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Barclays sets aside extra £700m for PPI

Barclays has set aside an extra £700m to meet compensation claims for mis-selling payment protection insurance.The news came as the bank said costs related to the sale of part of its Africa unit had pushed it into a £1.2bn loss in the first half of the year.The sale of the Africa business was part of Barclays’ plan to focus on the UK and US.Stripping out the losses from the Africa sale, Barclays posted a 13% rise in group pre-tax profits to £2.34bn.Barclays chief executive Jes Staley said: “Our business is now radically simplified, the restructuring is complete, our capital ratio is within our end-state target range, and, while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders: improving group returns.”The bank said it had now set aside a total of £2.1bn to deal with PPI complaints, but this was open to review. Analysis: Kevin Peachey, personal finance reporterThe PPI scandal is not only big – banks have set aside a total of nearly £40bn to pay compensation – it is also long-running.Over the next few months the pace of it is likely to keep accelerating. The City regulator, the Financial Conduct Authority, will run a campaign to encourage those mis-sold PPI to make claims before the deadline of August 2019.You can expect more activity too from the claims management companies touting for business through calls and texts. They take a cut of any payouts made to claimants who use their services.Banks wanted a earlier deadline. They want to draw a line under this saga. It is almost impossible to judge how much PPI was mis-sold – so they will also hope these latest provisions have over-estimated the final bill.Earlier this year, Barclays sold a near 34% stake in Barclays Africa Group, leaving it with just 15% of the business.The company said the sale of the stake had led to a loss of £1.4bn, and it had also taken a £1.1bn charge on the sale.In addition to Barclays’ exit from Africa, the bank said it had run-down assets in its non-core division to below £25bn, enabling it to close the unit six months early.Mr Staley said Barclays had completed “two critically important planks” of its strategy to get out of unwanted businesses.
Source: BBC News

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My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups. I am an author of various websites including Franchise UK https://www.franchise-uk.co.uk

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