MSE News: Banks put PPI claims on hold in defiance of regulator

debt55

Alpine_Star wrote: »

This is truly desperate.

If you really believe that the court has struck some kind of corrupt deal with banks and that somehow Mr Lewis should and could morph into the Caped Crusader and save the world from this imaginary evil then perhaps you'd feel more at home here http://www.elvis-is-alive.com/

haha you are amusing, like a clown

Cardinals

Mr Daniels doesn't seem to think he will be paying back much PPI:

Lloyds sees increased profits on mortgages

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Taxpayer-backed Lloyds Banking Group today said moves to increase rates on new mortgages and borrowers switching from cheaper fixed-rate deals was driving higher profits on home loans.

Lloyds, which is 41% owned by the Government, saw increased income in its retail banking arm during the third quarter thanks to greater mortgage margins.
Borrowers reverting on to standard variable rates and raised rates on new lending helped offset "subdued" demand for home loans, according to the group.
The Halifax and Cheltenham & Gloucester owner said it had a "good" third quarter overall thanks to further declines in losses on loans turned sour since the half year, when it reported profits of £1.6 billion.
Lloyds said it was pricing new mortgages to "more appropriately reflect risk and funding costs", hitting first-time buyers and home-movers.
But the bank stressed that interest rates were still below the average seen before the credit crunch in 2007.
The third-quarter performance has kept Lloyds on track for a "good financial performance" for the full year.
Lloyds said earlier this year that it was on course for annual profits - which would mark its first full-year surplus since being bailed out by the taxpayer at the height of the financial crisis.
Chief executive Eric Daniels, who last month announced plans to retire in 2011, said: "I am pleased to report that we had a good third quarter in our core business as we continue to deliver against the group guidance we provided at the interims."
But Lloyds has come under pressure in recent days as banking experts have speculated on the potential bill the group could face for claims relating to controversial payment protection insurance (PPI), with one analyst estimating it could be forced to pay up to £1.5 billion.
The company is among a group of major banks backing a British Bankers' Association move to seek a judicial review against rules on PPI compensation.
Mr Daniels said he believed the banks had a "very good case" and "don't believe there will be a charge".
Lloyds also signalled today that it would not need to raise more capital to meet tough new rules on capital strength under the so-called Basel III plans.
There had been fears that other UK banks would follow the lead of Standard Chartered, which recently announced aims to tap shareholders for cash to help bolster its balance sheet to take the new regulations into account.

robbedofmymoney

i suppose it really depends on how you read into his comments,
he is not saying he is not going to be paying out ppi refunds, he is merely saying he does not expect there to be a change in the rules the FSA are trying to introduce.

and of course he would not openly say they would be liable for such a large payout as this would hit the group share value instantly aand cause chaos.

after spending a long time going over the banks case the BBA have put forward i can honestly say i see nothing for the FSA and FOS to worry about.

it may take a bit of time after appeal (by the banks) but ultimately they don't really have a credible arguement.

Cardinals

He is referring to the £1 billion impairment charge Lloyds should make in their accounts if they believe they will have to pay out the claims.

robbedofmymoney

Cardinals wrote: »

He is referring to the £1 billion impairment charge Lloyds should make in their accounts if they believe they will have to pay out the claims.

sorry, i thought it said change, not charge,
either way he will not admit Lloyds will have to put aside £1.5bn for this,

Sampras

I always the thought the directors of a company had a legal responsibility to account for any bad debt provisions/material impairments. If the dirtectors fail to acccount for such expenses and the auditors dont pick up on it then they are both in deep soup. Could it be that LTSB really do believe they are about to get away with this one?

debt55

Sampras wrote: »

I always the thought the directors of a company had a legal responsibility to account for any bad debt provisions/material impairments. If the dirtectors fail to acccount for such expenses and the auditors dont pick up on it then they are both in deep soup. Could it be that LTSB really do believe they are about to get away with this one?

lol, you need to go back 2 years and read what the chaps at the helm of bear sterns and lehman bros said weeks before they went bust.

biggest gangsters on the planet.

Alpine_Star

Sampras wrote: »

I always the thought the directors of a company had a legal responsibility to account for any bad debt provisions/material impairments. If the dirtectors fail to acccount for such expenses and the auditors dont pick up on it then they are both in deep soup. Could it be that LTSB really do believe they are about to get away with this one?

There is a provision at the end of the accompanying press release which deals with it, under the heading Forward Looking Statements:

''The Group’s actual future business, strategy, plans and/or results may differ materially from those expressed or implied in these forward looking statements as a result of a variety of risks, uncertainties and other factors, including, without limitation..............exposure to regulatory scrutiny, legal proceedings or complaints.......''

http://www.lloydsbankinggroup.com/media/pdfs/lbg/2010/2010Nov2_LBG_IMS.pdf

steveh31

Banks fear big rise in £4.4bn PPI bill

By Josephine Cumbo
Published: November 2 2010 23:44 | Last updated: November 2 2010 23:44

Banks say the cost of implementing new complaint handling measures for payment protection insurance could be “substantially” more than regulator’s estimate of £4.4bn.
The warning of a “very substantial” impact for PPI sellers is made by the British Bankers’ Association in its 89-page application for an “urgent” judicial review of new regulatory measures due to come into force within weeks.

The application was lodged with the High Court last month, but the full grounds for the banks’ challenge are only just emerging. The key basis of the legal challenge, according to the documents, is the Financial Services Authority’s requirement for its new guidance to be applied retrospectively on PPI sales made before the regulation.
“The scale and impact of the FSA’s decision upon the industry is very substantial,” said the BBA in its application.
“The FSA estimated the cost of its proposals could amount to £3.2bn in respect of reviewing past sales, with £1.2bn in respect of new complaints handling rules. [But] the FSA’s figures are based on the assumption that only 20 per cent of customers would respond to any given customer contact exercise.”
The BBA said that if this estimate proved to be conservative, or if allowance was made for compensation and costs in respect of sales before January 2005, then those figures could “substantially increase”.
The FSA has yet to fully respond to the BBA application, but has said that it would “vigorously” contest the challenge.
US investment bank Morgan Stanley has estimated the cost to UK banks of PPI mis-selling to be up to £5.1bn. However, Morgan Stanley said these costs would be “manageable” and could be helped by the judicial review.
“The review benefits banks [in the] near term by allowing delay in paying claimants and deterring future claims,” said Morgan Stanley.
PPI is designed to meet repayments for credit cards, personal loans and other unsecured debt if the borrower is ill, has an accident or is made redundant.
But the FSA has identified problems with the sale of PPI with more than 1m complaints made to firms over the past five years.
Its new rules, due to come into force on December 1, would see new complaints “handled properly and redressed fairly where appropriate”.
But the BBA said “banks could not be reasonably expected to apply the new rules from December while they were actively seeking to have the guidance quashed”.
Since initiating legal proceedings last month, banks involved in the review have halted processing complaints affected by the action until the High Court hearing, likely to be early next year.


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robbedofmymoney

sorry butt.................................... i am only posting to keep this thead at the top because it's important:D:T:rotfl::)