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Close Brothers has warned it will not pay a dividend this year, with future payments under consideration as British lenders wary of a possible hit from a regulatory probe into car financing deals. .
Last month, the Financial Conduct Authority announced it would investigate fees on car loan transactions dating back 10 years, saying the arrangements gave lenders and dealers incentives to raise the interest rates they charged customers.
Close Brothers said in a statement on Thursday: “There is significant uncertainty in the outcome of the FCA's review and the timing, extent and amount of the potential financial impact on the group cannot be estimated with certainty at this time.” Ta.
Close Brothers shares have fallen sharply since the FCA announced its investigation, falling 11% in early trading.
Given the need to plan for a range of outcomes, Close Brothers said: “We do not intend to pay a dividend on ordinary shares this year and, subject to the FCA's decision, will reinstate the dividend from financial year 2025 onwards.'' will be considered.” Process terminated. ”
The FCA launched the investigation following a surge in customer complaints about deals entered into before 2021, when the regulator banned discretionary fee arrangements that allowed car dealers to set interest rates on customer contracts.
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