Total PPI bill set to surge past £50bn

BARCLAYS and Royal Bank of Scotland are set to take the finance industry’s compensation bill for misselling payment protection insurance (PPI) past £50 billion this week.

Both are about to release their thirdquarter results, which will reveal exactly how much the PPI scandal has cost them and dented profits.

In the run-up to the August 29 deadline for filing PPI complaints, banks, building societies and other financial services firms experienced a last-minute surge in customer claims.

The scandal has so far forced groups to set aside £48.67 billion to cover the costs of PPI redress, according to the New City Agenda think tank.

However, on Thursday, RBS is expected to announce additional PPI charges of up to £900 million. On Friday, Barclays is tipped to add about £1.6 billion to its mis-selling provisions. The following week, Lloyds Banking Group is likely to put aside an additional £1.2 to £1.8billion for PPI redress.

New City Agenda director of policy Dominic Lindley said that given the volume of complaints and how long it has taken the banks to deal with them “it will be the back end of 2020 before we have full clarity on what the final total will look like”.

Tomorrow, insurance giant Prudential will be split into two companies after 171 years.

M&G will be comprised of City fund management giant M&G and the Prudential’s UK life business and will remain on London Stock Exchange. Its fast-growing Asian and US division, which will be called Prudential, will list in Hong Kong.