Payment Protection Insurance claims increase and bank profits drop

After the Financial Ombudsman Services (FOS) reported a significant increase in Payment Protection Insurance claims (56,025 between April and June), banks have announced a drop in profits.

Barclays have experienced a 33 per cent drop in profits in the first half of 2011, compared to the first six months of 2010.

Royal Bank of Scotland has announced a first half loss of £1.4 billion while Northern Rock has too suffered a decrease in profits. The Newcastle-based bank has reported a net loss of £68.8m; last year, when they were paying fewer payment protection insurance claims, they enjoyed profits of £142.6 million.

But it is Lloyds who are bearing the biggest brunt after announcing a £3.3 billion loss for the first six months of 2011.

Lloyds were the biggest culprits in the payment protection insurance mis selling scandal; their reported losses largely down to the £3.2 billion earmarked for PPI compensation claims.

Barclays and RBS’s losses are too attributed, in large part, to provisions for mis sold payment protection insurance policies. These high street banks have set aside £1 billion and £850 million respectively.

Payment protection insurance was mis sold to millions of customers who didn’t want, need or even know about it when taking out a loan, credit card and mortgage. To start your payment protection insurance claim, simply complete our online claim form.Tweet

Content correct at time of publication