CYBG add another £150 million for PPI

CYBG add another £150 million for PPI

CYBG – the former Clydesdale Yorkshire Bank – has added a further £150 million to its PPI compensation provision, but has warned that it may not be enough to cover the final bill.

The bank was created when its parent company – National Australia Bank (NAB) – decided to divest itself of its UK business.  However, as part of the deal there is an indemnity clause which means CYBG will only be responsible for 9.7% of the increase. The rest will be paid by NAB.

Claims deadline

Releasing its quarterly figures, CYBG said the main reason for the increase was the expected rush of new claims following the announcement of the PPI claims deadline scheduled for August 29th 2019.

The report reveals the total set aside to pay successful claims so far is £1.796 billion, of which £494 million remains.


By March 31st it had received a total of 317,000 complaints and the increase in provision is expected to cover a further 49,000.

The report adds: “There is a risk that existing provisions for PPI customer redress may not cover all potential costs. In light of this, the eventual costs of PPI redress and complaint handling may therefore differ materially from that estimated and further provision could be required. Accordingly, the final amount required to settle the Group’s potential PPI liabilities remains uncertain.”

Risk and uncertainties

“There remain risks and uncertainties in relation to these assumptions and consequently in relation to the ultimate costs of redress and related costs, including:

  • the number of PPI claims (and the extent to which this is influenced by the activity of claims management companies, the application of a time bar, Plevin, and FCA advertising)
  • the number of those claims that ultimately will be upheld
  • the amount that will be paid in respect of those claims
  • any additional amounts that may need to be paid in respect to previously handled claims
  • the response rates to the proactive customer contact
  • the costs of administering the remediation programme.


Further insight is given into the way the bank is handling its PPI claims.

In August 2014 it was subject to an enforcement process by the Financial Conduct Authority (FCA) in relation to its complaints handling process and later admitted its handling of past PPI claims had been ‘inconsistent’.


Chief executive David Thorburn said at the time: “In line with the industry, we continue to deal with legacy issues.  The way we have handled PPI complaints has not been consistent and we are committed to putting this right.

“We have already introduced a new PPI complaint handling process and we will also apply this new process to a systematic and proactive review of all past PPI complaints.”


The bank says it is halfway through re-assessing 180,000 complaints, reviewing them in the light of the new complaints handling process.

A past business review of other PPI sales is nearing completion, with a view to ‘pro-active redress’ if ‘actual or potential customer detriment’ is found.