LONDON — Close Brothers plans to axe up to 600 jobs [1] as the financial institution's share price takes a dive and mounting pressure over its ties to the UK car finance scandal and surging car finance claims emerges. The lender has been accused of exposure to car finance mis-selling and large-scale car finance compensation 2026 expectations.

The job cuts form part of a broader effort to reduce costs following a turbulent period for the bank, which has been targeted by a short seller questioning whether it has set aside enough funds to deal with future liabilities.

Shares hit by short seller attack and rising uncertainty

Close Brothers’ shares have fallen significantly in recent days after the short seller raised concerns about the bank’s financial provisions tied to motor finance lending [2]. The report deemed that potential costs linked to car finance claims and PCP claims could be higher than previously estimated.

The market has moved fast, with investors reviewing risks to lenders over historic mis-selling of car finance. The bank has argued that its provision was based on the current picture, but it is still a question mark over new car finance claims.

Job cuts reflect mounting financial pressure

The decision to reduce around 600 roles signals the growing strain on the business [3] as it prepares for a possible wave of compensation claims. Analysts say the move highlights how seriously lenders are taking the issue as the car finance scandal develops.

For many institutions, the concern is not just current claims but the potential scale of future car finance claim and PCP claim cases over mis-sold car finance issues, which could result in substantial financial outflows in the coming years.

Drivers pursue refunds as PCP claims increase

At the centre of the controversy are PCP claims, tied to Personal Contract Purchase agreements widely used across the UK car market. Regulators are examining whether customers were fully informed about commission structures when taking out finance deals.

As awareness grows, more drivers are coming forward with car finance claims, with many seeking a car finance refund or pcp refund after discovering how their agreements were structured.

Legal experts say the number of claims is rising steadily, increasing the likelihood of widespread car finance compensation across the sector.

Wider banking sector under scrutiny

Close Brothers is one of several lenders facing pressure as regulators investigate whether commission-driven practices led to systemic car finance mis-selling.

Millions of historic agreements could be affected, raising concerns about the scale of the car finance scandal. Financial institutions are reviewing their exposure while preparing for further increases in car finance claims.

Some lenders have already strengthened their financial provisions, while others may need to follow if claim volumes continue to grow.

Focus turns to payouts 2026 timeline

Focus has now turned to how long it will take for claims to be settled and what the final bill will be for lenders. Payouts 2026 have been highlighted as a potential landmark moment when a large number of cases could be settled.

Should thousands of claims be successful, the industry could be looking at a huge bill for car finance compensation, with mass car finance refund and PCP refund payments being made.

For consumers, the news has highlighted the growing opportunity to have past agreements overturned, prompting for a car finance refund check, as the full impact of the car finance scandal begins to be felt in the UK’s financial system.

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References:

1. Close Brothers plans to axe up to 600 jobs - https://www.telegraph.co.uk/business/2026/03/16/close-brothers-short-seller-wipeout-car-finance-scandal/ 
2. Close Brothers’ shares have fallen significantly in recent days after the short seller raised concerns about the bank’s financial provisions tied to motor finance lending - https://www.thisismoney.co.uk/money/markets/article-15653287/Troubled-Close-Brothers-axes-600-jobs-grapples-car-finance-scandal-attack-notorious-short-seller.html 
3. The decision to reduce around 600 roles signals the growing strain on the business - https://www.theguardian.com/business/2026/mar/17/close-brothers-banking-group-cut-jobs-car-finance-shares