UK Lenders' Shares Surge After Court Ruling

Shares in major UK lenders surged after the Supreme Court delivered a favorable ruling for banks in a high-profile car finance mis-selling case, significantly reducing their potential compensation liabilities. The ruling overturned a previous judgment that could have exposed banks to collective claims of £30–44 billion, with current estimates now ranging from £9 billion to £18 billion. Lloyds Banking Group, the largest motor loan provider, saw shares rise over 7%, while specialist lender Close Brothers soared over 20%. The Financial Conduct Authority announced plans for a redress scheme, with a consultation expected by October. While banks may need to slightly increase their provisions, analysts say the outcome removes the worst-case scenario and is not materially significant for the largest players. Some claims for unusually large commissions remain possible.