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Banks set aside billions to cope with PPI fallout

Banks set aside billions to cope with PPI fallout

Category: Banking

Updated: 13/12/2012
First Published: 31/07/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The fallout of the payment protection insurance (PPI) scandal is proving costly for banks.

Following the alleged mis-selling of insurance policies for mortgage, loan and credit card products, banks have had to shell out billions of pounds to deal with millions of customers seeking compensation.

Latest figures suggest the UK 's five largest banks, Royal Bank of Scotland , HSBC, Barclays, Santander and Lloyds, have so far set aside a total of £8.8 billion to deal with demands for compensation.

HSBC announced yesterday that it had made a further provision of £340 million to cover the costs of claims.

The bank also revealed that an extra £450 million had been allocated to deal with fines relating to allegations of money laundering in the US . It is believed that weak controls had left the bank 'vulnerable' to global money laundering.

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