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01/11/2012
Lloyds Allocates Further £1bn For PPI
Lloyds Banking Group says it has put a further £1bn aside to cover its PPI bill.
The total amount allocated by Lloyds to compensate customers who were mis-sold payment protection insurance is now as much as £5.275bn.
The action taken by Lloyds is part of an industry wide programme to investigate the potential mis-selling of the insurance to customers.
PPI was sold over the last years as a means to ensure mortgage and credit card borrowers could afford to repay their loans if they fell ill or lost their jobs.
But it became apparent over the past year that many customers either did not need it in the first place or were automatically excluded from making a valid claim, typically because they were self-employed.
Finanical authorities then ordered banks to revisit previous sales and alert customers to the fact that they can make a claim for compensation.
This process means large payouts for the UK’s banks.
Lloyds TSB branch Lloyds described the PPI bill as a "legacy issue".
Lloyds is now experiencing a loss of £144m for the third quarter of the year as a result of the extra PPI compensation.
Even though the bank is suffering a loss, its shares rose 7% this morning.
Lloyds chief executive said: "The volume of complaints received in relation to legacy PPI business during the third quarter declined when compared to the previous quarter.
"However, it remained above the level which we anticipated at the time of our half-year results and as a result the group believes it is appropriate to increase its provision for expected PPI costs by £1bn.
"This increases the expected cost of contact and redress, including administration expenses, to £5.3bn," he explained.
It is expected the bank’s final bill for PPI could rise even further.
(IT)
The total amount allocated by Lloyds to compensate customers who were mis-sold payment protection insurance is now as much as £5.275bn.
The action taken by Lloyds is part of an industry wide programme to investigate the potential mis-selling of the insurance to customers.
PPI was sold over the last years as a means to ensure mortgage and credit card borrowers could afford to repay their loans if they fell ill or lost their jobs.
But it became apparent over the past year that many customers either did not need it in the first place or were automatically excluded from making a valid claim, typically because they were self-employed.
Finanical authorities then ordered banks to revisit previous sales and alert customers to the fact that they can make a claim for compensation.
This process means large payouts for the UK’s banks.
Lloyds TSB branch Lloyds described the PPI bill as a "legacy issue".
Lloyds is now experiencing a loss of £144m for the third quarter of the year as a result of the extra PPI compensation.
Even though the bank is suffering a loss, its shares rose 7% this morning.
Lloyds chief executive said: "The volume of complaints received in relation to legacy PPI business during the third quarter declined when compared to the previous quarter.
"However, it remained above the level which we anticipated at the time of our half-year results and as a result the group believes it is appropriate to increase its provision for expected PPI costs by £1bn.
"This increases the expected cost of contact and redress, including administration expenses, to £5.3bn," he explained.
It is expected the bank’s final bill for PPI could rise even further.
(IT)
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FSA Fine Lloyds £4.3m For PPI Compensation Delays
Delays in paying compensation to customers mis-sold Payment Protection Insurance (PPI) have resulted in £4.3m fine for Lloyds Banking Group. While hundreds of thousands of people have received redress for mis-sold PPI, the Financial Services Authority (FSA) said that 140,000 customers did not receive their payments promptly.
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Lloyds Makes £3.9bn Loss After PPI
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Lloyds Makes £3.9bn Loss After PPI
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TSB Flotation Announced By Lloyds Bank
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TSB Flotation Announced By Lloyds Bank
Lloyds Banking Group has said it is to float a 25% stake in its TSB business on the London stock market. The sale will take place next month and ordinary investors will have an opportunity to purchase shares. These ordinary investors will be rewarded with free shared for longer-term investments, it is understood.
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