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Barclays sets aside a further £1bn to cover misselling claims

Barclays-Building-2012-480

Barclays has set aside an extra £1bn to cover any redress due to customers who were missold financial products.

Of the £1bn set aside, £400m has been set aside to cover the cost of misselling interest-rate swaps to small and medium-sized business, bringing its total provision for misselling claims against these products to £850m. The bank says it has used £36m of the £850m to settle claims as at 31 December 2012.

The bank has also set aside a further £600m for payment protection insurance redress, as a result of “a higher than anticipated response rate to pro-active mailings in Q4”. In total, Barclays has set aside £2.6bn to settle misselling claims relating to PPI products, of which £1.6bn had been paid to customers as at the end of 2012.

The extra £1bn set aside today means Barclays has now earmarked just over £3.4bn to cover the costs of missold financial products.

In a note published on the London Stock Exchange this morning, Barclays said it will continue to monitor claims volumes for both products and that provision levels will “be kept under ongoing review”.

The bank will publish its full-year results later this month containing the additional provisions.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Roman Duzinkewycz 5th February 2013 at 8:51 am

    How much money have they got? It’s like sprinkling confetti and I guess this is really the tip of the iceberg but I know Sants will sort this all out eh?

  2. More money than sense clearly.

    What troubles me more is, this is money that could be lent to businesses and individuals to help the economy grow, but is not and economic recovery is stalling.

  3. In fact PPI miss-selling claims have had a similar economic stimulus to a cut in the basic rate of tax. It’s one of the few opportunities taken since vat went up and the car scrapage scheme ended that has actually stimulated the economy by putting money in the hands of consumers. Just rather a shame the banks did not fess up sooner and therefore allowed the claims recovery companies to cream off a third for themselves. Still, there are probably many BMW dealers who are grateful for the extra business.

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