Banks to pay £19bn more for scandals

BrItaIN’s biggest banks face another £19bn of fines and charges over the next two years to pay for their financial scandals, experts predicted yesterday.

ratings agency standard & Poor’s said such penalties are now ‘a way of life’ for the industry as lenders are forced to cough up for ripping off customers.

the UK’s ‘big four’ banks – hsBC, Barclays, Lloyds Banking Group and royal Bank of scotland – have already racked up a £42bn bill over the last five years, according to the report.

this represents 88pc of the industry wide total of £48bn in charges faced by 13 banks and building societies in Britain.

s&P said it now expects the UK’s four biggest lenders to face further penalties in 2015 and 2016 of £19bn – taking the total for the big four to £61bn.

the bill has been driven by the mis-selling of payment protection insurance (PPI) as well as interest rate hedging products to small and medium-sized businesses.

‘We think that conduct and litigation charges are now a way of life for the UK banking industry,’ said s&P in the report.

‘this reflects the intrusive nature of regulation to the benefit of customers rather than the banks, strong media attention, and the proactive role of claims management companies.’ earlier this month accountancy giant KPMG said misconduct charges are a ‘problem that won’t go away’ for British banks in the wake of the financial crisis.

the PPI scandal has now cost the UK banking industry over £26bn – or 55pc of the total penalties i mposed f or misdemeanours, according to s&P.

Lloyds was the worst offender in terms of mis- selling PPI – paying out £12bn in fines and charges over the past five years, more than twice second-placed Barclays.