Lloyds Banking Group suffers loss from PPI costs

4th August 2011

The bank announced in May that it was putting aside £3.2bn to pay customers who had been mis-sold.

Excluding one-off expenses, the High Street bank reported a decline in pre-tax profit to £1bn from £1.6bn in 2010, says the report

Lloyds, which is 41%-owned by the taxpayer, recently announced a cost cutting programme including 15,000 job losses.

The bank is currently looking to sell of 632 branches as part of an agreement with EU regulators following its government bailout and the takeover of HBOS (Halifax Bank of Scotland).

On Thursday it had "credible" bidders for the branches it has up for sale, adds the Guardian.

As the loss of £3.3bn was announced, chief executive Antonio Horta-Osorio, who took the helm on 1 March, said Lloyds remained in talks with the independent commission on banking (ICB) to try to avoid being forced to sell even more branches when the final report by the commission is published on September 12.

"We have had a good and engaging process with [the ICB]," Horta-Osorio, whose bank is 41% owned by the taxpayer, is quoted as saying in the Guardian. "It is a useful and productive dialogue".

Horta-Osorio, who has code-named the disposal programme Verde, insisted the 632 branch sales would be enough to bolster competition as the operation is same size of the Halifax business it bought during the crisis.

"The Verde business will have strong brands, a branch network of a similar size to that of the Halifax and a full product range including savings, loans, credit cards and mortgages as well as current accounts. We believe that Verde will be a strong competitor in UK retail banking," he said.

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