The UK regulatory authority announces the final compensation plan for mis-sold auto loans; Lloyds Banking Group ( LYG.US ) halts the additional provisioning.

Zhitong Finance APP learned that Lloyds Bank (LYG.US) stated that it currently does not plan to further increase provisions for compensation related to mis-sold auto loans after UK regulators released the final, industry-wide compensation scheme this week. In a statement on Thursday, the bank said it had “assessed the impact of the final rules and their consequences,” and “currently believes no adjustment to the amount of provisions set aside for this issue is necessary.” Previously disclosed provisions at Lloyds Bank were close to 2 billion pounds (about $2.6 billion), the highest among known peers.

It is understood that the UK Financial Conduct Authority (FCA) expected in October last year that some of the largest auto-loan lenders in the UK would pay about 8.2 billion pounds to compensate affected customers. To launch the refund program, lenders would also bear additional costs of about 2.8 billion pounds, bringing total costs to about 11 billion pounds.

However, the FCA currently expects that lenders will pay total compensation of 7.5 billion pounds, and the cost of running this “simplified” compensation scheme is about 1.6 billion pounds. This means the scheme will cost the industry a total of 9.1 billion pounds, lower than the previously forecast 11 billion pounds.

Lloyds Bank’s response indicates that it will heed the FCA’s call and move forward with the revised plan rather than launching a legal challenge. For months, the industry has argued that regulators’ original proposal was too strict and failed to properly consider a ruling by the UK Supreme Court last year—made in August last year in favor of lenders. The court ruled that banks only need to pay compensation when they find “the most serious misconduct.” At the time, many bank analysts and investors believed this ruling would provide significant relief for lending institutions.