<\/p>\n
Close Brothers Group Plc \u201cstrongly disagrees\u201d with a report by short-seller Viceroy Research about the amount it\u2019s set aside for motor finance compensation.<\/p>\n
The London-listed firm\u2019s shares plunged as much as 18.8% on Monday after Viceroy argued that it could have to double its provisions. Close Brothers previously set aside \u00a3300 million ($399 million) to compensate customers who were sold car loans with interest rates pegged to discretionary commissions.<\/p>\n
In research published on Monday, however, Viceroy said Close Brothers\u2019 exposure could be between \u00a3572 million and \u00a31.07 billion.<\/p>\n
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\u201cOur provisioning approach in relation to this matter is in accordance with UK-adopted international accounting standards and follows a robust governance process,\u201d Close Brothers said in a statement after market close. The company is due to report earnings alongside a business update on Tuesday.<\/p>\n
Viceroy didn\u2019t specify the size of its short position and said its calculation was based on Close Brothers paying compensation on about 90% of its relevant loan book.<\/p>\n
Viceroy also raised concerns about Close Brothers\u2019 capital requirements in this scenario, as the firm has already sold assets including Winterflood Securities and Close Brothers Asset Management.<\/p>\n
Shares in Close Brothers had already fallen 20.5% so far this year through Friday. The stock has moved sharply on news around the UK\u2019s motor finance compensation program, which reached the Supreme Court last summer. Lenders will need to compensate customers who were not informed about commission arrangements with car dealers, a practice that was banned in 2021.<\/p>\n
The Financial Conduct Authority is expected to finalise the redress program for motor finance customers in the coming weeks.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Close #Brothers #strongly #disagrees #Viceroy #short #report<\/p>\n","protected":false},"excerpt":{"rendered":"
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