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Barclays adds £1bn to PPI and rate hedged mis-selling bill
by Dylan Lobo on Feb 05, 2013 at 07:46
Barclays has set aside another £600 million to cover the mis-selling of payment protection insurance (PPI) and a further £400 million to cover interest rate hedged products (IRHP).
The bank, led by chief executive Antony Jenkins (pictured), told the stockmarket it was forced to increase the PPI provision as a result of a 'higher than anticipated response rate to pro-active mailings in Q4'. As a consequence the total PPI provision has increased to £2.6 billion.
There is no guarantee the increased figure will cover the final PPI redress bill. 'Based on claims experience to date and anticipated future volumes, the provision represents Barclays best estimate of expected future PPI redress payments and claims management costs,' the bank said.
'Barclays will continue to monitor actual claims volumes and the assumptions underlying the calculation of the PPI provision.'
At the same time Barclays increased its IRHP provision following an FSA report into selling practices toward small and medium size enterprises. Overall Barclays has now set aside £850 million to cover IRHP redress.
Shares in Barclays slipped 1.1p, or 0.4%, to 290.4p in early trading as the market absorbed the news.
The news comes a day after Barclays confirmed finance director Chris Lucas and legal counsel Mark Harding were standing down. Lucas is one of four current and former Barclays executives who are being investigated on the bank's relationship with the Qatar investment authority.
In a separate announcement posted on the stock exchange this morning. Barclays said it had appointed Diane de Saint Victor a non executive director to help restore the bank's image.
de Saint Victor serves as the general counsel and company secretary Swiss-based and automation technologies firm ABB. Prior to this she was held a similar post and European aerospace and defence company EADS.
Commenting on her appointment, Barclays chairman Sir David Walker said: 'Her [de Saint Victor's] background in legal and regulatory matters and in leading cultural change at ABB will bring a valuable perspective to the board as we implement the "Transform" programme and embed Barclays new purpose and values.'
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