PPI News – Co-op Bank takes £62.5 million hit for PPI

PPI News - Co-op Bank takes £62.5 million hit for PPI

Pre-tax losses for the Co-operative Bank widened to £152.1 million from £140.7 million after the bank took a hit of £62.5 million for mis-sold PPI over the last year.

Unlike most other high street banks, the Co-op has finished checking the surge of complaints it received leading up to the claims deadline of August last year and believes it has identified all valid complaints.

Impacted

The auditor’s report said: “Whilst losses were anticipated, reflecting amongst other things, the cost of the planned investment and the impact of prevailing economic uncertainty and intense competition, the results were also impacted by charges related to PPI complaints incurred in the third quarter.

“Like other banks, we experienced a higher level of complaints than anticipated in the final few weeks ahead of the August 2019 deadline. Had it not been for this additional charge, our losses would have reduced significantly year-on-year, in line with our plan.”

Upbeat

But chief executive officer Andrew Bester was upbeat in the bank’s annual report, saying: “Our underlying losses are in line with expectations and the higher statutory loss reflects our investment in transformation and the impact of higher than expected levels of PPI claims felt industry-wide.

“Having tackled the legacy issues of the past, we now have the foundations for the bank to grow and our brand presents real potential in a market where consumers want to drive change by seeking greener and more ethical choices.

“While there is still work ahead, we have significantly improved our digital proposition and reinvested in our distinctive ethical brand.”

Overall

The Co-op is one of the smaller players caught up in the massive PPI scandal which has seen the nation’s financial institutions forced to repay more than £37.2 billion to millions of clients who were mis-sold payment protection insurance over the last three decades.

In an attempt to draw a line under what has become the biggest financial scandal the UK has ever seen, the Financial Conduct Authority imposed a final claims deadline in August last year after which no new claims could be lodged.

Last minute

The result was a huge flood of last minute complaints which swamped the banking industry, forcing them to admit they could not deal with them in the approved time frame.

Some banks claimed it will be the summer before they have dealt with all outstanding claims.

It is only then that the final bill for compensation can be calculated.

Related Story – https://www.gladstonebrookes.co.uk/blog/2020/03/03/lloyds-virgin-money-and-direct-line-cuts-hundreds-of-jobs/

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