As I said I used it as a comparison, a company that has a mcap 10x it is logical it has 10x the business. |
Put down the crack pipe and step away from the keyboard. |
It can be used as a comparison, here's how I would put it, a Labour Party member I know owns a Lamborghini Gallardo. In his opinion this might be your best alternative to owning/driving a super supercar. Where else can you legally drive a Lamborghini Gallardo without ending up in jail without a politician to bail you out ? The cost of insurance and upkeep alone is steep enough that I'd be fearful of driving it, but I'm not a multimillionaire labour politician, Anyways, his Ferrari was awesome but had to try his Lamborghini first. |
Also to do with the transparency of the contract wording. |
What has Mcap to do with anything? It’s about the value and number of contracts that have been written. They business mix between the two could vary massively. |
Based on Close Brothers Mcap of 870£m and STB 87m£ , I estimate up to 16.5£m STB would need to set aside for compensation. |
Check the CBG thread for more on the claims management process. I believe the defendant pays a lot whether it loses or wins. Not sure if this is meant to be changed.
I was hoping someone could take the CBG 165m figure and scale it for STB's history. I'm pretty sure STB has been cleaner, with the variable commission finishing in c. 2017. I can't find the relevant press release.
CBG has a £2bn vehicle finance book at present, vs £250m for STB. |
That's a good idea and successful claims will recoup the cost anyway from the miscreant. Sensible. |
 The UK financial ombudsman announced on Friday it would start charging claims management companies for bringing cases only a day after its chief executive quit unexpectedly, having clashed with its board over the plans.
The Financial Ombudsman Service, which resolves consumer complaints against the financial services sector, said that from April it would charge claims management companies £250 for every case they bring beyond the first 10 each year. This would fall to £75 if a claim is successful.
The change is designed to address concerns that “there is little commercial incentive for representatives to ensure the complaints they bring are well-founded or have merit”, the FOS said.
Only 26 per cent of cases brought by professional representatives succeeded, it said, compared with 38 per cent of those brought directly by consumers.
The change is likely to be welcomed in the City of London, where executives have complained about “ambulance chasing” claims managers pursuing spurious cases. Consumers will still be able to refer complaints directly to the ombudsman for free. |
They haven't quantified as yet. |
What are STBs estimates? |
Close Bros statement out today, setting aside £165M to cover costs with wide window up/down. This whole saga is a mess with substantial repercussions and won't be business as usual for banks involved, yet or ever = more UK headwinds.
"In light of recent developments in relation to motor commissions, the group has been reviewing its accounting assessment of these matters, as previously stated. As a result, the group anticipates that it will recognise a provision in the H1 2025 financial statements in relation to motor commissions of up to £165 million. This includes estimates for certain potential operational and legal costs, as well as estimates for potential remediation for affected customers. The estimated provision is based on probability weighted scenarios using various assumptions. These include, for example, commission models, rates and time periods in scope of any regulatory redress scheme, as well as response and uphold rates." |
Re above, some interesting comments in the SUS trading update this morning:
"Equally important for our future prospects is the indication of a more balanced and pragmatic approach to government regulation and policy. Recent shifts suggest a reassessment of previous consumer-focused measures, addressing concerns about potential constraints on economic growth.
Recent calls by the Prime Minister and the Chancellor for a deregulatory and growth-focused agenda, and their demands from every regulator for specific proposals for these, offer the prospect of a stable and pragmatic framework for financial services. The new zeitgeist is in fact exemplified in the current edition of The Economist magazine where the front cover splashes 'the revolt against regulation'. As a result, the past two months have seen a number of representations from UK Finance, the Finance and Leasing Association ("FLA") and from S&U to both Government and Parliament designed to ensure a robust and predictable regulatory framework. The FLA, Advantage's trade body, is preparing further suggestions for reform to which we will contribute.
The question does remain as to whether this new encouragement of responsible risk-taking will extend to the Supreme Court, when it reviews last October's Court of Appeal decision on commission disclosure which has so disrupted the entire motor finance market. Again, the signs are cautiously encouraging. The speed with which the Supreme Court is considering the matter and their sanctioning direct representations from the Treasury, the FLA, and the Financial Conduct Authority, speak to a common-sense approach. My view is that even should the Supreme Court uphold the lower courts' decision in principle, any 'harm' found to have been suffered by consumers will be so marginal as to make demands for redress minimal." |
They might address the car loan side.
If she thinks pumping more retail debt and relaxing standards will help she might get a shock as it's pushing on a string and the growth gearing to debt level is coming to the end of the road, if not already there, and they just don't want to see it yet.
Might help for the corporate side if it goes along with tax incentives for capital equipment purchases to drive productivity but it might lead to more unemployment. |
Sky news:
Rachel Reeves has summoned the bosses of the major high street banks for talks this week as the chancellor seeks ideas to grow the economy; sources say the financial services component of the government’s new industrial strategy is on the agenda. |
Could be any number of reasons and not all bad.
29th Nov the wife of the head of Savings & Vehicle finance at STB bought.
Would she have done so if he thought it unsafe? |
Anyone concerned about the lack of the pre-close trading update? Last year 25th Jan, 2023 a week earlier. |
Couldn't agree more with this poster on Stockopedia:
"Will this be the end of the lawfare which stops out economy moving, who knows.
I finance a car for a price I consider fair. The small print which no one reads doesn’t say the sales person got commission.
I get a multi thousand payout for absolutely nothing. It’s a total nonsense." |
From City AM:
Close Brothers has swapped in a top magic circle law firm for its Supreme Court battle to overturn the landmark motor finance test case.
The two lenders involved in the Court of Appeal case, merchant bank Close Brothers and South African lender FirstRand, are bringing their fight to the Supreme Court.
City AM understands that while Close Brothers had Leeds-based law firm Walker Morris on for the Court of Appeal case, the lender has tagged in the big dogs for its day at the Supreme Court.
As confirmed by the lender’s representative, a team of lawyers from Slaughter and May will be representing the lender for its appeal.
Sentiment changing on this ridiculous claim culture which is stopping lending. Hopefully gets thrown out in April.
Added a few here recently |
They need to act fast. The economy is on the brink of something not at all good and will take a long while to recover from and Labour will be toast. Not looking good out 18 months, just mho. |
Financial Ombudsman Service chief quits months after Reeves’ call for reform
Abby Thomas has stepped down following criticism over the ombudsman service’s role in the motor finance commission scandal.
The boss of the UK’s Financial Ombudsman Service (FOS) has quit, months after Chancellor Rachel Reeves said she would overhaul the public body.
Abby Thomas was set to appear in front of the Treasury Committee of MPs later this month, but her departure was announced on Thursday.
The chief executive, who had come under fire for the FOS’s role in the motor finance commission scandal, only started the role in October 2022.
The FOS is a public body offering consumer redress over disputes in the financial sector.
It has been under fire since last year, however, for taking what some finance firms consider an overly consumer-friendly stance over complaints about alleged mis-selling of car loans.
The scandal, which relates to complaints over undisclosed commissions on motor finance deals, has left several major lenders facing billions in possible compensation payments. |
Head of financial ombudsman resigned. |
Drop seems in line with comparables - but note that ambulance chasers from Slater + Walker are now mailshotting to stir up this issue. Hope they lose a packet on it! |
Where is personal responsibility gone in this country? The thought that it’s always someone else’s fault, seems to be main line of thinking in all sorts of areas in life.
If I choose to buy a golf club or anything else on credit, it’s my decision and it’s up to me to look at other quotations and options. Being deliberately misled or scammed aside of course! Let’s have a common sense ruling, if any common sense exists anymore!
Rant over! |
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