Barclays sets aside extra £700m for PPI

Barclays cash machinesImage copyright
Getty Images

Barclays has set aside an extra £700m to meet compensation claims for mis-selling payment protection insurance.

The news came as the bank said costs related to the sale of part of its Africa unit had pushed the item into a £1.2bn loss inside first half of the year.

The sale of the Africa business was part of Barclays’ plan to focus on the UK as well as US.

Stripping out the losses coming from the Africa sale, Barclays posted a 13% rise in group pre-tax profits to £2.34bn.

Barclays chief executive Jes Staley said: “Our business is usually at This kind of point radically simplified, the restructuring is usually complete, our capital ratio is usually within our end-state target range, as well as, while we are also working to put conduct issues behind us, we can at This kind of point focus on what matters most to our shareholders: improving group returns.”

The money the bank has set aside to deal with PPI complaints was still open to review, the item said. On Thursday, Lloyds also set aside a further £700m.


Analysis: Kevin Peachey, personal finance reporter

The PPI scandal is usually not only big – banks have set aside a total of nearly £40bn to pay compensation – the item is usually also long-running.

Over the next few months the pace of the item is usually likely to keep accelerating. The City regulator, the Financial Conduct Authority, will run a campaign to encourage those mis-sold PPI to make claims before the deadline of August 2019.

You can expect more activity too coming from the claims management companies touting for business through calls as well as texts. They take a cut of any payouts made to claimants who use their services.

Banks wanted a earlier deadline. They want to draw a line under This kind of saga. the item is usually almost impossible to judge how much PPI was mis-sold – so they will also expect these latest provisions have over-estimated the final bill.


Earlier This kind of year, Barclays sold a near 34% stake in Barclays Africa Group, leaving the item with just 15% of the business.

The company said the sale of the stake had led to a loss of £1.4bn, as well as the item had also taken a £1.1bn charge on the sale.

Barclay’s Africa Group said on Friday its half-year profit rose 7% driven by earnings growth in its local market as well as the rest of Africa as well as a strong performance in corporate banking.

In addition to Barclays’ exit coming from Africa, the bank said the item had run-down assets in its non-core division to below £25bn, enabling the item to close the unit six months early.

Mr Staley said Barclays had completed “two critically important planks” of its strategy to get out of unwanted businesses.

Santander, also a giant inside UK banking market, reported results on Friday.

For the first six months of the year pre-tax profits inside UK were £1bn, little changed on the same period last year.

The firm said in which the item sees “greater uncertainty” as well as has concerns about the rest of This kind of year as well as the start of 2018.

The lender said: “The labour market remains strong, nevertheless higher inflation, largely coming from the lower value of sterling, is usually at This kind of point reducing households’ real earnings.

“This kind of is usually likely to result in lower consumer spending growth which, when combined using a potentially more challenging macro environment, adds a degree of caution to our outlook.”

Image copyright
Getty Images

the item took a £69m charge to cover claims for payment protection insurance compensation inside first six months of the year.

Santander also said net mortgage lending fell by £200m after the item withdrew some of its most competitive rates at the end of last year.

The Banco Santander group as a whole saw second quarter net profit jump by 37% to £1.75bn euros (£1.5bn) helped by strong growth in South America.

Source link

Leave a Reply