Barclays reviews its PPI provision after claims spike
BARCLAYS Bank is reviewing whether to increase its £4.1 billion provision for payment protection insurance mis-selling after reporting a spike in cases filed via claims handling firms, with some claims dating back to sales more than a decade ago.08 May 2014
The bank yesterday revealed a 5% fall in adjusted pre-tax profit to £1.7 bn in the first quarter of its financial year compared to a year ago after revenues fell sharply in the fixed income arm of its under-pressure investment bank.
The results come ahead of a planned strategy update from the bank tomorrow that is expected to see a further scaling back of its investment bank and activities in continental Europe.
Barclays, which has set aside £4.1 bn to cover PPI claims so far, reported that overall complaint volumes were down in the first three months of 2014 compared to the last quarter of 2013.
It said that 40% to 50% of claims received "have no record of PPI being sold".
But it said that March saw a "significant spike" in claims received via claims management companies "with the majority of these complaints relating to PPI sold over 10 years ago".
It added: "As a result of this inflow of complaints there remains a significant level of uncertainty regarding future complaint volumes, including assessing their legitimacy.
"This situation is being monitored closely including undertaking additional analysis and an assess- ment of the overall PPI provision."