According to Risk.net’s analysts, UK’s banks are still underestimating the costs of mis sold PPI. Banks have estimated the mis selling scandal never to reach £10 billion. However, today’s total has now reached £27 billion.
In the first to the second quarter of 2014, Barclays and Lloyds have paid out £900 and £600 million for compensation respectively. Meanwhile, Lloyds’ provisions had increased in the third and fourth quarter, multiplied by five against other banks.
Lloyds said they expect to receive 0.6 million further PPI complaints based on their provision last December.
Meanwhile, the rest of the UKs banks will have to use their revenues to repay their PPI compensation bills.
The Financial Ombudsman admits that there are lower PPI numbers per week. However, the difficulty of the cases have increased.
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