Lenders may have to further increase their provisions to compensate victims of mis sold payment protection insurance, according to new research from The Times.
The payment protection insurance mis selling scandal could, in fact, cost lenders up to £40bn should they be required to repay every fee generated during the course of the past decade.
While this figure is “worst case scenario”, research based on the Financial Services Authority’s (FSA) monthly PPI figures as well as historic selling data could see PPI totals hit at least £25bn, almost double than the current provision of £13bn.
Figures reveal banks received 200,000 claims a month last year with payouts in October 2012, the last month for which figures are available, reaching £534m. The total amount of PPI redress has now surpassed £7.5bn.