Will an Extra £300million be Enough for Barclays Mis-selling of PPI?
Covering themselves by adding a supplement of 300 million pounds to their kitty, in order to accommodate even more claims from their thousands of customers whom Barclays mis-sold PPI (payment protection insurance). Which they think is an ‘encouraging’ beginning to 2012; with this in mind they have made a pre-tax deficit of £457 million during the first quarter, a big difference to £1.66 billion profit at the start of 2011. Last year’s allowances amounted to one billion pounds to meet those PPI claims.
The 27th of April will see Barclay’s shareholders voting about Bob Diamond the chief executives forthcoming wage deal at their AGM, this also includes their other senior executives. It is expected that the majority of the bondholders will be against the proposed wage increases.
Barclays debt adjustments of 2.62 billion, is an indication as to what their losses might be if it had to recover its own debts. It falls under an accounting technique, therefore not a deficit.
Financial arrangements had to be made with the onset of a sharp increase of mis-sold PPI claims in the previous year, after Barclays disastrously lost a court case, pertaining to PPI written guidelines. This came out of years of campaigns by customers whom were mis-sold PPI to secure loan payments, should they not have been able to repay the bank due to redundancy, illness or death.
Mr Diamond, Barclays Chief Executive said, “Barclays first-quarter results are an encouraging start to the year and demonstrate continued progress across our execution priorities.”
He also included, “The environment in which we operate remains unpredictable but we have proven ability to adapt and grow our businesses in the face of external change. We will be proactive and seek to lead the agenda on recovery and resolution planning, which is a critical step to eradicate ‘too big to fail’, while continuing to remain closely engaged with regulatory agencies and governments.”
Overall Barclays bank explained possible profits as being motivated by, “strong performances in both retail and business banking and corporate and investment banking, with the non-investment bank businesses showing significant growth in adjusted profits”.
It will be left to the shareholders to decide if wage increases are merited, with so many outstanding PPI claimants still to be heavily compensated.