Clydesdale and Yorkshire Banking Group (CYBG) announced they will provide an extra £350m to their PPI refund pot after an increase of 59,000 complaints in the first quarter of 2018. According to the banking group, heightened media presence and the Financial Conduct Authority (FCA)’s advertising campaign had helped increase its refund cases.
The banking group lost shares by 6% after it made its investor announcement regarding its “legacy PPIc costs.” The £350m addition dents its profits and the PPI scandal will continue to impose against its yearly income until 2019.
National Australia Bank, CYBG’s parent company, will handle £148m, almost half of the entire refund allocation. However, CYBG is left to handle the remaining £202m. Experts see the relationship between the offshore and parent company as troubled because the lack of support for refunds to CYBG makes it a “bit of a disaster.”
PPI is the UK’s biggest financial scandal. The collective value the industry has lost to mis-sold PPI is at a staggering £40 billion, the largest in the UK’s history. However, the true value might be higher according to St John Building’s barristers. They claim the Plevin case owes customers more because typical refund awards are about 20% of the original insurance value only through the FCA’s PPI claims process.