Yorkshire to pay back customers

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Clydesdale ​and Yorkshire Banks are to set aside up to £500m to compensate customers who were mis-sold insurance and protection products.

The banks, which are to be spun off by their owner National Australia Bank (NAB), said they are setting aside £290m ​to​ £420m to ​compensate customers who took out payment protection insurance​ (PPI).​

In addition, ​they will take a provision of between £60m and £80m​​ to cover compensation for business customers that were sold interest rate swaps​.​

​NAB said the cash will come out of the ​£1.7bn it has set already aside to cover future provisions.

​In April Yorkshire Bank said tens of thousands of customers could be in line for compensation of around £3,000 each following a record £21m fine from the financial watchdog.

The Financial Conduct Authority said Yorkshire Bank and sister bank Clydesdale were guilty of “serious failings” in Payment Protection Insurance (PPI) complaint handling.

Any customers who think they might have been mis-sold insurance on mortgages or loans but have not yet applied should contact their bank.

Yorkshire and Clydesdale have already set aside £806m to reimburse customers in what has become one of the worst banking scandals in history, with the industry paying out £18.5bn so far to pay back customers. Yorkshire Bank said it was “very sorry” for the mistakes that have been made and said it is very keen to put them right.

David Duffy, ​the new chief ​executive of Clydesdale and Yorkshire Banks, added​ “In the third quarter, we have had solid earnings and strong growth in mortgage lending and customer deposit. I am pleased with our progress in all areas and Clydesdale Bank is positioned well to deliver on our growth ambitions.”