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Banks' PPI mis-selling redress set to hit £25bn
by Daniel Grote on Jan 07, 2013 at 08:19
Banks are likely to be forced to pay £25 billion in redress for payment protection insurance mis-selling, nearly double the amount they have set aside, according to The Times.
It said calculations using the Financial Services Authority's (FSA) monthly PPI payout figures and historic selling data showed the final banks would dwarf the £13 billion currently set aside.
The jump comes after the FSA ordered banks to write to customers sold PPI to invite them to consider claims. It suggests big increases to bank provisions in their third quarter results last year to do account for the scale of the problem. In November Lloyds Banking Group increased its provision by £1 billion to £5.3 billion, Barclays set aside a further £700 million, and Royal Bank of Scotland hiked its provision by £400 million to £1.7 billion. HSBC raised its provision for British 'customer redress programmes' - largely due to PPI selling - by $553 million to $2.1 billion.
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