Schwarzenegger-fronted campaign hits ex AIB chief's bank
Shares in David Duffy's UK bank CYBG fell 6pc on Wednesday, after the lender said it had increased provisions for repaying customers missold payment protection insurance (PPI) by £350m. The move is a blow to the former AIB boss's effort to build CYBG in a challenger to the main UK lender.
CYBG said a regulatory campaign and media coverage had boosted the profile of Britain's costliest ever consumer scandal, in which people were sold often worthless insurance meant to help them repay debts in the event of sickness or unemployment.
Banks in Britain have so far set aside more than £44bn to cover such claims, and it is likely more of them will have to disclose increased provisions as they prepare to report first quarter earnings in the next two weeks.
Britain's Financial Conduct Authority (FCA) has said consumers have until August 29, 2019 to make a claim if they bought one of the policies, most of which were sold between 1990 and 2010.
Lenders have experienced an increase in claims after the FCA launched an awareness campaign fronted by an animatronic likeness of the head of US politician and actor Arnold Schwarzenegger mounted on tank tracks.
CYBG said the campaign had led to a surge in claims, which it expects to remain at an elevated level before dropping as the August 2019 deadline approaches, a forecast which analysts said could be too optimistic.
"Aggressive FCA ad campaigning and scaremongering on the part of claims management companies could mean claim volumes remain high," analyst John Cronin at Irish broker Goodbody said on Wednesday. (Additional reporting Reuters)