PPI Deadline Cuts Risks But Does Not Eliminate UK Bank Troubles

December 3, 2015
by admin in PPI News

Deutsche Bank analysts said the UK’s PPI deadline brings about a reduced risk that is not enough to eliminate the threat.

Investor confidence increased with UK banks after the FCA announced a possible 2018 deadline for payment protection insurance.

The City watchdog also proposed that banks would be the ones to finance a £42.2m awareness campaign for PPI refunds.

The official statement from Deutsche Bank analysts state:

“The proposed deadline should help stop the market forecasting PPI redress into perpetuity, but is far enough out that it is unlikely to change consensus forecasts.”

The feared Plevin case implications on the current mis-sold PPI claims process left a negligible impact. The FCA once considered applying the new Plevin rules for any products not covered with the Consumer Credit Act 2006 but dropped the idea at the last minute.

The bank also said it predicts an extra £2 billion for Lloyds’ PPI charges in the next two years. About £4.1bn should see Lloyds overcoming their PPI expenses until the second quarter of 2017.

The entire UK PPI refund bill is now at £25bn with Lloyds taking up about £14b of the total.