The PPI scandal has engulfed banking in the UK recently, with a massive jump up in the amount of money being paid out to claimants. The shocking thing is that we’re only really seeing the beginnings of the claims being made. Around two billion pounds has been paid so far, but that will rise to four billion this year, and will probably total at somewhere around nine billion.
The reason that the FSA is being so hard on banks is because the banks have been so hard on customers. It’s criminal how people taking out mortgages were treated from the early 90s onwards. Basically, customers were being forced or misled in many instances to take out insurance cover on their mortgage. Only fifteen percent of this money was ever paid out to insurance claims, thanks to some incredibly picky small print, and the fact that many people who’d taken on the cover weren’t eligible for it in the first place.
The worst hit of the banks is Lloyds. They made the most profits from PPI, so it makes sense that they should be the worst hit, with around one third of the compensation claims going to them. They made a loss of three point four seven billion pounds in the first quarter of 2011, three point two of which was for PPI provisions. This knock also caused a seven percent drop in shares, which means further losses overall. The previous year they had reported a profit of over two billion, so that makes this all the more embarrassing.
The Bank of Scotland was the most resistant of the BBA to the fines and compensation calls. Their total losses for 2011 doubled from the previous year, thanks to almost one billion pounds of PPI fines and repayments.
Those are the worst hit banks, but they’re by no means the only ones paying out. It’s expected there will be four billion pounds of claims in this year alone.
HSBC PPI claims are being payed out so don’t miss out and get you money back.
© for Uber Articles, 2012. |
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