Barclays sets aside £600m as bill for PPI to hit £1bn

BARCLAYS says it has set aside an extra £600 million to meet compensation claims for mis-selling of payment protection insurance (PPI) in the third quarter.

The sum exceeds some banking expert estimates for £500m in the three months to September and brings the total provision over the past two quarters alone to £1 billion, after £400m was put aside in the second quarter.

The banking industry’s PPI bill already stands at more than £30bn.

The Financial Conduct Authority (FCA) has put a June 2019 deadline on claims in an effort to draw a line under what has been one of the biggest banking scandals in history.

Barclays’ statutory profit before tax was up 35 per cent to £837m in the third quarter, while net operating income fell to £4.7bn in the quarter, from £5bn in the same period last year.

Shares reacted positively, rising 2.41 per cent or 4.39p to 186.19p at the close of trading.

Chief executive Jes Staley said the bank is still focused on selling down and disposing of its hinterland businesses as quickly as possible to focus in on US and UK operations

Barclays also said the group’s main pension scheme deficit ballooned to £1.1bn from an £800m surplus.