National Australia Bank (NAB) warned it may have to provision charges of up to £500m in its full-year results to compensate customers for mis-sold insurance products in the UK.
NAB reported potential Payment Protection Insurance (PPI) liabilities of £290m to £420m, with potential interest rate hedging product redress in the range of £60 to £80m.
The bank said the costs were already covered by the £1.7bn in bank capital it has positioned to cover misconduct charges from its UK-owned assets Clydesdale and Yorkshire Bank.
NAB plans to sell its UK banking operations with a full update expected in the company’s 2015 full-year results.
Yesterday, the Sunday Times reported UK banks bracing for another wave of multi-billion pound payouts after a landmark legal ruling last year, although the scale of the ruling’s impact is still uncertain.
The court decision hinges on the fact the customer was unaware of the commission level which went to her lender, Paragon Personal Finance and the broker that arranged the contract.
The Financial Conduct Authority is due to rule on how widely the banks should apply the ‘Plevin ruling’ by the end of the summer.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
