The owner of Clydesdale Bank has revealed it has set aside a further £450 million to compensate customers who were mis-sold payment protection insurance (PPI).
Glasgow-based CYBG, spun off from National Australia Bank (NAB) in February, said the increased provision will see it take a pre-tax charge of £44m for its results covering the six months to the end of March, with the balance being funded by its former parent.
In a statement following the publication of half-year results from NAB, CYBG – which also owns the Yorkshire Bank brand – said it had total cover for “legacy conduct matters” as of 30 September totalling £2.1 billion, through a combination of on-balance sheet provisions and an indemnity provided by NAB.
The lender was last year fined a record £20.7m by the City watchdog for “serious failings” in the way it handled PPI complaints.
It added: “As at 31 March 2016 total cover had reduced by £328m through the utilisation of provisions. CYBG considers that, based on our updated assumptions, the total cover remaining of £1.8bn is sufficient to cover the costs of dealing with legacy conduct matters.”
More details will be provided when CYBG posts its first-half results on 24 May.