Core Viewpoint - The Bank of Ireland Group has increased its financial provision for compensating customers affected by motor finance agreements to approximately £350 million ($469.6 million) in response to the FCA's proposed compensation scheme [1][2]. Group 1: Financial Provision Adjustment - The revised provision reflects an increase from the previous estimate of £143 million, based on weighted scenarios and estimated costs related to the FCA redress scheme and potential legal proceedings [2]. - The group anticipates that the provision may increase significantly due to a higher number of eligible cases and the design of the redress methodology [3]. Group 2: Impact on Financial Reporting - The Bank of Ireland will incorporate any revisions into its financial reporting for the fiscal year ending in 2025, reflecting the final scheme and any additional relevant information [3]. - An increase in the provision to £350 million would impact the group's CET1 ratio, reducing it by about 35 basis points from 16.0% as of June 30, 2025 [4]. Group 3: Industry Context - Lloyds Banking Group has also responded to the car finance mis-selling issue, allocating an additional £800 million to its existing £1.15 billion provision, bringing the total to £1.95 billion [5].

Core Viewpoint - The UK's Financial Conduct Authority (FCA) has proposed a compensation scheme for approximately 14 million unfair motor finance agreements, potentially disbursing £8.2 billion ($11 billion) to affected consumers due to nondisclosure of critical information [1][2]. Group 1: Compensation Scheme Details - The proposed scheme aims to provide average payouts of about £700 per affected agreement [1]. - Eligibility includes motor finance agreements from 6 April 2007 to 1 November 2024, where a commission was paid by the lender to the broker [3]. - The scheme is designed to be a no-cost solution for consumers and more economical for companies compared to court processes [2]. Group 2: Consumer Participation and Process - Research indicates that nearly half of eligible consumers have not filed claims due to unclear eligibility criteria, while almost a quarter are uncertain about the compensation amount [2]. - Consumers are advised to lodge complaints directly with their lenders, using resources provided by the FCA, without needing claims management companies or lawyers [4]. - Once the scheme is active, lenders will contact consumers who have not complained within six months, offering a review of their cases [4][5].