ROYAL Bank of Scotland has declared there are no guarantees the costly PPI (payment protection insurance) scandal is fully behind it after setting aside a further £900 million to deal with compensation claims.
The Edinburgh-based bank, which is 62 per cent owned by UK taxpayers, was deluged with enquiries for potential claims in the run-up to the August deadline set by the financial regulator.
Finance chief Katie Murray said yesterday that the £900m was currently the bank’s “best estimate” of outstanding compensation payments, but declined to rule out further provisions.
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Royal Bank, which was prevented from collapse by a £45.5 billion bailout by the UK Government at the height of the financial crisis, had previously set aside £5.3bn for PPI claims by June 30. Its latest provision means the scandal has now cost it more than £6bn.
Ms Murray said: “It would be a very brave FD (finance director) to say the line was completely drawn under it, but this (£900m) is certainly our best estimate of that.”
So far UK banks have paid out more than £36bn in compensation for mis-selling PPI, which was commonly sold alongside products such as loans and credit cards.
The total PPI bill for Lloyds Banking Group, owner of Bank of Scotland, now stands at nearly £22bn, while total provisions made by CYBG, which owns Clydesdale Bank, are around £2.7bn.
Royal Bank said the extra provision contributed to the bank reporting a loss of £315m for the three months to September 30.
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