The banking industry has abandoned a legal fight over the mis-selling of payment protection insurance (PPI).
The British Bankers' Association, which fought the case, said it
would not appeal after losing a court challenge against new rules on mis-selling.
Barclays said it had set aside £1bn to pay compensation, and HSBC £269m, while RBS added £850m to the £200m it had already paid or provided for.
Last week, Lloyds Banking Group made a £3.2bn provision for possible claims.
Peter Vicary-Smith of the consumers' association Which? said the banks had now seen sense.
"It was a colossal error of judgment by the BBA to have brought this case in the first place, which has even further diminished the banking industry's reputation in the eyes of consumers," he said.
"PPI was mis-sold and complaints about it mishandled on an
industrial scale for well over a decade"
