City analysts reveal that the banks involved in the mis-selling of PPI policies could face up to £10bn in compensation claims.
The banks involved in the mis-selling of PPI policies could face up to £10bn in compensation claims, according to a number of City analysts.
According to the Telegraph, it mentions that some bankers think the number may end up being considerably higher than the initial estimation of £4.2bn from the FSA and fear that it could be closer to the £10bn mark or may even top it.
Some analysts at Deutsche Bank have warned that they anticipated redress claims to total approximately £8bn.
The news follows Lloyds reserving £3.2bn to cover PPI claims. Deutsche Bank have said that Barclays and Royal Bank of Scotland, which have the largest shares in PPI after Lloyds, may have to pay out £1.1bn and £1bn respectively. Some analysts predict these two banks may face up to £1.6bn. Bank shares for Lloyds, RBS and HSBC fell 8%, 3% and just under 1% respectively.
“In our view, the charges taken against the PPI issue would have been taken after discussions with the FSA and have a negative read-across to the other UK bank, which may be now expected to take similar charges,” mentioned Nomura analysts in a note to the clients.
The British Bankers’ Association (BBA) lost to the judicial review last month, against an attempt to revoke new regulation on the sale of PPI products, but have until the 10th May to appeal against the FSA’s verdict. Lloyds are the only bank so far to have already withdrawn from challenging the review