Bulletin: Lloyds' Additional £800 Million Motor Finance Provision Raises Total Redress Cost But Remains Manageable

This report does not constitute a rating action. LONDON (S&P Global Ratings) Oct. 13, 2025—S&P Global Ratings today said that Lloyds Banking Group PLC?s (A-/Stable/A-2) additional provision for potential motor finance redress is affordable, despite raising expected remediation costs. We think that Lloyds has ample capacity to absorb the incremental charge at its current rating level, supported by robust earnings and our expectation that it will moderate shareholder distributions if needed. The additional £800 million charge, announced by Lloyds on Oct. 13, 2025, follows the Financial Conduct Authority?s (FCA) redress scheme consultation last week (see ? Estimated GBP11 Billion Motor Finance Compensation Bill Is Manageable For Rated U.K. Banks And Auto ABS ," Oct. 8, 2025), and will bring the

...October 13, 2025 This report does not constitute a rating action. LONDON (S&P Global Ratings) Oct. 13, 2025--S&P Global Ratings today said that Lloyds Banking Group PLC's (A-/Stable/A-2) additional provision for potential motor finance redress is affordable, despite raising expected remediation costs. We think that Lloyds has ample capacity to absorb the incremental charge at its current rating level, supported by robust earnings and our expectation that it will moderate shareholder distributions if needed. The additional ú800 million charge, announced by Lloyds on Oct. 13, 2025, follows the Financial Conduct Authority's (FCA) redress scheme consultation last week (see "Estimated GBP11 Billion Motor Finance Compensation Bill Is Manageable For Rated U.K. Banks And Auto ABS," Oct. 8, 2025), and will bring the bank's total provision for motor finance to ú1.95 billion, which includes both customer redress and operational costs. Lloyds intends to push back on specific points in the consultation...

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