It was recently reported that Santander UK faces a further £500m deficit for its payment protection insurance misgivings in the past. Now, RBS follows suit as it announces an additional £500m for its own PPI troubles.
RBS faces massive fines and legal costs as it faces civil litigation from US regulators due to its toxic mortgage selling business in the US, which it sold a few years before the 2008 financial crisis.
In total, it will lose £2.5 million in profit to address legal costs. Total misgivings costs, which include PPI, puts RBS at a £3.8 billion total, modestly lower relative to other high-street UK banks.
Lloyds has earmarked a further £2.5 billion allocation to its payment protection insurance bill. Lloyds currently takes half of the bill with £15. Experts estimate the total to reach £34 billion. By the end of the PPI claims deadline, experts estimate the total bill to reach about £42 million, making PPI the UK’s worst financial scandal in its history.
The FCA is to set a PPI claims deadline after it ends its consultation with customers, the banking industry and claims management companies on effectively advertising PPI claims to guarantee that majority or all customers mis-sold PPI had made a claim.