Lloyds boss hits out at fraudsters as claims for PPI climb

Horta-Osorio says many claimants did not have insurance as bank's total provision tops £3.5bn

Lloyds Banking Group said yesterday that one in four of the payment protection insurance (PPI) claims made against it were fraudulent.

A quarter of the claims "are on behalf of customers who do not even have a PPI policy with us", its chief executive Antonio Horta-Osorio said as he revealed that the bank had set aside a further £375m to deal with the mis-selling scandal. That takes the total for Lloyds above £3.5bn.

A decision on whether to claw back further bonuses from former directors, including the former chief executive Eric Daniels, will be taken at the end of this year. In a swipe at the previous regime, Mr Horta-Osorio said: "This is, in relative terms, a small adjustment to our provisions.

"But our share of provisions for PPI is bigger than our share of the retail market. What happened was unacceptable. Lloyds and HBOS sold this product for too long and with too much intensity. That is why I stopped it as soon as I became chief executive."

Mr Horta-Osorio said that, along with other banks, Lloyds had seen a sharp rise in PPI claims in February and March as claims companies ramped up their advertising campaigns, but something of a tail-off in April as the Ministry of Justice, consumer groups and the banks started to warn people against using the claim firms.

He added: "Customers did not realise that they could end up paying up to a third of their compensation to these companies when we have made it easy for them to go on our website themselves to make a claim."

The extra PPI provision meant Lloyds' first-quarter pre-tax profit slipped to £288m from £316m in the same period last year. But Mr Horta-Osorio said the quarter had seen significant progress in strengthening the balance sheet, reshaping the business and reducing risk.

He said he still expected to sell 632 branches under Project Verde before the EU-imposed deadline of November 2013.

"We still have three options," he said. "Co-op remains the preferred bidder; we continue planning for an initial public offering and NBNK [Lord Levene's vehicle] is answering the questions we have asked it. We need to be reassured it can clear regulatory hurdles, provides value for shareholders and is superior to an IPO."

Lloyds shares rose 2.6p to 33.6p yesterday, meaning they about half the average 63.1p paid by the taxpayer in the £17bn bailout.

Richard Hunter, the head of equities at Hargreaves Lansdown, said: "The likelihood of reaching the break-even point seems a long way off, even if Lloyds is making slow and steady progress, whilst the absence of a dividend isanother drag on enticing potential buyers."

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam