Royal Bank of Scotland has set aside another £1.1 billion ($1.667 billion) to compensate customers for mis-selling two types of products, and rivals are expected to increase their provisions too in the coming days.
UK banks have set aside more than £12 billion [$18.2 billion] to compensate customers for payment protection insurance (PPI), making it Britain’s biggest bank mis-selling scandal.
The final bill could be more than double that, industry sources have said.
Banks also have to set aside money to compensate small companies for the mis-selling of interest rate hedging products. That bill could reach £10 billion [$15.168 billion].
In addition to compensation to customers, banks are incurring big administration charges. RBS said this accounted for £325 million [$492.8 million] of its provisions.
Following are details of provisions for PPI compensation payments by major banks (in millions of pounds, except HSBC in millions of dollars):
BANK PROVISION PAID OUT % PAID
Lloyds —–£5.3 bn [$8.04 bn] ——-£3.7 bn [$5.61 bn]—70
RBS ——–£2.2 bn [$3.336 bn]—-£1.3 bn [$1.97 bn]——59
HSBC——–$2.1 bn ———————$1.0 bn ———48
Santander—£772 mn [$1.17 bn] N/A
Nationwide–£173mn [$262 mn] N/A
Co-op——-£130 mn [$197 mn] N/A
(Compiled by Steve Slater and Matt Scuffham; Editing by Jane Merriman)