LLOYDS warned yesterday that banks are likely to face a higher than estimated bill over the car finance compensation scheme.
The lender told investors that it would be contacting the Financial Conduct Authority (FCA) to say it believed the watchdog’s figures were off.
It is adding £800million to cover the potential costs of the scheme, bringing its total provision to almost £2billion.
The FCA estimated last week that the cost to the motor finance industry could reach around £11billion, way below the £18billion redress bill initially forecast.
It said payouts were due on around 14million unfair deals, averaging about £700 each.
Lloyds Banking Group said it did not believe the FCA’s calculations reflected customer losses — and thinks more historical cases are likely to be eligible for compensation.
It said: “The group will make representations to the FCA accordingly.”
Since the FCA published its proposals, lender Close Brothers has warned its £165million provision would not cover costs.
Santander, which has set aside £295million, is understood to believe the same.
LIDL JOBS PAIN
LIDL has put 130 jobs at risk ahead of Christmas as part of an efficiency drive.
The discounter told The Sun it was planning on making nationwide cuts to its HR and recruitment departments.
These roles, which are based at Lidl’s regional distribution centres, will be relocated to its headquarters in Tolworth, South West London.
The retailer said it would also create 100 new HR roles in its head office.
HOME BUY AID
A NEW mortgage initiative for first-time buyers has been billed as a replacement for the axed Help to Buy scheme.
Builders Barratt Redrow and Persimmon Homes’ Rezide Equity Loan lets buyers borrow 15 per cent of the price on new-build properties, with a fixed 4 per cent interest rate.
Buyers put down a 5 per cent deposit, and can get a Barclays or TSB mortgage for the remaining 80 per cent.
MERGER WORTH A LOTTO
NATIONAL Lottery operator Allwyn has agreed to merge with Greek firm OPAP to create a globally listed gambling giant worth around £13.9billion.
Allwyn, which owns a near-52 per cent controlling stake in OPAP, plans an all-share tie-up with it.
The plan is to retain OPAP’s Athens listing for the merged group and also launch a stock market listing in London or New York.
The groups claim the deal will see the combined firm become the largest listed lottery firm in the world and second largest gambling entertainment firm.
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