Swindon-based building society Nationwide today revealed it has set aside a further £45m to compensate victims of payment protection insurance (PPI) mis-selling, helping force down first-half underlying profit from £181m to £151m.
Nationwide also blamed higher impairment charges in its commercial lending division for the profits decline.
Chief executive Graham Beale said: “Losses on our commercial property loans have increased over the past 12 months and, in addition, we continue to see elevated levels of PPI claims.”
PPI policies were typically taken out alongside a personal loan or mortgage to cover repayments if customers fell ill or lost their job. But they were often sold to people who would not have been eligible to claim on the policies.
Britain’s financial services sector could face a total bill of about £15bn to cover compensation pay-outs.
