Mortgage News
UK bank PPI costs could rise to £10bn
Bankers suggest Payment Protection Insurance (PPI) compensation payments and costs could rise to £10bn, more than double the regulator’s original estimate of £4.2bn.
Lloyds Banking group reported it had made a provision of £3.2bn for PPI claims yesterday, according to The Telegraph, analysts at Deutsche Bank suggest banking industry claims could rise to £8bn.
Oliver Morgans, a spokesman from Consumer Focus called the PPI situation “mis-selling on an epic scale.”
“Every bank involved must now accept the consequences of their actions and give speedy redress to all affected customers.”
Claims against Barclays and Royal Bank of Scotland, which had the biggest market shares in the PPI business after Lloyds, could cost the banks £1.13bn and £1bn respectively, according to Deutsche Bank, though some analysts say they could be forced to make even bigger payouts of as much as £1.6bn.
The British Bankers’ Association (BBA) last month lost a judicial review against an attempt to overturn new rules on the sale of PPI. The BBA has until Tuesday to launch an appeal against the verdict. However, Lloyds said it would not be backing the appeal.
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Lloyds Banking Group chief executive Antonio Horta-Osório said: “I don’t want to continue a long-running dispute with our regulator.”