Lloyds shares jump 8% as UK car finance ruling brings sector relief

Shares of Lloyds were 8% higher at 12:40 p.m. in London, as analysts said the British bank and other lenders had avoided a worst case scenario in Friday’s U.K. Supreme Court ruling on a massive missold motor finance loan case which had rocked the industry.

Analysts at RBC Capital Markets called the decision a “clearing event for the bank” in a Monday note, and said they expect the Financial Conduct Authority to take a “moderate approach when laying out its final redress scheme.”

“This wasn’t a complete win for the industry, with lenders still potentially on the hook if the relationship with customers meets the threshold of being unfair,” AJ Bell’s Investment Director Russ Mould said in emailed comments.

“Lloyds has notably confirmed any further provisions in this area are unlikely to be material,” he said. “While this issue could still cause some damage, it looks unlikely to be a repeat of the PPI scandal which blighted the banking industry in the 2010s.”