City watchdog issues stern directive to ensure adequate funds are set aside for drivers
The Financial Conduct Authority (FCA) has issued a warning to car finance firms, stressing the importance of having sufficient funds reserved to cover compensation bills for drivers. This mandate follows a recent crackdown by the regulator on hidden commissions within the industry, potentially leading companies to pay out substantial amounts.
In January, the FCA initiated an investigation into unfair commissions associated with motor finance deals. Shockingly, up to 40% of firms were found to have undisclosed "discretionary commission arrangements," allowing brokers and car dealers to increase loan interest rates without the knowledge of consumers. This deceptive practice was banned by the FCA in 2021.
According to the FCA's latest directive, motor finance companies are required to "maintain adequate resources at all times." This development has raised concerns that lenders could face significant compensation costs, with estimates suggesting the total could reach £50 billion. Notable firms implicated in this issue include Barclays, BMW Financial Services, Black Horse, and Santander.
Lloyds, a major player in the UK's motor finance sector through Black Horse, announced in February that it had set aside £450 million to cover potential expenses related to the FCA inquiry.
BP shares surge on reports of potential buyout interest
Shares of BP experienced a 3.5% increase following reports that Abu Dhabi's state-owned oil company, ADNOC, had contemplated a takeover or significant stake acquisition in the energy giant. However, ADNOC ultimately decided against pursuing the deal, citing mismatched strategic objectives and political considerations as contributing factors to their withdrawal from discussions.
Home Bargains owners receive £35 million dividend amidst profit growth
Home Bargains, a discount retailer, recently paid a £35 million dividend to the Morris family owners, bringing their total rewards to £105 million since the onset of the Covid-19 pandemic. The company reported a 13% profit increase to £256.6 million last year, with billionaire Tom Morris retaining a 90% ownership stake, while the remaining shares are held in a family trust.
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