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Lloyds takes £450m provision over FCA car finance probe

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Lloyds Banking Group has set aside £450m to cover the potential costs of regulatory investigations into historic car finance fee arrangements.

The Financial Conduct Authority last month said it would investigate discretionary fees on car finance deals dating back a decade, saying the deals gave incentives to lenders and dealers to increase the interest rate charged to customers.

Analysts fear the probes could end up costing the industry billions of pounds. Lloyds owns Black Horse, the UK’s largest car finance provider.

Lloyds announced the provision on Thursday alongside its fourth-quarter results. The UK’s largest lender said underlying profits before tax fell to 1.7 billion pounds in the final quarter of the year, in line with analysts’ forecasts. For the full year, profits came in at £7.8 billion, also in line with expectations.

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