RBS has set aside additional £3bn to cover PPI Claims and other financial services.

rbs-ppi-claimsThe 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.

Guardian PPI CLaims

“A further £500m provision for interest rate hedging products redress and administration costs. The increase in provision reflects both higher volumes and anticipated redress payments, recalibration of our methodology based on experience during Q4 2013, and additional administration charges. The cumulative provision, including expenses, was £1.25bn at 31 December 2013.”

Chief executive Ross McEwan said: “At the peak of the financial crisis, RBS was the biggest bank in the world.

“When the crisis broke the bank was involved in a number of different businesses in multiple countries that have subsequently faced heavy scrutiny by customers and regulators.

“The scale of the bad decisions during that period means that some problems are still just emerging. The good news is we are now a much stronger bank and can manage these costs while still supporting our customers.”

The bank also confirmed that its executive committee would not receive bonuses for their performances in 2013. The announcement applies to eight senior employees; Mr McEwan has already said he would not take a bonus for 2013 or 2014.

Guardian PPI CLaims

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