Barclays' Dublin hub 'safe' despite £1bn insurance hit
BARCLAYS' decision to set aside £1bn (€1.14bn) to compensate customers who were mis-sold payment protection insurance (PPI) will have "no impact" on the bank's Dublin insurance hub, the UK giant insisted last night.
Barclays' Dublin unit carried out the underwriting of the PPI products in question, a lucrative business that enabled Dublin to send home dividends of £330m as recently as 2008.
The PPI products have come under fierce scrutiny in the UK in recent years, with consumer groups dubbing them a "rip off" and the regulator calling on banks to abandon the product.
Barclays yesterday announced that it was abandoning a legal challenge against compensating customers who were mis-sold the PPI products and was setting aside £1bn to pay claims.
A spokesperson for the bank last night insisted that the decision would have "no impact" on the Dublin hub, which manufactured the contentious PPI products.
The £1bn will not be charged back to the Dublin unit because the policies were underwritten here but sold from a different arm of Barclays, she said.
Barclays ceased writing new PPI business in mid 2009, but the 40-strong team in Dublin has been maintained to oversee the existing book of business and to work on new products, including an income protection offering.
The impact of the PPI demise was clear in the last set of accounts filed in Dublin, which showed a £240m collapse in the year to October 2009.
Barclays' decision to abandon the PPI battle came just days after fellow banking giant Lloyds said it was putting aside £3.2bn for PPI mis-selling claims.