PPI compensation provision hits Spanish bank hard
by Luke Whitmore, 28th July 2011
Spanish bank Santander has seen its profits hit hard by the
obligation to offer payouts to customers over PPI mis-selling.
The UK wing of the bank, which includes such financial stalwarts
as Alliance and Leicester, Abbey, and Bradford and Bingley, has
seen a drop in profitability of 3% in the six months leading up to
June. This has in part been blamed on the £538m which had to be put
aside in order to ensure that compensation could be paid to
customers who had been wrongly sold PPI, or Payment Protection
Insurance.
PPI is a form of loan insurance which has gained an infamous
reputation after being pushed upon customers by banks with a lax
approach to regulations, meaning that it was often sold to those
who had no use for it, did not need it or in some cases could not
even use it. It is estimated that millions of consumers have been
paying premiums for unwanted or unnecessary PPI policies on loans
taken out over the last few years.
Many of the banks protested their innocence in the scandal,
though Santander was not among those making this claim. Consumer
complaints were vindicated judicial review back in April placed the
responsibility for mis-sold PPI firmly in the laps of the banks,
forcing various lending institutions to set aside billions of
pounds in order to offer redress to the victims of their
irresponsible behaviour.
Santander's parent company has seen their profits drop by a
total of 21% over the first half of the year, leading some analysts
to predict that they may delay their intended move of floating
their UK business concerns on the stock market.
Ana Botin, Santander chief executive, accused the UK's financial
regulations and the associated costs of causing problems for the
bank, in addition to the provisions necessary to cover mis-sold PPI
compensation.
If you have been a victim of mis-sold loan insurance, we can
help you claim back PPI today.
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