Barclays and RBS shrug off PPI costs

BARCLAYS and Royal Bank of Scotland are tipped to unveil bumper annual profits this week, despite having to set aside billions more to cover increased Payment Protection Insurance compensation costs.

On Thursday Barclays is expected to say that its pre-tax profits grew 34.7 per cent to £4.7billion last year, although it set aside a further £1.4 billion in PPI provisions, taking its total compensation bill to £11 billion.

The bank has been boosted by a revival at its investment banking division and analysts believe that the full-year dividend will be increased by 37.4 per cent to 8.93p per share.

The following day, Royal Bank of Scotland is likely to say that its profits rose 20.4 per cent last year to £4 billion, despite having to top up its PPI compensation pot with an additional £900million. RBS has to date set aside £6.2 billion to cover the costs of its past PPI mis-selling.

RBS is expected to cheer its longsuffering shareholders by announcing a dramatic hike in its full-year dividend.the bank is likely to declare a dividend of 23.17p per share, compared with just 3.5p last year.

● The Government will tomorrow launch a campaign aimed at raising awareness of Pension Credit and boosting the number of claimants.

The Department for Work & Pensions said that although the benefit is claimed by 1.6 million people, it believes that there may be a significant number of older people who are missing out. As part of the campaign, the DWP will point people towards an easy to use online calculator which will tell people if they are eligible.