Banks to Lose £5bn More For PPI Claims

January 27, 2016
by admin in PPI News

News sources said major UK lenders still face higher refund contributions for payment protection insurance. Sources estimate a £5 billion collective total, with PPI refund-battered Lloyds having to contribute half to the approximate total.

Other banks include major high street lenders HSBC, Royal Bank of Scotland, Santander UK and Barclays.

Analysts were quick to say it was not a direct effect of the imminent PPI deadline in 2018. The City watchdog is yet to finish its public consultation by February 2016.

They said once the FCA finishes its consultation, lenders may need to add a “semi” final addition to the PPI compensation package.

Estimates for 2017 involve an additional £5 billion, which may bring to £37 billion the total PPI mis-selling bill for the entire UK finance industry.

Lloyds is believed to shoulder about £2.5 billion of the newest estimated loss for the insurance scandal. Currently, the high street bank takes about half the £27 total with £14.5 billion refunded to consumers for PPI.

PPI is the UK’s biggest financial scandal having been mis-sold to almost half the UK’s consumer population. Bank employees had mis-sold PPI to individuals initially ineligible for the insurance’s provisions.

Banks are currently lobbying to reduce the two-year deadline to 12 months, a request which the Financial Conduct Authority is yet to fulfil.