With just months to go before the PPI claims deadline in August, Santander has revealed that it has £246 million remaining in its contingency fund to pay future successful claims.
Announcing a 1.4% fall in profits, the Spanish-owned bank said the additional £109 million it set aside the previous year would be enough to meet the projected demands.
Recent claims experience
In its annual report it said: “The remaining provision for PPI redress and related costs was £246m.
We made no additional PPI charges in the year, based on our recent claims experience, and having considered the FCA’s consultation caper issued on 7 November 2018.”
Santander has set aside a total of £1.5 billion to pay PPI compensation, but the bank has not ruled out any further increase before the deadline.
A statement in the annual report confirmed: “We will continue to monitor our provision levels, and take account of the impact of any further change in claims received and FCA guidance.”
In common with all other high street banks Santander is monitoring response to the Financial Conduct Authority’s consumer awareness campaign which urges consumers who think they might have a viable claim for mis-sold PPI to do so before the deadline date of August 29th.
Latest FCA figures show a total of £33.6 billion has already been paid out by the UK banking industry in compensation for what has become one of the country’s biggest financial scandals.
Eight years after figures were first published, the rate of payouts is still running at an average £⅓ billion a month and banks are still receiving thousands of new claims a week.
Santander’s 1.4% drop in profits revealed in the report has been blamed on ‘an uncertain operating environment’ and a number of other costs.
It announced it was setting aside £58 million for issues in its consumer credit operation, though no more detail was given.
A further £32.8 million went in a fine from the FCA for ‘serious failings’ in its dealings with the accounts of deceased customers.
Earlier this month they announced the closure of 140 branches across the country, putting 1,270 jobs at risk.
The bank says branch transactions have fallen by 23% over the past three years, while those using digital channels have almost doubled.
However, a spokesman said branches still had ‘a vital role’ to play for Santander and expected its network – one of the biggest in the UK – would ‘remain stable for the foreseeable future’.
Looking to the future, chief executive Nathan Bostock said: “In the current uncertain environment, we will continue to do everything we can to support our customers and deliver on our purpose of helping people and business prosper across the UK.”
“I believe we are well positioned to succeed by focusing on our core areas of strength, progressing our digital transformation and improving our operating efficiency while remaining strongly capitalised.”