Regulator’s car loan review entangles banks

Foresight: A Lloyds Bank branch in London. The UK’s biggest auto finance provider has set aside US$570mil for possible compensation and other costs linked to the review, becoming the first major firm to take a charge. — Bloomberg

LONDON: United Kingdom banks gave investors reasons to be optimistic about their earnings over the past few days. But one key unknown won’t go away anytime soon: the ultimate cost of potentially mis-sold car finance.

The Financial Conduct Authority’s (FCA) review of commissions for car loans remains a major drag on domestic lenders’ valuations, according to UBS analyst Jason Napier.