The Payment Protection Insurance scandal is continuing to plague the major banks after Santander were forced to set aside a further £450 million in order to pay back compensation to those who were mis-sold.
The top up – which represents Santander’s first for about 12 months- comes as RBS added another £500m to its PPI fund and forces Santander to a fourth quarter loss of over £80m.
Santander has set aside £1.5bn altogether now, but Wednesday’s top up is expected to be the last, and now represents a huge £13bn put aside so far.
The FCA are currently proposing a 2018 deadline for all PPI claims and on how to deal with any breaches of the Consumer Credit Act. Santander’s UK branch has reported a fall in last year’s profits from £1.4bn as a result of the PPI charge.
Santander has grown its business rapidly over the last decade or so; buying up Abbey, Alliance & Leicester and sections of Bradford & Bingley. It has been attempting to compete with Lloyds, RBS, Barclays and HSBC.