Barclays,HSBC hit by 2 billion mis-selling cost

British banks gave up a fight over compensating customers wrongly sold insurance,forcing Barclays Plc and HSBC to take a combined hit of more than 2 billion in the latest blow to the industry. Barclays said it would make a 1 billion pound provision in the second quarter of 2011 to cover the costs related to the mis-selling of payment protection insurance,with HSBC setting aside 440 million.

British banks,already under pressure from regulators to clean up their act following the financial crisis,said they would not appeal against a ruling requiring them to pay compensation.

Mondays hit comes after rival Lloyds capitulated last week and unveiled a shock 3.2 billion pound charge to cover compensation,after years legal of wrangling.