Losses have escalated at a Northern Ireland car finance company after it set aside more cash for customer compensation, its latest accounts reveal.
The 2025 accounts for NIIB Group, which is owned by Bank of Ireland, show an increase in pre-tax losses from £96.3m to £170.3m — a rise of 77pc.
Total operating income for the firm, which trades as Northridge Finance, was £118.9m, up 21pc from £98.6m in 2024.
Its income statement in the accounts filed this month showed that it had made a customer redress charge provision of £231.8m in 2025, up 63pc from 2024’s provision of £143m.
It followed the release of the Financial Conduct Authority’s (FCA) Policy Statement on an industry-wide redress scheme earlier this year.
The scheme was set up to compensate people who were mis-sold a car loan between April 2007 and November 2024 because of “hidden” commission that motorists were not properly informed about when they made the agreement.
Spencer Halil, managing director of NIIB Group
NIIB is led by managing director Spencer Halil, who succeeded James McGee in 2023 following his retirement.
A spokesperson for Bank of Ireland said the increase in provision in NIIB’s accounts had already been disclosed in the Bank of Ireland Group Annual Report for 2025.
The group report states: “During the year, the group recognised €264m (£231m) customer redress charges in connection with historical commission arrangements in the Group’s UK motor finance business.”
It said there was now a total charge incurred by the group of €429m (£374m), which was its “best estimate of the redress and compensation that may be payable to impacted customers, along with programme costs that may be incurred by the group in connection with the Financial Conduct Authority (FCA) consumer redress scheme”.
NIIB Group’s accounts describe its main activities as the provision of instalment credit (hire-purchase and personal contract purchase), leasing finance and term loans for consumers and commercial customers. The company, which also owns Marshall Leasing in Cambridgeshire, says most of its business is done through motor dealers and finance intermediaries.
It was set up in Bangor, Co Down, in 1956 and bought by Bank of Ireland Group in 1984. It expanded into Scotland in 1999 and into England and Wales in 2003.
It comes as a report by consumer law firm Slater and Gordon found that around 1.1 million low-value car finance agreements will not be eligible for redress through the FCA scheme.
This is because car finance deals involving smaller amounts of commission — £120 or less for agreements before April 1, 2014, and £150 or less for after that date — are considered to be fair and are not eligible for compensation under the final rules of the scheme.
The FCA said commission amounts below these levels are unlikely to have influenced the consumers’ decision or broker’s behaviour.
But Slater and Gordon said in the majority of cases where smaller amounts were borrowed — often a few thousand pounds or less — the loan was used to buy cheaper cars or vans.
This indicates that it disproportionately impacts more financially stretched consumers, as opposed to loans being used as a top-up for more expensive vehicles.
Slater and Gordon argues that the minimum commission threshold automatically rules out agreements that may have been unfair, while also overlooking the fact that relatively small sums can make a material difference to poorer households.
But the regulator is also facing a lawsuit from three lenders — the financial services arms of carmakers Volkswagen and Mercedes-Benz and the car finance arm of French bank Crédit Agricole — who are not happy with the redress plans that are set to cost the industry £9.1bn.
The legal battle means the scheme is currently in limbo, with millions of payouts hanging in the balance, as the FCA warned of delays, changes or the potential for it to collapse.