Royal Bank of Scotland (RBS) is the latest bank to set aside further cash to fund compensation for victims of the PPI scandal.
In its annual results, published today, the bank revealed it had made provision for an additional £175 million of PPI claims during 2017, as more customers complain about mis-selling of the product.
This additional money means the total cost of the PPI scandal to RBS is £5.1 billion so far.
However, it is not the only bank to feel the pain of increased claims.
As Moneywise reported earlier this week, Lloyds Banking Group has set aside a further £1.65 billion to compensate victims of PPI mis-selling during 2017. This takes the total cost of PPI mis-selling at the bank to £18.7 billion.
Barclays published its annual results yesterday. It set aside a further £700 million for PPI claims in the second quarter of 2017, bringing its total provision to £9.2 billion.
On Tuesday, HSBC announced that it has made a further provision of $637 million (about £456 million) during 2017. Its total provision now stands at $5.1 billion (about £3.65 billion), the bank says.
It expects increased complaint levels between now and the August 2019 deadline, after which customers will no be able to complain about the historic mis-selling of PPI.
Of the other major banks, Santander announced in January that it had made provision for an additional £109 million of PPI charges during 2017. It has set aside around £1.7 billion since the PPI scandal emerged.
'Taxpayer faces significant loss'
Despite the PPI payments, this is the first year that RBS is in profit since the financial crash 10 years ago. But analysts at DIY investment platform Hargreaves Lansdown say that with the share price now standing at around half of the government’s breakeven point, "the taxpayer’s still going to come out of this nursing a significant loss".
Ian Forrest, investment research analyst at The Share Centre explains: “The bank made a profit of £752 million in 2017, which was better than expected, compared to a £7 billion loss the previous year.
"While the bank’s capital position is clearly stronger than it was and costs are being cut, the recovery process still has some way to go. Indeed, the bank warned today that it may face substantial additional charges and costs in the coming months. All the while, the government retains a very large stake and there is no sign of a dividend returning.
"As a consequence, and the fact that we believe there are better opportunities for investors elsewhere in the sector, we suggest avoiding the stock."
Had loans from RBS
My husband died 13 years ago we owed money I could not pay back so all my money was kept by bank I had to go bankrupt asi became a pensioner and moved to post office