Lloyds has announced it will be increasing its allowance for the mis-selling of Payment Protection Insurance (PPI) by another £1.8bn, forecasting at least another 550,000 successful claims still to be made.
Lloyds’ PPI costs now total a potential £9.825bn. For all banks the bill is approaching £20bn.
George Culmer, Lloyds’ finance director, said predicting the cost of PPI was “fiendishly hard” but that the bank though it had got the numbers right this time. Continue reading
The statement outlined funds to redress complaints related to mortgages and securities, payment protection insurance and interest rate hedging products.
RBS said: “The Board of RBS has decided to provide £1.9bn covering various claims and conduct related matters affecting group companies, primarily those related to mortgage-backed securities and securities related litigation, following recent third-party litigation settlements and regulatory decisions.
“An additional £465m provision for payment protection insurance redress and related costs. Q4 2013 claims experience has continued at previous rates (c. £225m per quarter) rather than declining as anticipated and claims are now expected to continue for a longer period.
“The cumulative provision is £3.1bn, of which £2.2bn had been utilised at 31 December 2013. The remaining provision of £0.9bn covers approximately 12 months of redress and administrative expenses. Continue reading
New research has shown that there are at least two million people still to make a legitimate PPI claim, many of which stand to reclaim thousands of pounds in compensation.
About 34m PPI policies have been sold since 2001. Around £17bn so far bas been set aside by the banks and building societies in compensation. The final bill for the banks is expected to top £20bn.
The Financial Ombudsman Service (FOS) is also expecting to tackle around 320,000 new Payment Protection Insurance (PPI) claims in 2014. In their 2014/15 plan the FOS indicated that they will tackle approximately 1.8 million front-line consumer queries.