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RBS add £500million to Swap Mis-selling Compensation Fund

At the end of January, RBS announced that it was set to make a £8billion loss for the 2013 financial year. One of the main contributing factors to this loss was a £3.1billion provision for litigation and mis-selling costs.  
Included in the total provision is a further £500million for claims relating to mis-selling of interest rate swaps to SMEs. This has been the subject of considerable coverage in the press over the last few years. It appears from figures released by the Financial Conduct Authority that RBS are making significant progress in dealing with the redress scheme set up under the supervision of the FCA in mid 2012. 
The redress scheme has already resulted in a number of SMEs recouping amounts that were paid under interest rate swap agreements. Question marks remain over the extent to which these SMEs will be properly compensated in relation to “consequential losses”. These comprise those additional losses that businesses have suffered as a result of the pressure from having to make substantial payments under interest rate swap agreements.  
RBS have also made a provision of £200million for legal and other expenses for dealing with ongoing claims, including litigation primarily related to mortgage-backed securities in the US.  
Balfour+Manson are advising a number of small businesses in relation to claims against the major banks under the FCA redress scheme. If you require any further information on this, please contact Gordon Deane on 0131 200 1485 or by email to gordon.deane@balfour-manson.co.uk”