PPI Compensation Payouts Hit 14-Month Low in December, FSA SaysEdward Evans
Compensation payouts to U.K. bank customers who were wrongly sold payment-protection insurance dropped to the lowest level in 14 months in December, the Financial Services Authority said.
Lenders paid about 360 million pounds ($557 million) in December, the least since October 2011, the London-based regulator said in a statement on its website today. Monthly payouts hit a high of 735 million pounds in May, the data show. In all, lenders have paid out 8.4 billion pounds in redress.
Lloyds Banking Group Plc and Barclays Plc are among U.K. lenders the regulator has ordered to compensate clients who were sold insurance on loans unnecessarily or without their knowledge. Britain’s four biggest lenders have set aside almost 11 billion pounds to cover the claims.
“We may be approaching saturation point for new claims,” said Jason Napier, an analyst at Deutsche Bank AG in London who estimates Lloyds will have to set aside a further 500 million pounds and Royal Bank of Scotland Group Plc another 400 million pounds for PPI when they report full-year earnings. “PPI payouts are slowing.”