Barclay's in Trouble

Compensating Britons sold unwanted insurance policies could cost banks as much as 15 billion pounds after Barclays reported a spike in claims, forcing it to set aside a further 700 million pounds.

Britain's banks have now set aside more than 10 billion pounds to compensate customers wrongly sold payment protection insurance policies, one of the worst consumer financial scandals in British history, and bankers are concerned the bill could rise by at least 5 billion pounds more.

Barclays said on Thursday it had experienced higher than anticipated levels of PPI claims since the end of June, and had lifted its provision to 2 billion pounds, from 1.3 billion pounds.

Barclays shares closed down 1.5 percent, underperforming a flat European banking sector.

Barclays had paid out 1.2 billion pounds in compensation by the end of September, leaving 800 million pounds to cover expected future redress for customers.

 

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