FCA loans investigation ‘not black and white’
19 February 2024
Banks are in a “holding pattern” as the FCA investigates whether there has been systematic harm with discretionary commission models, says Kate Robinson from regulatory adviser Avyse Partners.
However, the issue is not “black and white… the responsibility has been pushed towards the banks but the brokers were involved in this process.
“From a lender’s point of view, these lenders have been held to the fire somewhat by brokers.”
Lloyds is understood to be most exposed, through its Black Horse division. There are estimates it could cost Lloyds £1.3bn to £2.4bn.
The issue is likely to be raised this week as Lloyds delivers its annual results.
Barclays also made loans through its subsidiary Clydesdale Financial Services, which trades as Barclays Partner Finance – but its exposure will be low as it only has a market share of 2.5%.
Last week, Natwest said it had no exposure to car finance. Santander has said it is too early to tell.
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