Royal Bank of Scotland has set aside a further £400m to cover the cost of payment protection insurance (PPI) claims.
This now take RBS’s total provision for PPI to £1.7bn. In addition, the bank has also had to increase the amount of compensation required for its recent IT glitch by £50m to £175m.
RBS is the third high street lender to earmark further funds for PPI claims; Lloyds Banking Group adding a further £1bn to its pot while Barclays have increased its provision by an additional £700m. Lloyds have now set aside £5.3bn with Barclays’ compensation fund totally £2bn. HSBC is also expected to add to its PPI pot although it is believed this will be a much more modest supplement.
It is now estimate the payment protection insurance mis selling scandal will cost in excess of £10bn.