The Royal Bank of Scotland will set aside £400m more for payment protection insurance mis selling and rate-rigging. RBS’ announcement comes after Barclays announced that it would add a provision for PPI and rate-rigging.
RBS total addition is at £780m for litigation and conduct costs in the third quarter. It will also pay an additional £100m for the PPI scandal that cost it £3.3 billion so far.
Despite its losses and scandals, RBS’ investors are encouraged by its performance as its finances improved effectively. It has created a £1.3 billion profit to the end of September and only created a loss of £634 in the same period the previous year. Economists see that Ulster Bank, RBS’ subsidiary, had much to play for RBS.
Ulster Bank had £16.7 billion in losses due to bad loans since the financial crisis. Ireland’s boost in property prices had helped prop up profits of more than £382 million in the third quarter, up by £336 million in the previous three months.
Economists said that these large credits helped mask RBS’ dire performance. However it shows potential to recover swiftly and effectively in the months to come. RBS Chief Ross McEwan said that RBS still faces further ‘bumps on the road’.