Bradford & Bingley has announced that it is to set aside a further £89.4m to deal with compensation for endowment and investment mis-selling.
The announcement comes just as the FSA is expected to confirm that the industry as paid out £2.2bn in compensation for mis-selling of endowment mortgages, doubling over the past 18 months.
B&B had ear-marked £38.7m for the 12 months to December 31 2005. It concedes that the level of claims for compensation from endowment and investment products sold prior to the closure of its IFA has “reached higher levels in the first half of 2006 than expected.” B&B sold its IFA businesses in 2004 and said it would focus on a simpler and more focussed business strategy.
In the rest of its results for the six months to June 2006, B&B announced underlying profit before tax up 9 per cent to £164.2m, up from £150.2m in the second half of 2005. Net lending income increased by 12 per cent form £155.8m to £173.8m in the period.
Group chief executive Steven Crawshaw says: “We have had a very successful first half. Our business is bearing the fruits of focus. Our markets are continuing to perform well and we have a very robust pipeline.”