Another £400m Into RBS’ PPI Compensation Fund, Says Missoldppiclaims.info

The Royal Bank of Scotland has earmarked an additional £400m to cover the cost of compensation and refunds relating to mis-sold payment protection insurance (PPI), says leading PPI Claims Company Missoldppiclaims.info.

The nationalised bank has released figures for the last quarter showing a pre-tax loss of£1.26bn, a proportion of which is due to the allocation of a further £400m to its PPIcompensation fund. In a move echoed around the banking industry in recent months, RBS now has increased its total PPI allocation to now stand at £1.7bn. However, it is unlikely to be the end of the compensation claims for the beleaguered bank.

Its recent computer problems resulted in significant numbers of RBS, Natwest and Ulster Bank customers being locked out of their accounts for days, a mistake which has cost£175million so far with a further £50m of compensation put aside.

RBS is also part of an investigation by regulators in the UK, US and Asia – including the fraud division of the US justice department – over the part it played in the manipulation of the LIBOR inter-bank lending rate. With settlement negotiations imminent, the fines that could potentially be applied RBS believe could have a “material” impact on the company.

Despite the problems, RBS showed operating profits for the third quarter increased from£650m to £1bn, while bad debt fell by £159m and staff costs were 5% lower due to a 7% reduction in staff.

Stephen Hester, chief executive of RBS, said: “The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully. The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank’s safety and soundness has advanced so well.”

A spokesperson for leading PPI Claims Management Company, Missoldppiclaims.info said: “It’s good to see RBS recognising its responsibilities towards customers that were mis-sold PPI policies, in particular the responsibility to put customers first and treat them fairly. This can be seen in its decision to increase lending to its business customers even though there was a downturn in loan applications, but it would be good to see a similar helpful response to borrowing for its non-business customers with personal loans and residential mortgages.

The reputational issues Mr Hester refers to are likely to be industry criticisms that RBS customers play second fiddle to the short-term interests of shareholders and staff. As a result, RBS has relaxed its lending position towards its small and medium (SMEs)businesses, which has led to a an increase of new lending by 3% since the second quarter despite a 25% drop in SME loan applications due to the Olympics and doubts over the stability of the UK economy.

Analyst Richard Hunter, head of equities at Hargreaves Lansdown, said: “There is no doubting the immensity of the task RBS has faced in executing its turnaround plan, nor indeed the progress made so far.”

Via EPR Network
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Johnson, Morgan and White says that the holidays are recovery time

Recovery firm Johnson, Morgan & White (JMW) reminds business debt holders that the holidays are often a boon for more than just retail sales. Many businesses see much of their annual profits coming in during this time of year and are more willing to work with recovery efforts.

Johnson, Morgan & White CEO and President Robert G. Cooper says that consumer spending the trickle-down effect it has on many businesses, not just those in retail and supply, can mean a higher likelihood of debt recovery this time of year.

“Many businesses have had a rough year this year,” says Cooper. “A slow economic recovery, lackluster consumer spending, and political strife have all been bitter pills to swallow for many businesses in Boca Raton, Florida, and the nation. The good news is that the holiday season is often when many business, from retail to supply to services and more, will see big income spikes. This can mean a good chance for debt recovery as those businesses try to clean the slate for the new year.”

Last year, Johnson, Morgan & White collections were up, despite a less amenable economic outlook, and speed of recovery – the time from first contact by a collector and payment – was nearly double in the fourth quarter.

“Most creditors can expect a higher chance of recovery this time of year,” says Cooper. “It is, however, a delicate process and outstanding debt that has not been collected can often be better serviced by a discreet, professional third party. This often saves business relationships and speeds up collection times.”

The holidays aren’t just a time to celebrate with friends and family, they can also be a time to lift the worries of debt and look forward to a new year.

Via EPR Network
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