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LONDON, Sept 4 (Reuters) - Britain's banks have paid out500,000 pounds ($780,000) to compensate companies for mis-soldinterest rate swaps and the figure is set to rise rapidly incoming months, the Financial Conduct Authority (FCA) said onWednesday.
The bill is the latest faced by banks, which are alsocompensating customers for mis-sold payment protection insurance(PPI). Two British banks have also been fined for manipulatingthe London Interbank Offered Rate, or Libor market benchmark.
Interest rate swaps were designed to protect smallercompanies against rising interest rates but when rates fell,they had to pay large bills, typically running to tens ofthousands of pounds.
The FCA said in its first update on how banks are respondingto claims that by the end of August 10 offers of redress hadbeen accepted by businesses totalling half a million pounds.
This figure is expected to increase rapidly over the comingmonths with 210 offers already sent out to customers and with afurther 1,700 due to be sent shortly, the FCA said.
Barclays has reached the redress offer andacceptance stage for 92 sales, with 68 at HSBC, 13 atLloyds and 20 at RBS.
The banks have taken on 2,800 staff to review more than30,000 cases and the FCA expects most customers will be told bythe end of the year about the result of their review. More than25,000 sales or 85 percent of the total are being assessed.
"With 85 per cent of cases now under review, banks have madeprogress. But like the thousands of affected small businesses,we want to see redress paid quickly to those who have sufferedloss as the result of mis-selling," FCA Chief Executive MartinWheatley said.
Due to their complicated nature, redress offers to customersmaking a claim for certain consequential losses may take longer,the FCA added.
Money set aside by banks to compensate for mis-selling PPIhas reached around 15 billion pounds so far, forcing lenders tobeef up their capital positions.
