31st July 2015
Lloyds banks has set aside another £1.4 billion for payment protection insurance (PPI) compensation, taking the total amount of redress to £13 billion.
In its latest half year results the bank reported a 38% rise in pre-tax profits for the first six months of the year but that is has also had to top up its PPI compensation pot.
It has now set aside over £13 billion in compensation and last month was fined a record £117 million by the Financial Conduct Authority for its part in the mis-selling of the insurance.
Lloyds said the need for additional PPI provision was ‘disappointing’ and that it reflected ‘higher than expected reactive complaints with higher associated redress’.
The bank has had to revisit many of its PPI complaints after the regulator found it had not dealt with them properly. Lloyds had already identified 1.2 million PPI complaints that it had to review again at the end of last year and that figure has increased to 1.4 million.
Lloyds chief executive Antonio Horta-Osorio said the bank had made ‘strong progress’ in the first half of the year.
‘We remain focused on our aim to become the best bank for customer sand shareholders, while at the same time supporting the UK economy,’ he said.
The government has reduced its stake in the bank from 43% at the height of the financial crisis to 15% with share sales to institutional investors.
A sale to the public is expected next year that will reduce the government’s stake to as little as 5%.