Procedural mistakes are costing Barclays dearly, because not only did they have to cough up £290m in fines for their part in rigging the interbank lending rate, today bosses said they’re setting aside another £700m to cover the cost of claims because they mis-sold payment protection insurance.
Several financial institutions sold PPI insurance on loans and credit as protection. Protection, they said, which was for their customers if they fell ill or lost their jobs. But PPI was widely mis-sold to thousands of people across the UK who didn’t want it or felt they needed it
Barclays already put £1 billion by last year and £300 million in the early part of this year to cover consumer claims. Officials say many more claims had come in than they’d expected, hence the need for a bigger pot. The bank’s two billion pound mark brings them up close and personal to Top of the Leader Board, Lloyds Banking Group, who has almost £4.3bn squirrelled away in readiness for a deluge of claims.
How news about Barclays having to dig deeper into their coffers than first thought will go down with their shareholders is anyone’s guess. Their third-quarter earnings report is due out at the end of the month.
Written and Presented by Marverine Cole