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Provisions for liabilities and charges (Tables)
 12 Months Ended
Dec. 31, 2017
Provision for liabilities and charges  
Schedule for provisions for liabilities and charges

 

 

 

 

Payment

 

Other

 

Residential

 

Litigation

 

 

 

 

 

 

 

protection

 

customer

 

mortgage backed

 

and other

 

Property and

 

 

 

Provisions for liabilities and charges

 

insurance (1)

 

redress

 

securities (2)

 

regulatory (3)

 

other (4) (5)

 

Total

 

 

£m

 

£m

 

£m

 

£m

 

£m

 

£m

 

At 1 January 2017

 
1,253

 
1,105

 
6,752

 
1,918

 
1,808

 
12,836

 

Currency translation and other movements

 

—

 
4

 
(541)

 
(31)

 
35

 
(533)

 

Charge to income statement

 
175

 
228

 
714

 
280

 
1,003

 
2,400

 

Releases to income statement

 

—

 
(54)

 
(50)

 
(156)

 
(209)

 
(469)

 

Provisions utilised

 
(375)

 
(413)

 
(3,632)

 
(1,370)

 
(687)

 
(6,477)

 

At 31 December 2017

 
1,053

 
870

 
3,243

 
641

 
1,950

 
7,757

 

 

Notes:

(1)

To reflect the increased volume of complaints following the FCA’s introduction of an August 2019 PPI timebar as outlined in FCA announcement CP17/3 and the introduction of new Plevin (unfair commission) complaint handling rules, RBS increased its provision for PPI by £175m in 2017 (2016 - £601 million, 2015 - £600 million, 2014 - £650 million) bringing the cumulative charge to £5.1 billion, of which £3.7 billion (74%) in redress and £0.4 billion in administrative expenses had been paid by 31 December 2017. Of the £5.1 billion cumulative charge, £4.6 billion relates to redress and £0.5 billion to administrative expenses.
Schedule of the sensitivity of the provision

 

 

 

 

 

Sensitivity

Assumptions

Actual to
date

Future
expected

Change in
assumption
%

Consequential change in
provision
£m

Customer initiated complaints (1)

2,386k

429k

+/- 5

+/- 30

Uphold rate (2)
90%
94%

+/- 1

+/- 6

Average redress (3)

£1,681

£1,476

+/- 5

+/- 30

Processing costs per claim (4)

£160

£142

+/- £20

+/- 3

 

Notes:

(1)

Claims received directly by RBS to date, including those received via CMCs and Plevin (commission) only. Excluding those for proactive mailings and where no PPI policy exists.

(2)

Average uphold rate per customer initiated claims received directly by RBS to end of timebar for both PPI (mis-sale) and Plevin (commission), excluding those for which no PPI policy exists.

(3)

Average redress for PPI (mis-sale) and Plevin (commission) pay-outs.

(4)

Processing costs per claim on a valid complaints basis, includes direct staff costs and associated overhead - excluding FOS fees.