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UK's largest banks face bulk of £19.5B conduct bill in 2016, S&P estimates

Standard & Poor's Ratings Services expects 2016 to bethe last year in which U.K. banks experience "mega" conduct andlitigation issues.

In its base-case forecast, the rating agency predicted thatBarclays Plc,HSBC Holdings Plc,Lloyds Banking GroupPlc and Royal Bank ofScotland Group Plc will collectively incur additional charges of£19.5 billion over the coming two years, with most of these provisions to becharged in 2016. It calculated that the four banks incurred charges of £55.8billion between 2011 and 2015, including £14.6 billion in 2015.

S&P does not expect to lower its ratings on theselenders in the coming two years as a direct consequence of conduct andlitigation issues, as they have improved underlying earnings capacity and builtup sufficient capital buffers.

S&P Ratings andGlobal Market Intelligence are owned by McGraw Hill Financial Inc.