CYBG – the former Clydesdale and Yorkshire Banks – have added another £403 million to their PPI provision as the number of new PPI claims soared across the financial sector.
The announcement was made by National Australia Bank (NAB) – CYBG’s former owner. Under an agreement signed when the two split in February last year, NAB will pay 90% of the increase, leaving CYBG to fund £39 million.
The increase takes the bank’s total PPI provision to £2.2 billion of which £631 million remains to pay future successful claims.
A NAB spokesman said the increase had been made necessary because they had received ‘an unexpectedly high number’ of new claims being lodged.
He confirmed the move was made on the evidence of an ‘updated forecast’ of the number of claims the bank expects to receive before the PPI claims deadline comes into effect on August 29th 2019.
It is further evidence of a major surge in PPI claims following the announcement of the deadline by the Financial Conduct Authority (FCA) and the major consumer awareness campaign fronted by ‘Terminator’ Arnie Schwarzenegger.
None of the other major lenders have seen fit to increase their PPI provision. However, Lloyds Banking Group (LBG) admitted that though they had budgeted for an anticipated 9,000 extra claims a week at one point they were receiving 16,000 a week.
The total has since dropped to 11,000 a week, but that is still 2,000 a week more than the budgeted figure.
The announcement of the claims deadline has been credited with an overall 24% increase in PPI claims in the past six months by the FCA.
The £42 million advertising campaign warns consumers they must make a claim for any potentially mis-sold PPI before August 29th 2019 or lose the chance forever.
A dedicated website has received 1.35 million hits since the launch in September – more than 400,000 in that month alone – with a further 9,410 calls being made to a special helpline.
The UK banking industry has paid out a total of £27.9 billion in PPI compensation since January 2011 and, according to figures provided by the New Agenda think tank, it has set aside more than £43 billion to cover the cost of what has become the country’s most expensive mis-selling scandal.
In the first seven months of this year lenders have paid out £1.7 billion – an average of more than £242 million a month.