We have updated our forecasts for the mainstream UK banks following the interim reporting season and recent announcements regarding additional PPI provisions caused by a spike in claims ahead of the deadline on 29th August. Overall, this sees us downgrade earnings estimates across the sector to reflect a more cautious revenue environment and the partial removal of share buy-backs from our forecasts. That said, our models are predicated on consensus economic forecasts which continue to assume a benign outlook despite ongoing political and economic uncertainty. On this basis, we see considerable upside to our fair value estimates, suggesting that the market is already pricing in a much worse scenario. Consequently, we reiterate our positive stance on the sector, albeit with the caveat that there remain a wide range of potential outcomes.