NAB adds £245m to mis-selling bill

NATIONAL Australia Bank, the owner of Yorkshire and Clydesdale Banks, has warned it will need to set aside a further £245m relating to the mis-selling of payment protection insurance and interest rate swaps by its UK operations.

In a third quarter statement it said £75m related to the increased costs of administering the PPI compensation programme and £170m is associated with the sale of interest rate hedging products.

The bank said the eventual bill could be higher, stressing there were a “wide range of uncertain factors relevant to determining the total costs”. A full assessment will be given in the annual figures.

Today, the bank also said a vote for Scottish independence would “give rise to significant additional costs and risks for Clydesdale”.

During the period NAB said revenue was down 1% due to lower markets income. This was partially offset by higher lending balances. Net profit remained steady at $1.7bn (£950m).

Chief executive Andrew Thorburn described the performance as “satisfactory”, and added: “Our UK operations still face a number of challenges. Conduct charges are difficult to predict, but we now expect that we will need to take further provisions at the full year result for both interest rate hedging products and Payment Protection Insurance (PPI).

“In addition, the Scottish Independence vote takes place on 18 September and a vote in favour of independence may give rise to significant additional costs and risks for Clydesdale Bank.”