Santander makes €620 million PPI provision for UK business
The Spanish Bank, Santander, has seen profits for the first six months of this year slashed after being forced to follow the example of other banks operating in the UK and set aside money to cover potential claims about mis-selling payment protection insurance (PPI).
Santander has agreed to set aside €620m to cover possible PPI claims affecting its UK business. The provision has meant that interim profits fell by 21 per cent to €3.5 billion. Without the one-off payment net profit would have fallen by seven per cent.
Santander has followed the lead of other banks operating in the UK such as Lloyds, Barclays and RBS who were told by the Financial Services Authority (FSA) earlier this year to contact customers who may have been affected by the mis-selling scandal and make provision in their finances for compensation claims.
Santander is planning to list in the UK when market conditions improve and it is thought that the decision to set aside funds for potential PPI compensation is in part an initiative to clean up the companies’ books before a sale.
The recent stress tests on European banks by the European Banking authority (EBA) revealed that Santander is currently one of the most solvent banks in Europe.
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- misselling ,
- news ,
- payment protection insurance ,
- ppi ,
- santander
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