RBS faces another £900m of PPI charges

Royal Bank of Scotland (RBS) said on Wednesday it expects to face a further charge of up to £900 million to settle a final compensation bill for mis-selling payment protection insurance (PPI) after a last-minute surge in claims from customers. 

RBS said it had made an additional provision of £600 million-£900 million on top of the £5.3 billion already set aside.

RBS is still 62%-owned by the UK taxpayer after its £45 billion bailout during the 2008 global financial crisis.

In a stock exchange statement, RBS said: “The Royal Bank of Scotland Group plc today provides an update in respect of charges related to Payment Protection Insurance (“PPI”).

“RBS has been implementing the FCA’s policy statement for handling complaints about the mis-selling of PPI since 2011. 

“Under the FCA’s Policy Statement 10/12, the deadline for filing complaints related to the mis-selling of PPI expired on 29 August 2019. 

“To 30 June 2019, RBS made provisions totalling £5.3 billion for PPI claims of which £4.9 billion had been utilised. 

“The volume of claims received during August was significantly higher than expected, with a further spike in the final days leading up to the deadline of 29 August 2019.

“RBS therefore now expects to make an incremental charge for PPI claims, in addition to the provisions recorded to 30 June 2019, in the range of £600 million to £900 million in its Q3 2019 results, which takes into account claims by the Official Receiver.

“The processing of claims is ongoing and the ultimate provision recognised could be above or below this range.

“The estimated range amounts are preliminary and unaudited.”