Clydesdale Bank faces soaring mis-selling bill

Clydesdale Bank could see its latest mis-selling bill rise even higher. Picture: TSPL
Clydesdale Bank could see its latest mis-selling bill rise even higher. Picture: TSPL
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CLYDESDALE Bank could see its latest £500 million mis-selling bill rise even higher as more customers claim compensation, according to a firm that specialises in sec­uring redress.

CLYDESDALE Bank could see its latest £500 million mis-selling bill rise even higher as more customers claim compensation, according to a firm that specialises in sec­uring redress.

Clydesdale Bank chief executive David Duffy. Picture: PA

Clydesdale Bank chief executive David Duffy. Picture: PA

The Glasgow-based lender, which is to be spun off from parent National Australia Bank (NAB), has already racked up more than £800m in costs related to payment protection insurance (PPI) claims, and NAB last week said it was facing a further hit of between £290m and £420m to redress customers who bought the policies.

In addition, the bank, led by chief executive David Duffy, will have to take a further provision of between £60m and £80m in its full-year results to cover compensation for business customers that were sold interest rate swaps – complex products marketed as protection against rising rates, but which led to a sharp increase in charges when borrowing costs fell.

Daniel Hall, managing dir­ector of claims-handling firm All Square, said: “The amount of liability may yet be increased again as more businesses become aware of this issue and approach the bank to claim.”

NAB has said that any provisions booked in its results for the year to the end of September would form part of the £1.7 billion figure that the Prudential Regulation Authority has already told it to pump into Clydesdale – which also owns the Yorkshire Bank brand – for “future legacy conduct costs”.

These are ring-fenced funds, which will reduce by whatever the final figure is at the year-end

Clydesdale Bank spokesman

A Clydesdale spokesman said: “These are ring-fenced funds, which will reduce by whatever the final figure is at the year-end.”

In April, Clydesdale was fined a record £20.7m after the Financial Conduct Authority found “serious failings” in the way it handled thousands of PPI complaints.