Barclays sets aside further £700m for PPI

 

The disclosure comes three months after the bank’s finance director said he felt the bank had put aside enough to cover further PPI claims, even though many of Barclays’ rivals increased their provisions in the second quarter.

Announcing Barclays’ half-year results in July, Chris Lucas said the volume of PPI complaints had started to fall following a surge at the start of this year.

However, Barclays said on Thursday that trend had reversed, with claim volumes ticking up again since the end of June.

The move will come as a blow to the new chief executive, Antony Jenkins, who has spoken about the importance of restoring customers’ trust in the bank following a series of regulatory and mis-selling scandals.

Bob Diamond, former chief executive and Marcus Agius, chairman, resigned after the bank was fined £290m by regulators for manipulating Libor.

Barclays’ fresh PPI provision takes the estimated cost to the five biggest UK banks to about £10bn. Lloyds Banking Group has already set aside £4.3bn, while Royal Bank of Scotland has earmarked about £1.3bn. HSBC and Santander UK have made smaller provisions.

“Based on claims experience to date and anticipated future volumes, the resulting provision includes Barclays best estimate of expected costs of future PPI redress,” Barclays said in a statement. “Barclays will continue to monitor actual claims volumes and the assumptions underlying the calculation of its PPI provision.”

The bank is due to announce its third-quarter results in two weeks. Including the PPI provision and adjustments for changes in the value of its own debt, analysts expect it to report a pre-tax loss of at least £100m.

Shares in Barclays were 1.6 per cent lower at 240.55p in late London trading.

 

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