UK: Lloyds, Barclays, HSBC and RBS ‘set to take mis-selling hit’

Britain’s top four banks are reportedly set to take another �1billion hit for mis-selling payment protection insurance - bringing the industry total to nearly �8bn.

Lloyds Banking Group, Barclays, HSBC and Royal Bank of Scotland will all disclose additional charges for the period between April and June in their half-year results.

Lloyds and HSBC, which report on Thursday and Monday respectively, will say that they set aside more than their PPI provisions for the first quarter of �375million and �300m, Sky News said.

RBS is expected to confirm that it is making a further allocation similar to its �125m first-quarter charge when it reports on August 3, while only Barclays is expected to allocate a smaller sum than its earlier �300m provision on Friday.

The latest figures will underline the serious impact the mis-selling scandal has had on Britain’s biggest banks and comes amid calls for an overhaul of the industry’s culture and business practices following the rate-rigging scandal.

Britain’s top lenders have also been accused of mis-selling complex interest rate hedging products - known as swaps - and have agreed to pay compensation.

Taxpayer-backed Lloyds will have paid out at least �4bn alone for its mis-selling activity and will face questions over its involvement in the Libor-fixing scandal when it reports on Thursday.

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Lloyds has previously admitted to “assisting the regulators” with their Libor investigations but would not comment further.

If the Financial Services Authority uncovers evidence of rate-rigging, the bank could face a multi-million pound fine, possible compensation claims and reputational damage.

But despite the difficult climate the bank is set to announce broadly flat underlying pre-tax profits of �1bn for the first six months of the year.

Meanwhile, Barclays has endured one of the most turbulent periods in its history after it was fined �290m by UK and US regulators for manipulating the Libor.

The affair led to the departure of chief executive Bob Diamond, triggered a fierce debate in Westminster over banking ethics and has spawned several closely-watched hearings before the Treasury Select Committee.

Marcus Agius, who will resign once a successor for Mr Diamond is found, will present the group’s interim results in his temporary role as executive chairman.

He will hope the figures, which are forecast to show a 10% rise in underlying profits, to �4.1bn, will go some way towards appeasing investors, who have seen the share price plunge 20% since the scandal broke.