4th Sep 2019 08:07
(Alliance News) - Royal Bank of Scotland Group PLC on Wednesday said a rise in payment protection insurance claims could cost the company up to GBP900.0 million.
The bank said there was a spike in PPI claims in the days leading up to the Financial Conduct Authority's deadline of August 29.
RBS forecasts costs between GBP600.0 million and GBP900.0 million in its third quarter results but said as processing claims are ongoing, the charges could be lower, or even higher.
The bank said: "To June 30, 2019, RBS made provisions totalling GBP5.30 billion for PPI claims of which GBP4.90 billion had been utilised. The volume of claims received during August was significantly higher than expected, with a further spike in the final days leading up to the deadline."
In August, the Competition & Markets Authority said it took action against RBS over its failure to send PPI reminders to almost 11,000 of its customers for up to six years. The regulator required the bank to appoint an independent director to audit its PPI process.
Following the CMA warning, RBS took action by writing to those affected, issuing a reminder of their PPI policy and paying out GBP1.5 million in refunds.
Shares in RBS closed flat at 183.95 pence each in London on Tuesday.
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