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Santander UK sets aside £213m to cover claims

Santander UK sets aside £213m to cover claims

Santander UK has made a £213 million provision for potential claims relating to its investment advice and non-payment protection insurance claims.

The provision, for possible remediation and enforcement action, comes as bank released strong results for the first quarter of the year, as pre-tax profits hit £426 million, compared to the £282 million for the first quarter in 2013.

In March 2014, the Financial Conduct Authority imposed a £12.4 million fine on Santander UK after it uncovered 'serious failings' within the bank's advice procedure and said that its approach to considering investors' risk appetites was 'inadequate'.

In its quarterly management statement ending in 31 March, Santander said it placed a provision to cover the fine and possible related customer remediation.

‘At the end of March 2014, £213 million of non-PPI related conduct provisions was held for possible remediation and enforcement actions in relation to retail investments, interest rate hedging and card protection plan,’ it said.

The bank also said it has reviewed and ‘fundamentally’ changed its branch-based investment advice service.

Provisions for other liabilities and charges in the last quarter of 2013 include regulatory costs of £118 million, which included the Financial Services Compensation Scheme levy.

In March 2013 Santander shut down its UK investment advice division, which contained 800 advisers, as a result of the regulator's mystery shopping results in December 2012.

Santander also put aside a £137 million provision in December 2013 for payment protection insurance.

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