Lloyds Bank PPI mis-selling charges total £14 billion

The final total comes in as the bank reports underlying profit of just under £2 billion in the three months to the end of September

Clare Hutchison
Wednesday 28 October 2015 09:17
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Lloyds and eight other major banks, including RBS and Barclays, have already set aside £3bn to cover mis-selling to clients
Lloyds and eight other major banks, including RBS and Barclays, have already set aside £3bn to cover mis-selling to clients

Lloyds' final bill for the PPI mis-selling scandal has come in at £13.9 billion – more than twice the amount put aside by any other bank.

Lloyds published the final price after it put aside £500 million to cover costs in its third quarter.

Lloyds said it planned to make these payments regardless of a proposal by the Financial Conduct Authority to set a 2018 deadline for compensation claims relating to PPI.

The further charge comes as the bank reported an underlying profit of just under £2 billion in the three months to the end of September, down slightly from £2.2 billion last year and falling short of forecasts for £2.2 billion.

Statutory pretax profit, however, rose to £958 million from £751 million.

Chief executive Antonio Horta-Osorio said the lender had continued to benefit from the UK's economic recovery and welcomed clarity from regulators on new rules around ring-fencing and a report from the Competition and Markets Authority on currency accounts.

“We are well placed to respond to the evolving regulatory environment as well as the short-term challenges of low interest rates,” he said.

The Portuguese banker also highlighted the government's efforts to sell off the taxpayers' stake in the bank, which received a £20 billion bailout during the height of the financial crisis.

The Treasury has whittled down the stake from 25% to less than 11%.

Commenting on Chancellor George Osborne's plans to sell £2 billion in the bank's shares to the public next year, Horta-Osorio added: “We welcome the further progress that the government has made this year and will fully support the proposed retail offer.”

Additional reporting by Reuters

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