By Marietta Cauchi

LONDON--Barclays PLC's (BCS) disclosure Friday of a 450 million pound ($704.8 million) provision to redress customers that had been missold interest-rate hedging products comes as the other three major U.K. banks report earnings that will likely reveal further disclosures on the issue.

Barclays, together with HSBC Holdings PLC (HBC), Royal Bank of Scotland Group PLC (RBS) and Lloyds Banking Group PLC (LYG), last month agreed with the Financial Services Authority to settle claims in connection with "serious failings" in the sale of the derivatives.

Lloyds said at the time that the financial impact of redressing its customers and associated costs wouldn't have a material financial impact on their business. Reporting first-half results Thursday, Lloyds repeated that the costs were expected to be immaterial without giving details.

HSBC and RBS, neither of which has given any indication of cost, report Monday and Aug. 3, respectively. A representative for HSBC declined to comment Friday but said there might be an update Monday. A representative for RBS wasn't immediately available for comment Friday.

The FSA's probe of the U.K. banks found that a total 28,000 interest-hedging products had been missold by the four banks. These products ranged in complexity from comparatively simple "caps" that fixed an upper limit to the interest rate on a loan, through to the more complex derivatives such as "structured collars" which fixed interest rates within a band but introduced a degree of interest rate speculation.

The FSA didn't specify at the time what proportion of the products comprised the more complex derivatives nor how many products each of the banks sold. An FSA spokesman Friday declined to give further details or to comment on the amount it would cost the remaining three banks to redress customers.

"It is up to the individual banks themselves to provide redress and assess costs," he said.

Earlier this week, the FSA said seven more banks had agreed to examine whether they sold small businesses inappropriate financial products better suited to speculating in interest rate movements.

The banks involved include Allied Irish Banks PLC (ALBK.DB), Bank of Ireland (BIR.DB) and the U.K. arm of Spain's Banco Santander S.A. (SAN.MC) will review the sale of interest rate swaps and other derivatives to business customers, as will Clydesdale Bank and Yorkshire Bank, both units of National Australia Bank Ltd. (NAB.AU), the Co-operative Bank and Northern Bank, a unit of Danske Bank A/S (DANSKE.KO).

These banks won't be probed by the FSA but will hire an independent reviewer to report on sales.

"The big four U.K. banks made up the bulk of the market--the other seven banks only sold an additional 3,000 or so products," the FSA spokesman said.

-Write to Marietta Cauchi at marietta.cauchi@dowjones.com

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