
Provisions for financial commitments and guarantees £m1		Regulatory and legal provisions £m	Other £m	Total £m

At 1 January 2025	270	1,600	443	2,313
Exchange and other adjustments	1	2	(2)	1
Provisions applied	–	(182)	(278)	(460)
(Credit) charge for the period	(49)	37	334	322
At 30 June 2025	222	1,457	497	2,176

In the course of its business, the Group is engaged on a regular basis in discussions with UK and overseas regulators

and other governmental authorities on a range of matters, including legal and regulatory reviews and, from time to

time, enforcement investigations (including in relation to compliance with applicable laws and regulations, such as

those relating to prudential regulation, consumer protection, investment advice, employment, business conduct,

systems and controls, environmental, sustainability, competition/anti-trust, tax, anti-bribery, anti-money

laundering and sanctions). Any matters discussed or identified during such discussions and inquiries may result in,

among other things, further inquiry or investigation, other action being taken by governmental and/or regulatory

authorities, increased costs being incurred by the Group, remediation of systems and controls, public or private

censure, restriction of the Group’s business activities and/or fines. The Group also receives complaints in

connection with its past conduct and claims brought by or on behalf of current and former employees, customers

(including their appointed representatives), investors and other third parties and is subject to legal proceedings

and other legal actions from time to time. Any events or circumstances disclosed could have a material adverse

effect on the Group’s financial position, operations or cash flows. Provisions are held where the Group can reliably

estimate a probable outflow of economic resources. The ultimate liability of the Group may be significantly more,

or less, than the amount of any provision recognised. If the Group is unable to determine a reliable estimate, a

contingent liability is disclosed. The recognition of a provision does not amount to an admission of liability or

wrongdoing on the part of the Group. During the half-year to 30 June 2025 the Group charged a further £37 million

in respect of legal actions and other regulatory matters and the unutilised balance at 30 June 2025 was £1,457

million (31 December 2024: £1,600 million). The most significant items are outlined below.

The Group recognised a £450 million provision in 2023 for the potential impact of the FCA review into historical

motor finance commission arrangements and sales announced in January 2024. In the fourth quarter of 2024, a

further £700 million provision was recognised in relation to motor finance commission arrangements, in light of the

Court of Appeal (CoA) decisions handed down in their judgment in Wrench, Johnson and Hopcraft (WJH) in

October 2024, which goes beyond the scope of the original FCA motor finance commissions review.

The CoA judgment in WJH determined that motor dealers acting as credit brokers owe certain duties to disclose to

their customers commission payable to them by lenders, and that lenders will be liable for dealers’ non-disclosures.

This sets a higher bar for the disclosure of and consent to the existence, nature, and quantum of any commission

paid than had been understood to be required or applied across the motor finance industry prior to the decision.

The Group’s understanding of compliant disclosure was built on FCA and other regulatory guidance and previous

legal authorities. These CoA decisions relate to commission disclosure and consent obligations which go beyond

the scope of the current FCA motor finance commissions review. The Supreme Court granted the relevant lenders

permission to appeal the WJH judgment and the substantive hearing concluded on 3 April 2025. As of 23 July 2025,

NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS (UNAUDITED) (continued)

Following the WJH decision delivered by the CoA, the FCA extended its temporary complaint handling rules in

relation to discretionary commission arrangements (DCA) complaints to include non-DCA commission complaints

until December 2025. In June 2025, the FCA announced that it will confirm within six weeks of the Supreme Court

decision whether it intends to propose a redress scheme and its timeframe for consultation on that scheme. In

addition, there are a number of other relevant judicial proceedings which may influence the eventual outcome,

including a judicial review (which is now subject to appeal) of a final decision by the Financial Ombudsman Service

The Group continues to receive complaints as well as claims in the County Courts in respect of motor finance

commissions. A large number of those claims have been stayed, as has a claim in the Competition Appeal Tribunal.

In establishing the provision estimate, the Group has considered a number of scenarios to address uncertainties

around a number of key assumptions. These include a range of potential Supreme Court outcomes, regulatory

responses including steps that the FCA may take, and outcomes in relation to redress. Other key assumptions

include applicable commission models, commission rates, time periods, response rates, uphold rates, levels of

redress / interest applied and costs to deliver. The Group will continue to assess developments and potential

impacts, including the outcome of the appeals, any announcement by the FCA of their next steps, and any action

by other regulators or government bodies. The ultimate financial impact will be determined by a number of factors

still to be resolved, in particular the FCA response and any potential redress as well as any broader implications of

the judgment, and accordingly could materially differ from the amount provided.

The Group continues to apply the recommendations from Sir Ross Cranston’s review, issued in December 2019,

including a reassessment of direct and consequential losses by an independent panel (the Foskett Panel), an

extension of debt relief and a wider definition of de facto directors. The Foskett Panel’s full scope and

methodology was published on 7 July 2020. The Foskett Panel’s stated objective is to consider cases via a non-

legalistic and fair process and to make its decisions in a generous, fair and common sense manner, assessing claims

against an expanded definition of the fraud and on a lower evidential basis.

In June 2022, the Foskett Panel announced an alternative option, in the form of a fixed sum award which could be

accepted as an alternative to participation in the full re-review process, to support earlier resolution of claims for

Virtually all of the population have now had decisions via the Fixed Sum Award process, with operational costs,

redress and tax costs associated with the re-reviews recognised within the amount provided.

Notwithstanding the settled claims and the increase in outcomes which builds confidence in the full estimated

cost, uncertainties remain and the final outcome could be different. There is no confirmed timeline for the

completion of the re-review process nor the review by Dame Linda Dobbs. The Group remains committed to

The Group continues to challenge PPI litigation cases, with mainly operational costs and legal fees associated with

litigation activity recognised within regulatory and legal provisions.

Customer claims in relation to insurance branch business in Germany

The Group continues to receive claims from customers in Germany relating to policies issued by Clerical Medical

Investment Group Limited (subsequently renamed Scottish Widows Limited), with smaller numbers of claims

received from customers in Austria and Italy. Operational costs, redress and legal fees associated with the claims

The Group carries provisions of £125 million (31 December 2024: £154 million) in respect of dilapidations, rent

Provisions are also made for staff and other costs related to Group restructuring initiatives at the point at which

the Group becomes committed to the expenditure; at 30 June 2025 provisions of £218 million (31 December 2024:

The Group carries provisions of £37 million (31 December 2024: £35 million) for indemnities and other matters

relating to legacy business disposals in prior years. Whilst there remains significant uncertainty as to the timing of

the utilisation of the provisions, the Group expects the majority of the remaining provisions to have been utilised