MotoNovo owner FirstRand is to exit the UK motor finance market in response to the FCA redress scheme which it said was “deeply flawed, disproportionate and unfair.”
The bank acknowledged that the FCA has made some changes to the scheme, in response to issues raised by the group and other lenders during the consultative period but said it was not enough.
In a statement to shareholders, it said: “FirstRand remains firmly of the view that for the group the final redress scheme proposed by the FCA is disproportionate and unfair.
“The group has done everything in its power to protect shareholders from a redress scheme that it considers deeply flawed in its construction.”
First Rand said the scheme went against the FCA’s original guiding principles of fairness to consumers and lenders.
It also said the outcome on “market integrity” was against the guiding principle and it was “extremely disappointed” with this outcome.”
It said whilst the group believes that Aldermore Bank is a “resilient and sustainable business” within the current UK finance environment it would not deliver the returns the group requires, hence the sale of the business.
“FirstRand reiterates its view that the FCA scheme significantly and inappropriately diverges from the Supreme Court ruling and therefore the group’s legal rights remain reserved.”
