Genworth Expects to Collect $750 Million on UK PPI Court Ruling
The policies were sold by GE Capital Bank, which the Spanish lender acquired in 2009. They were underwritten by two units of Genworth that were sold to Axa SA in 2015. On Friday, a UK court said Santander was liable for Axa's losses linked to those policies and awarded it about £680 million , the firms said in statements Friday.
As part of a prior agreement with Axa, Genworth said in a statement it expects to receive about $750 million of that amount. AXA said in a separate statement it will be entitled to approximately £120 million. Genworth shares rose as much as 8.7% in New York on Friday.
'We do not expect the net impact of the judgment to be material for Santander given provisions already made and the potential legal actions available,' Santander said in a statement, noting that it would appeal the ruling.
The mis-selling of payment protection insurance policies represents the costliest scandal in British banking history. The policies, which covered some or all of a borrower's loan repayments in the event of an accident, sickness, involuntary unemployment or loss of life, were sold with aggressive tactics, sometimes without providing full explanations of their terms.
The cost of the policies could range from 13% to more than 50% of the total loan amount. The practice eventually caught the attention of the regulators in the mid-2000s and saw British banks pay out tens of billions of pounds in refunds over the following years.
With assistance from Jorge Zuloaga.
This article was generated from an automated news agency feed without modifications to text.
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