South African banking giant taking R17 billion UK hit on the chin

FirstRand has informed shareholders that it does not plan to legally challenge a proposed redress scheme in the United Kingdom that has seen the bank raise provisions of £750 million (around R16.79 billion).

The group said this is despite there being legal grounds for a challenge. However, without the participation of other UK lenders, a legal challenge would not be in shareholders’ best interests.

This announcement comes after FirstRand informed shareholders on 7 April 2026 that the UK Financial Conduct Authority (FCA) had finalised its proposed redress scheme.

The matter arose from a dispute surrounding transparency concerns in how dealers earn commissions from lenders, including JSE-listed banking group FirstRand.

FirstRand owns FNB, RMB and WesBank, and operates in South Africa, the United Kingdom, and various other markets.

FirstRand also owns Aldermore, a UK specialist lender and savings bank, as well as MotoNovo, which forms part of the Aldermore Group and is one of the UK’s fastest-growing independent vehicle finance companies.

In 2024, the UK’s Court of Appeal found that FirstRand and other lenders unlawfully arranged motor finance deals without properly disclosing commissions paid to car dealers. 

The lenders were also accused of not obtaining fully informed consent from customers.

While this decision was appealed and partially overturned, the UK Supreme Court upheld one “unfair relationship” ruling.

Based on this ruling, the UK’s financial regulator, the FCA, proposed a redress scheme for commission practices in the UK motor finance industry.

FirstRand has repeatedly stated its belief that the final redress scheme proposed by the FCA is “disproportionate and unfair”.

Regardless, the group has now raised provisions totalling £750 million, or just under R17 billion.

When the final redress scheme was first announced, FirstRand said the business case for owning and operating a UK consumer finance entity is no longer within the group’s risk appetite.

In a notice to shareholders released on Tuesday, 28 April, FirstRand reiterated this belief, saying it continues to regard the scheme as unfair and disproportionate.

“Whilst there are legal grounds for challenge, without the participation of a meaningful cohort of other UK lenders, such an undertaking by the group would not be in the best interest of its shareholders,” FirstRand said.

It added that this is particularly the case considering the level of ongoing uncertainty that pursuing a legal challenge would create.