Santander’s UK division has set aside £45m for investment advice misselling claims after an FCA investigation found “significant deficiencies” in the bank’s suitability processes.
Santander was fined £12.4m by the regulator in March 2014 for failings in its investment advice arm. The regulator’s mystery shopping exercise also uncovered problems with some of the bank’s financial promotions and communications.
The lender’s latest quarterly management statement, published this morning, reveals a total provision of £45m was made last year relating to wealth and investment products. It is understood this provision has been made to cover claims resulting from the FCA action.
In addition, the banking giant set aside an extra £30m for PPI misselling in the second half of 2014 following a review of claims activity.
The firm made a total provision of £129m in relation to PPI redress and related costs during 2014.
This includes additional provisions of £95m for the year – £65m for the first six months and £30m for the final six months.
“The additional provisions were taken following a recent review of claims activity, which indicated that claims are expected to continue for longer than originally anticipated,” the bank says.
“Monthly redress costs, including pro-active customer contact, decreased to an average of £11m per month, compared to a monthly average of £18m in 2013.”
Pre-tax profits at Santander UK rose 26 per cent year-on-year, from £1.1bn in 2013 to £1.4bn last year.