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Nationwide Building Society to set aside up to £50M in extra PPI provisions

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Nationwide Building Society to set aside up to £50M in extra PPI provisions

Nationwide Building Society expects to book an incremental charge in the range of £20 million to £50 million for payment protection insurance compensation after it received a higher than expected volume of complaints and inquiries in the run-up to the Aug. 29 deadline for filing complaints.

The company, which already set aside £80 million as of April for future costs in relation to PPI, said the final amount of the additional provision could be above or below that range, as the processing of complaints and inquiries are still ongoing.

Despite the potential added charge, the building society said the upper end of the range is not significant to its financial position, adding that the amount represents approximately 15 basis points and 2 basis points on its common equity Tier 1 and leverage ratios, respectively.

The announcement follows similar statements by other large U.K. banks, with Barclays PLC, Lloyds Banking Group PLC, Royal Bank of Scotland Group PLC and CYBG PLC also set to increase provisions for PPI claims.