UK’s Secure Trust Bank Takes £28M Hit Over Motor Finance Mis-Selling Probe

Secure Trust Bank has increased its provision for a potential penalty related to a UK motor finance mis-selling investigation. The bank added £28 million to its reserves, bringing the total provision on this issue to £44 million.

The Financial Conduct Authority (FCA) is currently reviewing historic car finance commission deals. Regulators are checking if lenders and dealers pushed customers into more expensive loans to earn higher commissions.

Secure Trust said the extra money set aside reflects new information shared by the FCA and the growing uncertainty over the final cost. The bank stressed that this is still an estimate, as the review has not yet concluded.

The mis-selling inquiry has already triggered large provisions across the industry. Big lenders like Lloyds and Barclays have booked billions in similar cases, preparing for possible compensation claims.

Secure Trust assured investors that its capital remains strong despite the new charge. However, analysts said the timing and size of future payouts remain unclear until regulators release final findings.

The FCA is expected to announce its decision in the coming months. If compensation is ordered, it could affect millions of UK borrowers who took out car loans over the past decade.