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RBS increases PPI claims bill by £400m

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A further £400 million has been set aside by Royal Bank of Scotland RBS to cover the cost of claims for customers who were wrongly sold payment protection insurance (PPI).

Taking the financier’s total charges for mis-selling the insurance package to 1.7 billion, the figures presented a further financial blow to the company.

RBS has already reported a pre-tax loss of £1.26 billion for the three months to September, compared with a £2 billion profit in 2011.

It comes after Lloyds Banking group announced an extra £1 billion provision for PPI compensation – taking the total bill for UK banks to £10.8 billion.

In addition, RBS is heavily involved in the scandal over the reported manipulation of the Libor inter-bank lending rate, which hit headlines earlier this year.

However, the financier said it is restructuring following a near-collapse during the global financial crisis and this will be completed in the next 18 months.

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