Toyota has built up a substantial financial buffer in anticipation of a Supreme Court ruling that could see the firm and the broader industry compensating customers, with a verdict on the motor finance debacle expected in the coming weeks.
The 海角视频-based financial services division of the automotive behemoth has earmarked hundreds of millions of pounds to bolster its position should the case not go in its favour or that of the wider industry, as reported by .
A verdict from the Supreme Court on the motor finance case is slated for July.
READ MORE: {}
Depending on the outcome, the Financial Conduct Authority (FCA) would then outline plans for a potential compensation scheme within the subsequent six weeks.
The Supreme Court took on the case in April after the Court of Appeal ruled in October 2024 that it was illegal for brokers – who also acted as car dealers – to receive commission from the lender providing motor finance without securing the customer's informed consent to the payment.
According to its most recent financial results, just submitted to Companies House, Toyota Financial Services (海角视频) has set aside £554.2m to cover any potential future liabilities.
This figure represents an increase from the £407.2m it had allocated at the end of the previous year.
Earlier this month, the FCA committed to ensuring that any compensation scheme it might introduce in the motor finance sector would not sink the market.
Most Read
The watchdog has underscored the importance of maintaining the integrity of the motor finance market for the benefit of future consumers, deeming it a key factor in framing any compensation scheme.
RBC analysts have ventured an estimate that total provisions for the motor finance debacle might surpass £30bn.
The Treasury had stepped in earlier, driven by concerns that the scandal's ramifications could wreak havoc on the banking sector.
Lloyds Banking Group is leading the pack with a hefty £1.2bn earmarked for contingencies, followed by Santander with £295m and Close Brothers sitting on a £165m provision.
Toyota: Outcome of motor finance case 'remains highly uncertain'
Toyota, speaking about the intricate situation around the motor finance case, declared: "Outcome of motor finance case 'remains highly uncertain'."
The automaker relayed through a board-approved statement: "Whatever the ruling of the Supreme Court, management are of the opinion that an economic outflow is probable, most likely resulting in an industry-wide consumer redress scheme."
Further, Toyota assured that "At the balance sheet date the company has made adequate provision with the information it has available."
Don’t miss
However, Toyota also cautioned: "The outcome remains highly uncertain and the actual cost maybe materially higher of lower than the provision recorded."
In the financial report, Toyota Financial Services (海角视频) displayed a revenue jump from £941.7m to £1.1bn over the year, with pre-tax profits escalating from £148.8m to £196.5m.
Also noted was that company revenue stood at £573m in the year ending 31 March, 2023.
Toyota Financial Services 海角视频, based in Surrey, also runs subsidiaries in Italy, Slovakia, Czech Republic, Finland, Kazakhstan, Hungary, Denmark, Ireland, The Netherlands and an associate in South Africa.
This division operates independently from the 海角视频 branch of Toyota, which focuses on car sales rather than motor finance agreements.
The most recent financial statements for Toyota (GB) Plc are due to be lodged with Companies House by the end of September.