A major bank has vowed to leave the UK after Rachel Reeves introduced an "unfair" scheme that will see its car finance compensation payouts soar to £750million. FirstRand has decided to quit the UK after blasting the Financial Conduct Authority's (FCAs) car finance ruling as "disproportionate and unfair".

It is now expected to exit from its ‌UK challenger bank Aldermore, with the business expected to be put up for sale. FirstRand Bank owns car finance service MotoNovo, one of the largest lenders in the UK. The business is expected to pay out a whopping £750million in compensation this year to motorists who were mis-sold car finance.

The bank has revealed it will need to take an additional £510million in provisions to pay all motorists who are entitled to compensation payouts. The lender confirmed their position in statement to the Johannesburg Stock Exchange after undertaking a comprehensive assessment of the FCA statement.

FirstRand said: "The legal teams and economic specialists that provided input to the FCA's consultative process have also reviewed the Statement.

"FirstRand acknowledges that whilst the FCA has made some changes to the scheme, that can be viewed as responses to issues raised by the group and other lenders during the consultative period, any mitigation arising from these changes has been more than offset by other amendments.

"These amendments are problematic in that they result in a financial impact above the group's expectations. Therefore, FirstRand remains firmly of the view that for the group the final redress scheme proposed by the FCA is disproportionate and unfair."

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