Clydesdale Bank makes another £403m provision to cover PPI claims

CYGB, which also includes the Yorkshire Bank brand, had previously extended its provisions for PPI by £150 million in May.

This week’s increase now takes the total budget for claims on mis-sold Payment Protection Plans at Clydesdale and Yorkshire Banks to £2.2bn.

The lender said that the move also comes after it found an unexpectedly high number of new claims being lodged.

The surge in queries comes on the back of a deadline for PPI repayments, which has been set for August 2019.

A publicity campaign to encourage applications has also received extensive media coverage.

CYBG also said that extra funds are necessary following a review of costs of existing PPI claims.

It has also set aside more than £300m for other mis-sold financial products.

The funds being set aside this month will be largely funded by the former parent company of Clydesdale and Yorkshire.

National Australia Bank committed to meet more than 90% of the legacy costs from mis-selling when it floated CYBG on the London and Sydney stock markets in February 2016.

The arrangement leaves CYBG having to provide £39m of the new funds for PPI mis-selling.

CYGB said: “At 30 September 2017 CYGB has, through a combination of on-balance sheet provisions and the indemnity provided by NAB, utilised cover of £671 million for legacy conduct matters.

“CYGB considers that, following the recent completion of the past business review, the substantial completion of the remediation programme, and based on our updated assumptions, the unutilised cover is sufficient to cover the costs of dealing with legacy conduct matters.”

CYGB will set out its full-year results on 21 November.