Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.
BREAKING NEWS

Clydesdale shares plunge 20% after PPI provisions bombshell

Clydesdale shares plunge 20% after PPI provisions bombshell
FILE PHOTO: A man walks past a Clydesdale Bank in Edinburgh, Scotland, Britain February 3, 2016. REUTERS/Russell Cheyne -
Copyright
Russell Cheyne(Reuters)
Euronews logo
Text size Aa Aa

LONDON (Reuters) – Shares in Britain’s Clydesdale Bank <CYBGC.L> tumbled by a fifth on Thursday, after the lender made a fresh 300-450 million pounds provision to settle mis-selling claims linked to Britain’s most expensive consumer banking scandal.

The lender, which also owns the Yorkshire and Virgin Money brands, said late on Wednesday it had received an “unprecedented volume” of complaints from customers seeking compensation for mis-sold payment protection insurance (PPI) before a claims deadline on August 29.

During August alone, CYBG said it had received more than eight months’ worth of Information Requests, with 340,000 in aggregate over five weeks. Some 120,000 complaints were received in the three days before the deadline.

Analysts said the additional provision could put Clydesdale’s future dividends at risk.

“Given management’s credibility is challenged on PPI, investors are likely to avoid this share until results on November 28”, Jefferies said in a client note.

“Potential capital distributions are likely off the table for Full Year 2019.”

CYBG did not immediately respond to a request for comment on the threat to its capital distribution plans but said in its statement the charges would still leave its key capital ratios above regulatory requirements.

(Reporting By Sinead Cruise, editing by Iain Withers)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.