UK banking group Barclays has put aside a further one billion pounds to cover compensation for mis-sold products in the fourth quarter, the company said on Tuesday morning.
Ahead of the group's full-year results next week, Barclays has warned that it has increased its provision for redress relating to interest-rate hedging products wrongfully sold to small- and medium-sized enterprises by another £400m for the final quarter of 2012. This takes the cumulative provision to £850m.
Meanwhile, the lender also said that it is providing a further £600m for Payment Protection Insurance (PPI) claims, mainly as a result of a "higher-than-anticipated response rate to pro-active mailings in Q4". Cumulative provisions for PPI redress now stand at £2.6bn.
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"Based on claims experience to date and anticipated future volumes, the provision represents Barclays best estimate of expected future PPI redress payments and claims management costs. Barclays will continue to monitor actual claims volumes and the assumptions underlying the calculation of the PPI provision," the firm said.
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