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Barclays Says Complaints Decline 26% on Fewer PPI Claims

Barclays, led by Chief Executive Officer Antony Jenkins, is facing various legal battles around the world over allegations of past misconduct, with a litigation bill that could rise to as much as 7 billion pounds ($12 billion) over the next four years, analysts at Nomura International Plc led by Chintan Joshi wrote last month. Photographer: Simon Dawson/Bloomberg
Barclays, led by Chief Executive Officer Antony Jenkins, is facing various legal battles around the world over allegations of past misconduct, with a litigation bill that could rise to as much as 7 billion pounds ($12 billion) over the next four years, analysts at Nomura International Plc led by Chintan Joshi wrote last month. Photographer: Simon Dawson/Bloomberg

Aug. 29 (Bloomberg) -- Barclays Plc, the U.K.’s second-largest lender, said complaints fell 26 percent to 284,342 in the first half as fewer customers sought redress for improperly sold loan insurance.

Payment-protection insurance, or PPI, claims dropped 37 percent to 182,564 compared with the same period last year, the lender said in a statement today. Mortgage-related complaints rose 40 percent to 5,900, and other banking issues increased 12 percent to 91,198, according to data U.K. banks must report to the Financial Conduct Authority, Britain’s regulator.

U.K. banks have reported complaints data to regulators for the last four years after they sold about 45 million PPI policies valued at 44 billion pounds ($73 billion) from 1990 to 2010, many of which were unsuitable for customers or didn’t provide the expected benefits. The FCA said today banks have to reassess 2.5 million PPI claims previously rejected or potentially underpaid due to shortcomings in their criteria.

Royal Bank of Scotland Group Plc, the U.K.’s largest state-owned lender, said total customer complaints dropped 25 percent to 215,993 in the first half compared with the same period a year earlier. Complaints linked to PPI fell 24 percent to 123,086 in the first half from 162,781 in the second half of 2013. The bank also said it’s investing 20 million pounds in a new complaints-management system.

Lloyds’s Complaints

Lloyds Banking Group Plc said first-half non-PPI complaints rose 24 percent to 129,469, driven by regulators’ changes to the rules around mortgage applications and claims-management companies. Banking complaints climbed 27 percent to 83,785, the lender said. The bank has set aside more than 10 billion pounds to compensate clients for PPI claims.

Barclays has taken 4.85 billion pounds of charges for mis-selling PPI to customers, including a 900 million-pound charge this year, hindering Chief Executive Officer Antony Jenkins’s attempts to change the culture of the London-based bank following its 2012 fine for rigging the Libor benchmark interest rate. The lender may also face another $2 billion in conduct costs for its alleged rigging of currency markets and lying to clients about its U.S. dark-pool trading venue, Sanford C. Bernstein Ltd. estimated this month.

“We are constantly making improvements to our day-to-day customer experience, however our banking complaint figures reflect some significant one-off changes in the first half,” Matt Hammerstein, head of client and customer experience at Barclays, said in the statement.

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net

To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net Steve Bailey, Edward Evans

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