More Banks Announce Losses Due To Incompetence
Earlier today, Deutsche Bank reported a loss for the fourth quarter, where revenues totaled €6.8 billion, down 15% from the same period in the previous year. The substantial loss in the bank's profits were heavily caused by a large round of charges needed to cover restructuring and litigation costs. The bank also announced that it was likely to incur charges of around €2.1 billion in the fourth quarter. Total litigation costs for the bank in 2015 now stand at €5.2 billion, compared to €2 billion in 2014, which clearly shows that the bank is becoming increasingly more incompetent when it comes to looking after its customers.
The PPI scandal is also continuing to haunt the largest European banks, as Santander put aside another £450 million to pay compensation to customers which were miss-sold. The UK arm of Santander reported a fall in profits in 2015, from £1.4 billion to £1.3 billion, as a result of the PPI charge.
On top of these two banks, RBS has also set aside £2 billion to cover mortgage-backed securities litigation as well as compensation for credit insurance miss-selling. In reaction to this news, RBS shares fell 0.96%, to 258.40 pence.
What is becoming ever more evident, is that banks are continuing to fork out ever increasing sums to cover their poor quality services and the mistreatment of their customers. With announcements like today’s becoming more and more frequent, it is surely only a matter of time before customers begin to move away from the banks and start to use alternative payment and treasury services.