HSBC has become the third of the big four UK banks to add millions of pounds to its PPI compensation pot AFTER the claims deadline in August.
When it added £505.7 million just before the deadline it said that the amount it had set aside expecting it to be enough to see them through to the deadline was an under-estimate.
But even that injection of cash proved not to be enough because the bank has now added a further £302 million after receiving a massive amount of new complaints leading up to the deadline.
No accurate figures have been given, but the bank estimated it would receive an extra 359,000 complaints after the deadline and expects to uphold 83% of them for an average payout of £1,890.
It believes it has sold a total of 5.4 million PPI policies since 2000, generating an estimated revenue of £2.64 billion.
The gross written premiums on these policies were approximately £3.42 billion.
The figures were announced as part of the bank’s third quarter financial report which revealed a drop in profits of 18% and warned of a ‘challenging’ environment ahead.
Interim chief executive Noel Quinn said the bank planned to restructure its business because its performance in parts of Europe and the US was ‘not acceptable’, with the possibility of cutting 10,000 jobs from its world-wide workforce of 238,000.
Though profits fell by 18%, Mr Quinn praised the bank’s performance in Asia, the region where it makes most of its profits.
He said: “Parts of our business, especially Asia, held up well in a challenging environment in the third quarter.
However, in some parts, performance was not acceptable, principally business activities within continental Europe, the non-ring-fenced bank in the UK, and the US.”