Close Brothers face scrutiny over car loan bonuses amid FCA probe

Close Brothers, a merchant bank, has faced scrutiny due to a Financial Conduct Authority investigation into its car loan practices. As a result of this inquiry, senior executives at the bank, including Chief Executive Adrian Sainsbury and Finance Chief Mike Morgan, have forfeited their annual bonuses. Sainsbury was eligible for a bonus of £252,328, while Morgan was in line for £151,939. The decision to withhold bonuses was made in recognition of the shareholders' experience amid concerns over potential compensation claims from borrowers. Despite the loss of bonuses, Sainsbury's total compensation for the year was approximately £1.2 million, and Morgan received around £705,000. The bank's remuneration committee and executive directors agreed on this course of action to align with the ongoing regulatory scrutiny and the potential financial implications it may bring. The inquiry raises concerns about a significant compensation bill that could impact the bank's financial standing. The investigation into Close Brothers' car loan practices highlights the increasing regulatory pressures faced by financial institutions in the UK. As the Financial Conduct Authority continues its probe, the bank's leadership is under pressure to ensure compliance and address any issues that may arise from the inquiry. This situation reflects broader trends in the financial sector, where regulatory oversight is becoming more stringent. In conclusion, the decision to forgo bonuses underscores the bank's commitment to accountability and transparency in light of the ongoing investigation. The outcome of the FCA inquiry will be crucial for Close Brothers, as it navigates the potential repercussions and strives to maintain its reputation in the financial market.