LONDON (Reuters) - Nationwide, Britain’s biggest customer-owned financial services group, set aside a further 45 million pounds to compensate victims of loan insurance mis-selling.
The cost of the compensation for the rising level of payment protection insurance (PPI) claims, along with higher impairment charges in Nationwide’s commercial lending division, led to a decline in first-half underlying profit to 151 million pounds, against 181 million pounds the previous year.
“Losses on our commercial property loans have increased over the past 12 months and, in addition, we continue to see elevated levels of PPI claims,” Chief Executive Graham Beale said on Tuesday.
Britain’s financial services industry could face a total bill of about 15 billion pounds to cover compensation payouts for one of the country’s biggest mis-selling scandals.
PPI policies were typically taken out alongside a personal loan or mortgage to cover repayments if customers fell ill or lost their job, but they were often sold to people who would not have been eligible to claim on the policies.
Reporting by Matt Scuffham; Editing by David Goodman