Royal Bank of Scotland (RBS) has warned that an unprecedented number of PPI claims in the run up to the August deadline could cost it up to an extra £900m.
Read more: Banks buckle under the strain of PPI claims
RBS expects to take an additional charge of between £600m and £900m relating to the mis-selling of payment protection insurance (PPI).
The bank, which is part-owned by the UK taxpayer, had already set aside £5.3bn to the end of June for PPI claims, £4.9bn of which it had spent.
But a flood of complaints before the 29 August deadline means the scandal will cost the bank much more.
“The volume of claims received during August was significantly higher than expected, with a further spike in the final days leading up to the deadline of 29 August 2019,” the bank warned investors today.
“RBS therefore now expects to make an incremental charge for PPI claims, in addition to the provisions recorded to 30 June 2019, in the range of £600 million to £900 million in its Q3 2019 results, which takes into account claims by the Official Receiver.”
Several high street banks including RBS experienced technical issues in the final days of PPI, as consumer claims flooded in to send huge amounts of traffic to lenders’ servers.
The summer deadline for PPI claims brought a major financial scandal to a close.
PPI saw banks and loan providers mis-sell customers policies they did not need between 1990 and 2010.