Deutsche Bank Analysts view the PPI deadline as a risk-reduction. They said the market forecasting for PPI redress can be underlined.
PPI is the UK’s biggest insurance scandal with over millions of Britons ineligible to claim for benefits given their initial ineligibility for the financial product. Deutsche Bank notes that only tail risks are removed from the scenario.
Deutsche Bank’s analysts also predict banks may pay out billions of pounds more for mis-sold PPI in the next two years before the 2018 deadline. It continues to retain its ‘buy’ rating on Lloyds and Barclays.
The analysts slated Lloyds to pay £2bn more for mis-sold payment protection insurance.
The Financial Conduct Authority is consulting with consumers, claims representatives and financial institutions regarding the best methods to introduce a PPI claim deadline. Banks and financial institutions will finance a £42.2m advertising campaign to inform majority of Britons about how to claim refunds from mis-sold payment protection insurance.
The move was criticised by consumer groups Which? and MoneySavingExpert.com as ruling in favour of banks. The two groups blame the banks for having “undeserved relief” from the FCA. Which? blames banks for being the ones who plunged the UK in the insurance scandal.
Over £24b had been earmarked for payment protection insurance.