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RBS adds another £125m to its PPI provision

RBS adds another £125m to its PPI provision

Category: Mortgages

Updated: 17/12/2012
First Published: 04/05/2012

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 It is now over 6 months old so the content may be out of date.

Royal Bank of Scotland (RBS) has become the latest bank to put more money aside to pay customers mis-sold payment protection insurance (PPI).

The bank said that it has set aside an extra £125 million to pay for PPI claims, taking the total RBS provision to £1.2 billion.

Earlier this week, Lloyds Banking Group revealed it has set aside another £375 million for PPI claims, while Barclays has upped its provision by £300 million.

The news came as RBS revealed that it made a pre-tax loss of £1.4 billion in the first quarter of the year, compared with a loss of £116 million during the same time last year.

The nationalised lender said that a change in valuation of some of its debt had driven much of the loss.

The bank increased its mortgage lending to first time buyers during the period, as many buyers brought forward purchases to take advantage of the stamp duty holiday.

It helped boost gross mortgage lending for the first quarter to £4 billion.

In addition, £14.3 million worth of loans was extended to UK businesses, including £7.9 billion which was lent to small and medium-sized firms – up 18% from the first quarter of 2011.

"We are happy with progress in the first quarter though the economic and regulatory backdrop remains tough," said Stephen Hester, group chief executive.

"RBS continues, markedly, to regain strength and resilience. Our focus is on improving the future for customers and our business whilst ensuring that the bank's past issues are dealt with."

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