Barclays PLC Increases Provision for Motor Finance Redress Scheme

Barclays PLC has announced an increase in its provision for the Motor Finance redress scheme following the Financial Conduct Authority's (FCA) consultation paper CP25/27. The provision has been raised from £90m to £325m, with an additional charge of £235m to be recognized in Barclays' Q3 2025 results. This adjustment is expected to reduce Barclays' Common Equity Tier 1 (CET1) capital ratio by approximately 5 bps. The increase reflects the higher likelihood of more motor finance cases falling within the scope of the proposed scheme, which covers all discretionary commission arrangements. Barclays ceased lending in the motor finance market in late 2019, and the estimates include historical operations from April 2007. The final terms of the compensation scheme remain uncertain, pending responses to the consultation paper and the FCA's Policy Statement and final scheme rules, expected in early 2026. Barclays is committed to providing fair redress to motor finance customers with valid claims but believes the proposed approach does not accurately address actual customer loss. The company intends to make representations to the FCA to achieve a fair and just outcome.