Barclays Plc (BCS, BARC.L) announced provisions for Interest Rate Hedging Products or IRHP and Payment Protection Insurance or PPI.
Following the outcome of its pilot review of IRHP sold to small and medium-sized enterprises, and the Financial Services Authority's report on this review and those conducted by a number of other banks, the British lender has increased its provision for IRHP redress by 400 million pounds at the 2012 fourth quarter, bringing the cumulative provision to 850 million pounds, of which 36 million pounds had been utilised as at December 31, 2012. The main review and redress exercise would begin shortly and the appropriate provision level would be kept under ongoing review as it progresses.
The Bank has decided that it is appropriate to provide a further 600 million pounds for PPI redress, chiefly resulting from higher than anticipated response rate to pro-active mailings in the fourth quarter. This brings the cumulative provision to 2.6 billion pounds, of which 1.6 billion pounds had been utilised as at December 31, 2012. Based on claims experience to date and anticipated future volumes, the provision represents Barclays best estimate of expected future PPI redress payments and claims management costs.
The company said it would continue to monitor actual claims volumes and the assumptions underlying the calculation of the PPI provision.
Separately, Barclays PLC and Barclays Bank PLC announced the appointment of Diane de Saint Victor as a non-executive director of Barclays, effective March 1, 2013.
Diane is currently General Counsel and Company Secretary and a member of the Group Executive Committee of ABB Limited, the publicly listed international power and automation technologies company based in Switzerland, where her responsibilities include Head of Legal and Integrity Group.
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