The United Kingdom Supreme Court rejects the intervention of motor finance of Reeves

(Bloomberg) – The United Kingdom Supreme Court refused to let the treasure intervene in a historical judicial case on the controversial loans for cars, hitting Foreign Minister Rachel Reeves, who had tried to argue that the lawsuit was hindering the Regulatory environment of Great Britain.

The treasure said last month that the case on historical practices in car financing has the potential to cause considerable economic damage and hinder the availability of car loans in the country. A spokesman for the Supreme Court, who is scheduled to listen to the case in early April, did not give a reason for the refusal. The treasure did not comment immediately.

The actions in Lloyds Banking Group PLC fell up to 4%, while Close Brothers Group PLC decreased to 15%.

The case, and a related regulatory investigation on the matter, are weighing the actions of the United Kingdom banks, since investors fear that lenders can face expensive compensation invoices for consumers affected by practices.

Meanwhile, the United Kingdom’s financial behavior authority intervenes in the dispute between lenders and several clients.

“To the extent that the FCA is likely to be involved in any future repair program, this can be seen as positive, particularly if the FCA shared a vision similar to HMT with respect to how a possible future reparation should be calculated.” Gary Greenwood, Shore Capital analyst, wrote in a note. “Ultimately, the situation and the potential result are subject to significant uncertainty.”

Bank of America Corp. analysts recently estimated that the industry could face up to £ 38 billion in costs linked to the motor finance saga. He discovered that Lloyds, the largest car financing provider, could be in the hook for £ 3 billion. The bank has already reserved £ 450 million ($ 589 million) to pay for possible compensation and other costs.

Close Brothers said this month that he plans to reserve a disposition in the first half of £ 165 million ($ 205 million) for possible compensation and other costs related to the case and regulatory investigation.

-With help from Philip Aldrick.

(Updates with actions of actions, the analyst comments on the third paragraph).

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