Proactive Investors - Lloyds (LON:LLOY) Banking might be the worst affected of the major banks by the FCA’s clampdown on motor finance commissions according to a couple of City firms.
Analysts at Barclays (LON:BARC) have analysed the comments from the regulator and believe that it raises the possibility of compensation being paid the banks.
While uncertainty is “high,” it suggests a potential provision range of £0.5-1.0 billion for Lloyds.
A similar number is estimated by teh team at Royal Bank of Canada (TSX:RY), which estimates the issue at stake is worth around £300 billion overall.
According to the Canadian bank, the downside impact for the motor finance sector is around £2-8bn,
“In this scenario, Lloyds could see the largest absolute impact at £1.2bn, however, Close Brothers could see the largest relative impact at c.120bpsof capital.”
Shares in Lloyds fell 1.7% to 44.2p and Close Brothers by 2,2% to 644p.