The average cost of claims over the past quarter has not declined as expected

RBS has set aside £465m to cover the cost of mis-selling payment protection insurance.

The bank said that the average cost of claims it dealt with in Q4 2013 has continued at previous rates of £225m per quarter rather than declining as expected. The claims are now expected to continue for a longer period.

This move follows a decision by the board late yesterday to set aside more than £3bn to cover various claims and conduct-related matters.

The expected payouts include £1.9bn for mortgage-backed financial products in America and £500m for the mis-selling of interest rate swaps.

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