£353 million has been added to the provision to pay PPI compensation to customers of HSBC – an increase of 17% on the bank´s existing provision.
The additional provision to pay PPI compensation to customers of HSBC is noteworthy due to the double-digit percentage increase compared with the bank´s previous provision of £2.1 billion. Although all of the leading banking groups have recently increased their provision to compensate customers who were missold PPI, only HSBC has announced a double-digit percentage increase:
· The Lloyds Banking Group recently increased its existing fund by 9% when adding £900 million to its provision to pay compensation for the misselling of PPI.
· Barclays increased its provision for PPI compensation by 4% when setting aside an extra £170 million to its existing fund of £3.53 billion.
· The RBS Group made the smallest percentage increase to its provision for PPI compensation when increasing its existing fund by 3% to £3.2 billion.
By comparison, the additional £353 million put aside to pay PPI compensation to customers of HSBC represents a 17% increase on the existing provision. A spokesperson from the HSBC Group explained that the size of the additional provision was due to an increase in claims for PPI compensation caused by greater public awareness [of the bank´s role in the scandal].
The spokesperson was accurate in his appraisal of the situation. Banking groups such as Lloyds, Barclays and RBS have dominated the headlines in the financial press, while HSBC´s role in the scandal has been relatively ignored by the media. Customers of the HSBC bank may only now be scrutinising their credit agreements to see if they were missold PPI and entitled to claim compensation.
Despite the big percentage increase in the provision to pay PPI compensation to customers of HSBC, the bank´s compensation fund may have to be topped up again in the near future. The Financial Conduct Authority (FCA) recently reported that it had received 65,865 complaints from HSBC´s customers about how the bank had handled claims for PPI refunds in the first six months of the year – 23,620 more complaints than were received about the Lloyds Banking Group.Read More