Clydesdale Bank facing further £500m hit to cover mis-selling
Clydesdale Bank is to set aside up to £500 million this year to cover compensation claims for mis-sold financial products.
The bank, which was fined £20.6 million by the Financial Conduct Authority in April for “serious failings” in its handling of payment protection insurance claims, set aside £800 million to cover mis-selling claims last year.
National Australia Bank (NAB), which owns the Clydesdale and Yorkshire banks in the UK, said it plans to set aside between £350 million and £500 million to cover claims this year, though admitted the final sum could not yet be determined.
It expects to make provisions this year of between £290 million and £420 million to cover payment protection insurance (PPI) mis-selling and between £60 million and £80 million to cover claims for mis-sold interest rate hedging products.
NAB notes in a third-quarter trading update it will fund the latest provision from a £1.7 billion compensation fund it has been forced by UK regulators to set up to cover mis-selling claims as it looks to demerge its UK banking arm via a stock market listing.
NAB, which acquired Clydesdale Bank in 1987 and Yorkshire Bank in 1990, plans to de-merge its UK banking division by the end of the year.
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