UKAR makes £33 million provision for mis sold PPI
UK Asset Resolution (UKAR), set up after the failure of the lenders Northern Rock and Bradford and Bingley has repaid another £3.7 billion to the government as it posted an 11% jump in profits to £1.4 billion for the year ending March 2015. This performance means it is more profitable than the Royal Bank of Scotland, TSB and Virgin Money combined! The company was set up in 2010 to manage the risky loans issued by Bradford and Bingley and Northern Rock before they were nationalised.
Its total repayments since formation now amount to £14.1bn and almost 30% of the government loans have now been repaid with £34.6bn still outstanding. The UKAR mortgage accounts are also improving in quality as accounts with three or more months in arrears have reduced by 70% since UKAR was formed. This is due to improvements in the wider economy with an increase in the numbers of people in work and able to pay their mortgages on time.
UKAR has also revealed that it had set aside another £33 million for compensation for mis sold payment protection insurance for the next three years.
Solicitor Paul Cahill comments:
“On the face of it, this is a good news story. The bank set up by the government during the financial crisis to manage the toxic loans issued by Northern Rock and Bradford and Bingley has turned in a profit exceeding that of the Royal Bank of Scotland for example. Yet this good news is marred by the revelation that UKAR has made provisions of £33 million for PPI mis selling. Whilst UKAR reports that the flow of complaints has ‘reduced considerably’ this is still a significant sum. This shows the PPI mis selling scandal is far from over as there remain significant numbers of people yet to reclaim mis sold PPI.”
Content correct at time of publication