CYBG PLC (LON:CYBG), the owner of Clydesdale Bank and Yorkshire Bank, said it plans to increase the provision it has set aside for payment protection insurance claims by £350mln. The announcement comes ahead of the Financial Conduct Authority’s August 2019 deadline for complaints about the mis-selling of PPI.
CYBG will take a £202mln pre-tax charge in results for the first half ended March 31. The extra provision will result in a 100 basis point cut to its capital common equity tier 1 ratio, bringing it below its guidance range of 12-13%.
The company said the final amount it earmarks for PPI compensation claims is subject to the finalisation of its half year results.
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In the last six months, CYBG has received 59,000 complaints about PPI and expects further claims as the deadline approaches.
“The elevated level of complaints has been driven by a combination of factors including heightened media coverage, the FCA advertising campaign and increased activity by claims management companies,” it said.
The FCA recently launched another TV ad to persuade more customers to complain about PPI before the deadline. The ad features the robotic head of Hollywood actor Arnold Schwarzenegger that was included in its last TV ad.
Shares in CYBC fell 5.8% to 286p in morning trading.