ‘mis-selling ruling is wrong, says watchdog

Ombudsman warns bank is arguing academic points in applying for judicial review

Michael Bow

08 July 2024 2:25pm

Britain's financial complaints watchdog is battling Barclays bid to quash a key ruling at the heart of the motor finance mis-selling scandal.

The Financial Ombudsman Service, which rules on customer complaints, is trying to block Barclays application for a judicial review of its findings.

The dispute revolves around a January decision from the ombudsman, which found that the banks car loan division had unfairly paid commission to a credit broker.

Its ruling revolved around the treatment of a single customer, known as Miss L, who was not made aware that her loan agreement with Barclays involved £1,600 in commission.

Findings of the case sent shockwaves around the industry, as the Financial Conduct Authority (FCA) launched a wholesale review into whether customers had been unfairly treated when securing loans from second-hand car dealerships.

This led to other lenders, such as Lloyds Bank and Close Brothers, taking a financial hit.

However, Barclays has sought to push back against the ombudsman by mounting a legal challenge.

This has paved the wave for a bitter High Court dispute, as the ombudsman has accused the bank of arguing academic points.

In its court filing, it said: The claimant (Barclays) was given full opportunity to provide evidence that the car was not sold by the car dealer for a profit, but did not do so.

If Barclays succeeds in its application for judicial review, the ruling could potentially throw a spanner in FCA's investigation.

The regulator has paused any further complaints until September while it gathers more information and awaits the outcome of the judicial review.

In its original court application filed in early April, Barclays said the court should quash the ombudsman's decision. This is on the basis that there was a real divergence between the agency's stance on complaints and those of the courts, where the ombudsman has lost a succession of cases.

A Barclays spokesman said: We do not agree with the Financial Ombudsman Services decision in this case and are therefore challenging it.

This challenge relates to a single, specific case and separately we continue to support the Financial Conduct Authority's review into historic motor financing arrangements.

Due to the ongoing nature of this case, we cannot share anything further at this time.

The ombudsman and the FCA were contacted for comment."

Lets hope Barclays application is successful and even if it doesn't negate the investigation that it limits it's scope in some way."

Whatever the outcome, the changing of the goal posts by the regulator, so long after the event, deserves every legal challenge possible.

[hamhamham1] 25/10/2024 18:46

It's like the loan insurance saga.
Some want to try and look good by beating financials around the head and protecting Joe Public.
They see it as robbing from the rich to give (back) to the poor.
And financials are making big bucks in profits, so legitimate targets is some peeps eyes.

[tomboyb] 25/10/2024 18:24

Chriss you think the equity is worthless? -

Surely no one as yet knows of the exposure Close has to problem -

Lloyds worst case scenario I think was an exposure to possibly £2billion -

[norfolkngood1] 25/10/2024 16:41

Whether it's a good share or not is not the question at this point. What we have now is major uncertainty. Firstly the appeal will take ages. Then, assuming this results in a major compensation exercise, the costs will be astronomical. Not just the refund to the customer but 8% simple interest plus having to resource teams of complaint handling contractors whose daily rate is eye watering. I'd stay well clear.

[misoolisland] 25/10/2024 16:06

is this a good share

[suetballs] 25/10/2024 16:06

Total loss from one event - ah. I was a Lloyd’s underwriter and watched 911 with horror.
Suet

[chriss911911] 25/10/2024 15:46

rights issue or sell more risks assets, its an all or nothing gig, and whilst nothing might mean 10%-20% of equity after the huge dilution that will come, the relative exposure of close is off the scale, so this could also result in a total loss from one single event, you cannot rule that out now.

[suetballs] 25/10/2024 15:34

That's me out too.
Not a large holding but painful enough.
Let's see what Rachel has in store next week.
GL to those who remain.
Suet

[stoopid] 25/10/2024 15:06

There will be no White Knight. Why would you buy something with possible huge liabilities when you could just buy the assets out of any administration or fire sale.Rights issue? Possibly, if the 400m CBG have planned ronset aside isn't enough...Will be no divi for the foreseeable future....

[hamhamham1] 25/10/2024 14:51

Once it's clearer, I may hop back onboard, if reasonably good outcomes, will be plenty of room for getting on board IMO.

Yes, I may make less, but at least I'll know the direction of travel at that point. Once bitten...

[timmy11] 25/10/2024 14:50

that is their intention, to kill the market,
this country stinks

[hamhamham1] 25/10/2024 14:45

Too many financial unknowns IMO.
How much will this lastest ruling affect CBG?
How much will existing ongoing actions cost CBG?
What other family jewels will need to be sold?
Does CBG have enough dosh to cover all upcoming obligations, if not how will it rasie the money?
What will the loan market look like post all thse court rulings?

Tricky one to call, could be bargain of the century or could be a money trap.

I guess we will see what unfolds in the upcoming months, the Sunday papers will certainly have something to say about it me thinks?

It's all the uncertainty that kills the market.
Just get it sorted!!!!

[suetballs] 25/10/2024 14:42

I'd be thinking rights issue before it's too late or a white knight.
The Board of cbg surely must be looking at all options - and the auditors will be getting more concerned after today's news.
Suet

[stoopid] 25/10/2024 14:07

Agree.......

[hamhamham1] 25/10/2024 13:59

Beware the cat ;)

[stoopid] 25/10/2024 13:53

This is why the Supreme Court will look at this carefully because it affects all current case law.Big worry for CBG and other lenders.

[stoopid] 25/10/2024 13:47

So, currently, CBG is undervalued by any metric, but this ruling, as it stands, will materially impact them. To what degree is anyone's guess, but in the RNS release, CBG have already said that it will result in "significant liabilities" for the group. This is bad. Could mean anything from bankruptcy to a large rights issue to anything or nothing.It will be taken to the Supreme Court where any decision will be final. LLOY down 5% today as well because of this. There is certain to be something come out of the Supreme Court because the appeal courts decision currently affects all case law relating to cases like this and they could well throw this out. It also retrospectively causes banks and credit brokers to have a fiducary duty of care to the customer, which they never dis before.There is no doubt about it that this appeal court ruling could be hugely impactful on CBG. They are suspending further motor loans to change the terms and conditions in their current paperwork. They are setting aside approx 200m - 400m, question now definitely is, will it be enough. So, it's now a waiting game, to see what the supreme court say, to see what the FCA come out with and also see what happens with Barclays current court case against the FCA.CBG is a well risky investment now. Pays your money, takes your chances.I'm still in atm but wavering.