Clydesdale and Yorkshire banks put aside £1m for PPI claims

National Australia Bank group fears PPI mis-selling aftermath

by Luke Whitmore, 20th May 2011

Clydesdale Bank and the associated Yorkshire Bank revealed yesterday that they will be setting aside another £100 million to cover the potential cost of mis-sold Payment Protection Insurance (PPI) claims from their customers.

These banks initially ringfenced £15m for PPI reclaims on the 5^th of May, but this latest addition to the fund is expected to slash away a great deal of their profit for this year.

The bank is the latest of many lending institutions to make provision for compensation to borrowers who were sold the insurance inappropriately in what turned out to be a widespread scandal which permeated the financial world.

The British Banking Association recently declared that they would not appeal against a court ruling which forced banks to retroactively apply new FSA rules on PPI selling, meaning that the banks are facing a payout of unprecedented proportion to consumers who had the insurance policy foisted upon them when it was of no use to them or they did not ask for it.

Lynne Peacock, chief executive of the National Australia Bank group which owns both Clydesdale Bank and Yorkshire Bank, stated "As a bank we were not involved in the judicial review, but as the outcome of the BBA case is now clear it is prudent for us to provide against future PPI claims as other banks have done.

"Our assessment of £100m is based upon estimates and assumptions that continue to be uncertain, but we feel this is an appropriate amount to account for claims yet to be received and the probability of success of those claims."

PPI was found to have been sold to many customers who were ineligible for the policy, or who had not asked to receive it. Some people were even told that they had to take out insurance or not told that they were paying for it.

If you're looking to reclaim mis-sold PPI, we can help.

Claims Financial