PPI scandal delivers £10 billion bill for the banks

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HSBC
HSBC has set aside another £1.3 billion to cover the cost of three scandals. Photo: Lewis Whyld/PA Wire

Another bank, another apology, another whopping amount of cash set aside to pay for mistakes of the past.

Now it's the turn of HSBC who, announcing their results today, revealed that they are setting aside another £1.3 billion to cover the cost of three scandals.

Some £152 million is being set aside to cover compensation for companies who should not have been sold 'swaps' - policies that were meant to protect them against interest rate increases.

Nearly £450 million is going to cover the cost of the money laundering scandal and another whopping £670 million will go towards compensating consumers who were mis-sold payment protection insurance.

That brings the total amount our banks have had to lay aside for the PPI scandal at an extraordinary £10 billion, on course to be the most costly consumer scandal ever. Around £5 billion of this is still to be claimed by consumers as not everyone who may have been sold a policy they did not want or need has appealed to get their cash back.

But it's believed that claims management companies have already cashed in to the tune of £1 billion, 'helping' people get their money back.

So far, according to the consumer campaigners Which?, the major banks have set aside the following amounts for the PPI scandal:

  • HSBC has put aside £1.1 billion
  • Lloyds has put aside £4.275 billion
  • Barclays has put aside £1.47 billion
  • RBS has put aside £1.2 billion
  • Santanderhas put aside £0.75 billion

It is far from over. On Friday, RBS is expected to announce it will put aside another £100 million or so.