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RBS raises PPI claims bill by a further £400m RBS raises PPI claims bill by a further £400m
(35 minutes later)
Royal Bank of Scotland has set aside a further £400m to cover the cost of claims for mis-sold payment protection insurance (PPI).Royal Bank of Scotland has set aside a further £400m to cover the cost of claims for mis-sold payment protection insurance (PPI).
It takes the bank's total charges for PPI mis-selling to £1.7bn.It takes the bank's total charges for PPI mis-selling to £1.7bn.
The figures were disclosed as RBS reported a pre-tax loss of £1.26bn for the three months to 30 September, against a £2bn profit a year earlier. The figures were disclosed as href="http://www.rbs.com/news/2012/11/interim-management-statement-for-q3-2012.html?utm_source=rbscomhomepage&utm_medium=promolink&utm_campaign=2012Q3IMS" >RBS reported a pre-tax loss of £1.26bn for the three months to 30 September, against a £2bn profit a year earlier.
Despite the losses, chief executive Stephen Hester said that RBS was "making progress".Despite the losses, chief executive Stephen Hester said that RBS was "making progress".
RBS, which is 80%-owned by the UK government, has also set aside another £50m to cover the cost of compensation of the recent computer systems failure that hit customers. The bank, which is 80%-owned by the UK government, has also set aside another £50m to cover the cost of compensation of the recent computer systems failure that hit customers.
The bank's bill for the computer glitch, which locked many RBS, NatWest and Ulster Bank customers out of their accounts, now totals £175m.The bank's bill for the computer glitch, which locked many RBS, NatWest and Ulster Bank customers out of their accounts, now totals £175m.
On Wednesday, Lloyds Banking Group revealed a fresh £1bn provision for PPI claims. Along with the RBS provision, the total bill for UK banks of the PPI scandal is now £10.8bn.On Wednesday, Lloyds Banking Group revealed a fresh £1bn provision for PPI claims. Along with the RBS provision, the total bill for UK banks of the PPI scandal is now £10.8bn.
RBS's operating profits for the third quarter, which discount the mis-selling and other charges, were £1bn, up from a £650m profit in the second quarter. RBS also warned on Friday that it could be hit with stiff penalties over any involvement in the alleged manipulation of the Libor inter-bank lending rate.
The bank said it had seen lower bad debt charges, and re-stated that its restructuring after a near-collapsed during the global financial crisis would be completed in the next 18 months. The bank said it expected to enter into negotiations to settle some Libor investigations in the "near term", and that although the size of any fine was uncertain it could be big enough to have a "material" impact.
RBS is also embroiled in the scandal over alleged manipulation of the Libor inter-bank lending rate. The bank said it expected to enter into negotiations to settle some Libor investigations in the "near term", but that the amount of possible fines was uncertain. RBS's operating profits for the third quarter, which discount the PPI mis-selling and other charges, were £1bn, up from a £650m profit in the second quarter.
'Reputational issues'
The bank said it had seen lower bad debt charges, and re-stated that its restructuring after a near-collapse during the global financial crisis would be completed in the next 18 months.
Mr Hester said: "The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully.
"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."
He said that RBS "too often came to be seen" as putting the short-term interests of shareholders and staff ahead of customers, and promised to reverse the balance.
Despite the furore over bank lending to small and medium sized enterprises (SMEs), RBS maintained that its record was strong.
In the third quarter gross new lending increased by 3% compared with the second quarter. Overall gross new lending for the first nine months of 2012 was £62.9bn to UK businesses, of which £28.6bn was to SME customers.
However, RBS said there was a 25% fall in SME loan applications in the third quarter, compared with the same three months in 2011. This was due, the bank said, to uncertainty over UK economic growth and the effect of the Olympics.