Bradford and Bingley Hit By Claims
Bradford & Bingley PLC today announced a larger than expected hit from endowment compensation claims by annoyed endowment customers.
Bradford & Bingley said that it was setting aside a further £89.4M, to cover the higher-than-expected number of complaints from customers who claim they were mis-sold endowment policies.
The total provisions now stand at £165.2M.
Bradford & Bingley CEO Steven Crawshaw said that he could not rule out further provisions in future.
"It'd be a very brave person who would say that this is the last, but there are signs of light at the end of the tunnel."
Analysts at Keefe, Bruyette & Woods wrote in a note:
"The compensation claims for mis-selling are massive in relation to expectations and historical experience. While this should be a one-off, it is a negative for sentiment."
Bradford & Bingley also said underlying pretax profit, which excludes the endowment provision, came in at £164.2M in the six months to June 30, up 9% from £150M in the same period last year. Analysts had been expecting profit of £162.4M.
In my view a lot of heartache for those who bought these useless policies, and those who "manage" them, could have been saved if the life assurance companies simply underwrote them.