Rising PPI claims are bad news for shareholders | Analysis

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The number of claims of mis-sold payment protection insurance has doubled to 379,000 over the past year. Photograph: Chemistry/Getty Images

The PPI catastrophe rolls on. Every mobile phone in the UK has already been blasted with countless texts telling people to grab a share of the payouts (however spuriously), so you might imagine every possible claim has already been sent in.

But figures from the Financial Ombudsman show that claim numbers have doubled to 379,000 over the past year, and they are by no means all from the ambulance-chasing claims companies.

The banks have gone from denial (rejecting claims and rightly being fined by the FSA) to acceptance (setting up claims departments staffed by thousands, making £14bn in provisions, moaning about false claims) but are now moving back to fight mode.

Last year, the ombudsman upheld only 70% of PPI complaints, down sharply from 84% the year before. Indeed, uphold rates in favour of consumers are falling across the board at the ombudsman, dropping below 50% for the first time.

Which? magazine reckons it indicates the banks are still dragging their heels on complaints, and they have a point.

Others, irritated by junk texts from the claims companies, may even sympathise with the banks.

But it is unmitigated bad news for bank shareholders. Given the still-rising claims figures, the chances of a write-back of those gigantic provisions is unlikely – and £14bn may yet prove to be not nearly enough to cover the most monumental mis-selling in banking history.