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Big UK banks face further misconduct charges

Apr 27 2015 17:00

London - Britain's biggest banks face another $29bn of charges relating to past misconduct over the next two years, ratings agency Standard & Poor's (S&P) said in a report on Monday.

S&P said Britain's banks and customer-owned lenders had incurred £48bn in misconduct and litigation charges over the past five years.

Britain's four biggest banks - Barclays, HSBC , Lloyds Banking Group and Royal Bank of Scotland - accounted for £42bn of that total, equivalent to about 7.5% of their revenues, S&P said.

S&P said the mis-selling of payment protection insurance (PPI) on loans and mortgages had so far cost the banks more than £26bn. It expects banks to face over £5bn of further PPI charges in the next two years.

Banks also face litigation charges arising from investigations into the alleged rigging of foreign exchange markets and benchmark interest rates and probes into breaches of anti-money laundering controls.

S&P said it believed the affected banks had sufficient capital buffers to cope with the charges.

The charges came on top of almost £16bn spent by the banks restructuring their business models following the 2007/2009 financial crisis and £5bn of expenses relating to the government's bank levy, S&P said.

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