View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Business
2 November 2012

Five questions answered… on Royal Bank of Scotland’s PPI provisions

The cost of PPI mis-selling continues to rise.

By Heidi Vella

RBS has set aside even more money to cover the cost of compensation claims for mis-sold PPI. We answer five questions on RBS’s PPI payouts.

How much more has RBS put aside to cover PPI mis-selling claims?

RBS has announced it will be setting aside a further £400m to cover future anticipated PPI compensation claims. 

It has also set aside another £50m to cover the cost of compensation from a recent computer systems failure which affected customers earlier in the year.

How much has the bank spent on PPI mis-selling claims already?

Including this latest fund, a staggering £1.7bn

What about other banks?  

In total, and including any latest provisions, the PPI scandal has cost UK banks £10.8bn. 

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Lloyds banking group has also announced it has put aside a further £1bn of provisions to cover claims. 

What is RBS current financial position?

RBS, which is 80 per cent owned by the UK government, has reported a pre-tax loss of £1.26bn for the three months to 30 September, against a £2bn profit a year earlier. 

The bank is also bracing itself over possible steep penalties for any involvement it might of had in alleged manipulation of the Libor inter-bank lending rate. Barclays was recently fined £290 million for attempting to manipulate libor. 

Another big hit for the bank is a £1.5bn charge against its own debt due to an accounting rule that requires it to take a loss on increases in the value of its bonds. 

RBS’s operating profits for the third quarter were £1bn, up from a £650m profit in the second quarter. However these figures discount the PPI mis-selling and other charges. 

What has RBS said?

Chief Executive of RBS, Stephen Hester, told the BBC: 

“The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully”

“The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank’s safety and soundness has advanced so well.”

Adding that the bank is too often was looked upon as putting the short-term interests of shareholders and staff above customers. 

Content from our partners
Labour's health reforms can put patients first
Data science can help developers design future-proof infrastructure
How to tackle the UK's plastic pollution problem – with Coca-Cola

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team.
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU