Investing.com -- British lender, Close Brothers (F:CBRO) Group, has allocated a provision of £165 million ($205.4 million) in its first-half financial reports concerning a motor-finance commissions case.
The U.K. merchant bank disclosed on Wednesday that the eventual cost to the group could be higher or lower than the set provision.
This provision encompasses potential operational and legal expenses, as well as estimates for potential compensation for impacted customers.
Close Brothers Group expects this provision to reduce its common equity Tier 1 ratio to 12% from the 13.5% it was at on December 31.
The common equity Tier 1 ratio is a key measure of a bank’s financial strength from a regulator’s point of view.
The reduction signifies a potential impact on the bank’s financial stability, as it represents the bank’s core capital expressed as a percentage of its risk-weighted assets.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.