Company: LLOBF
Filing Date: 2025-07-24
Form Type: 6-K
Source: 0001160106-25-000034
Chunk: 61

Company: Lloyds Banking Group plc
Filing Date: 2025-07-24
Form: 6-K
Chunk 61
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 fines. The Group also receives complaints in

connection with its past conduct and claims brought by or on behalf of current and former employees, customers

(including their appointed representatives), investors and other third parties and is subject to legal proceedings

and other legal actions from time to time. Any events or circumstances disclosed could have a material adverse

effect on the Group’s financial position, operations or cash flows. Provisions are held where the Group can reliably

estimate a probable outflow of economic resources. The ultimate liability of the Group may be significantly more,

or less, than the amount of any provision recognised. If the Group is unable to determine a reliable estimate, a

contingent liability is disclosed. The recognition of a provision does not amount to an admission of liability or

wrongdoing on the part of the Group. During the half-year to 30 June 2025 the Group charged a further £ 37 million

in respect of legal actions and other regulatory matters and the unutilised balance at 30 June 2025 was £ 1,457

million (31 December 2024 : £ 1,600million ). The most significant items are outlined below.

Motor commission review

The Group recognised a £ 450 million provision in 2023 for the potential impact of the FCA review into historical

motor finance commission arrangements and sales announced in January 2024. In the fourth quarter of 2024, a

further £ 700million provision was recognised in relation to motor finance commission arrangements, in light of the

Court of Appeal (CoA) decisions handed down in their judgment in Wrench, Johnson and Hopcraft (WJH) in

October 2024, which goes beyond the scope of the original FCA motor finance commissions review.

The CoA judgment in WJH determined that motor dealers acting as credit brokers owe certain duties to disclose to

their customers commission payable to them by lenders, and that lenders will be liable for dealers’ non-disclosures.

This sets a higher bar for the disclosure of and consent to the existence, nature, and quantum of any commission

paid than had been understood to be required or applied across the motor finance industry prior to the decision.

The Group’s understanding of compliant disclosure was built on FCA and other regulatory guidance and previous

legal authorities. These CoA decisions relate to commission disclosure and consent obligations which go beyond

the scope of the current FCA motor finance commissions review. The Supreme Court granted the relevant lenders

permission to appeal the WJ