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B&B puts aside 90m for endowments

Bradford and Bingley is setting aside 89.4m against compensation claims for mortgage misselling, which is more than double the 38m it put aside in 2005/06.

The total amount of compensation paid out by the industry for missold endowment mortgages has rocketed to 2.3bn.

The figure, from FSA research covering 90 per cent of the market, has doubled in 18 months although previous research covered only 70 per cent of the market.

B&B’s compensation figure in its interim results have overshadowed its 9 per cent rise in underlying first-half profits to 164.2m, which is described by chief executive Steven Crawshaw as its best set of results since flotation five years ago.

The firm, which stopped selling endowment policies in 2004, is hoping this will be its final provision.

Spokeswoman Mandy Pursey says B&B is in a different position to many other providers because it has been unable to impose a time bar on complaints as it has historically given advice on products from a range of providers.

She says “We believe this is a prudent amount to set aside to cover all future claims. This reflects what is going on across the market. It is possibly to do with time-barring and the publicity over no win, no fee claim companies.”

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