Co-op Bank sets aside further £100m for PPI claims
THE Co-operative Bank said it expects to pay out a further £100m on compensation claims over the sale of payment protection insurance (PPI).
In a statement the group said it expects to increase its provisions, which mainly relate to PPI mis-selling by as much as £105m.
The move comes as the group tries to convince bondholders to support a £1.5bn rescue plan.
In a statement it said: “The bank has made a re-assessment of certain likely future conduct costs and, as a result, the bank expects to increase its overall provisions by approximately £100m-105m.
“The bank’s estimates of existing provisions relating to customer redress have been revised, with these revisions relating primarily to a change in assumptions regarding the future costs of PPI redress, arrears charges and the processing of certain mortgage interest ‘first payments’.
“An additional provision has also been made in relation to the cost of customer redress that will be required following the identification of a technical breach of the Consumer Credit Act.”
Banks have set aside around £16bn to deal with PPI mis-selling claims. The policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to those who would have been ineligible to claim.
