26 Feb 2016
The Royal Bank of Scotland (RBS) have set aside an additional £2 billion to cover compensation payments for financial mis-selling and past misconduct. £1.5 billion has been set aside to cover litigation costs in the US for mis-selling toxic bundles of mortgage debt. The biggest case to be lodged against RBS involves government agency Federal Housing Finance Agency and could potentially end up with RBS being forced to pay out over £8 billion.
One of Investecs chief analysts has said that he expects state-backed Royal Bank of Scotland (RBS) to be hit hard. He has commented:
“Fines will be an ongoing drag on the banks, but more so on RBS than on anyone else. Depending on the size and timing of the fines, 2016 could be yet another loss-making year for RBS.”
The Bank has put an additional £500 million aside to cover PPI mis-selling costs – this is on top of the £4.3 billion already paid out to mis-sold PPI victims. These figures are announced as RBS is trying to clear its name after years of constant fines and litigation. CEO Ross McEwan has commented:
“I am determined to put the issues of the past behind us and make sure RBS is a stronger, safer bank. We’ve always been open about the scale of the past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long term value for our shareholders”.
RBS is not the only bank in deep water, Barclays face legal action from the Serious Fraud Office (SFO) as it is accused of bribing Qatari nationals to secure cash during the financial crisis. Unfortunately criminality is not few and far between, HSBC also face criminal charges in 2016 for allegedly helping its clients avoid tax.
Standards & Poor (S&P) have predicted that the UK’s ‘big four’ – RBS, Lloyds, Barclays and HSBC could have to pay out another £19 billion in the next few years, having racked up over £50 million since the financial crash in 2008.
Despite years of fines and constant litigation, it seems the big banks are yet to learn anything. When will this end!?
Seneca Banking Consultants have represented over 1,000 clients with claims for mis-sold complex financial instruments. We have provided evidence before the Treasury Select Committee as part of the inquiry in to SME lending. We are the market leader in this sector and provide expertise from the Banking, Investment and Legal sector.
We are uniquely placed to be able to offer a claims management solution to those who fear they may have been mis-sold a complex IRHP or Currency Swap. We are able to analyse their financial suitability, advise on the grounds for a claim and seek satisfactory redress if needed.
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