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Co-op Bank estimates additional charge of up to £75M for PPI redress

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Co-op Bank estimates additional charge of up to £75M for PPI redress

Co-operative Bank PLC estimates a preliminary and unaudited additional charge of £55 million to £75 million regarding the redress of mis-sold payment protection insurance and associated operational costs.

The British lender noted that it will take several months to process the volumes of inquiries for mis-sold payment protection insurance, or PPI, it received in August, while it will also determine the quality of the complaints, which remain uncertain for the time being.

Co-operative Bank said it expects to disclose a more accurate figure in its trading update for the third quarter. However, it is likely the majority of processing will not be completed until the first half of 2020.

As a result, the lender expects its 2019-end common equity Tier 1 ratio to stand at between 19.5% and 20%, which is lower than the anticipated figure of approximately 20.5% that it disclosed in its interim results. The revised CET1 ratio remains higher than the original guidance of roughly 19% for 2019.

As of June 30, Co-operative Bank had an outstanding PPI provision of £38.7 million, including provision for official receiver complaints.