Third quarter results reveal that four high street banks are increasing their PPI provisions totalling up to £2bn. Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland will be indicating their additional top-ups for their PPI refund and compensation.
According to sources, the £2bn collective PPI provision would be added before the FCA confirmation of a 2019 deadline for PPI claim.
Lloyds is likely to pay more than the other banks. Currently, it has the highest total for PPI compensation reaching about £16bn in total.
The new addition comes despite the perceived slowdown on PPI claims during the first half of 2016 compared to 2015 during the same time period.
PPI compensation payouts are also down by £405.8m in April to £266.8m the following month and even up to £244.6m in July.
Banks are struggling to pay fines for PPI processing issues and other regulation troubles they face during the time. PPI may have also increased due to the Plevin case. The case centred on defining a “substantial” fee where a broker must disclose their commission payment to their customer.
Banks may also pay higher than £2bn in the coming years as the FCA extends its PPI claim deadline to another year.