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N&P confident even if it has to pay £50m to Keydata clients

Chief executive says issue could be resolved by end of September

Norwich & Peterborough Building Society says that under a worst-case scenario it could face a £50m bill for covering the losses of clients it advised to invest in Keydata.

Chief executive Matthew Bullock said the society is preparing for discussions with the FSA in September to decide whether it missold products from the failed structured product provider, in an interview with BBC Radio Cambridgeshire last week.

Bullock said the Financial Ombudsman Service, which earlier this month issued a prelim-inary ruling that N&P should pay £28,000 plus interest to an elderly couple who were advised to invest in Keydata bonds, has agreed to discuss the firm’s appeal against the ruling after the FSA talks in September.

He said: “If you said that the products were 100 per cent missold and the bonds are worth absolutely nothing it could be about £50m.”

He said N&P carried out sufficient due diligence on Keydata and so should not be forced to cover investors’ losses.

But he insisted that Norwich & Peterborough could cope with any compensation scenario. He said: “Even if it was 100 per cent or nothing, there would be nothing that could be concerning our members or our savers about this because we have the reserves we could absorb even the worst-case scenario.”

“Certain things have happened in the last few days that make me feel reasonably confident this thing will be resolved and people will be able to know where they are and hopefully feel good about things by the end of the year, probably by the end of September.”

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