PPI mis-selling bill grows as Lloyds puts aside another £1bn

Lloyds Banking Group set aside another £1bn yesterday to cover yet more payment protection insurance (PPI) mis-selling, taking its total bill to £5.3bn and that for the banking industry as a whole to more than £11bn.

Its chief executive Antonio Horta-Osorio warned that the figure could rise further but said he had no regrets over his decision shortly after he joined Lloyds to break ranks with the other banks and start paying out compensation.

He said: "That decision has meant a huge cost to Lloyds and the rest of the banking industry but I do not regret it. Banks lost sight of their core values, had become complacent, non-customer focused and inefficient.

"If we had not taken that decision we would have been rebuilding the bank on false foundations.

"We could not transform this business without addressing the PPI legacy," he added.

Lloyds said the rate of PPI payouts had fallen from £300m a month in the first half to £250m a month in the third quarter. By the time it published its full-year results in March it hoped to have "a higher degree of confidence in forecast trends and the ultimate likely cost".

After the extra £1bn PPI charge, Lloyds, which is 40 per cent owned by the British taxpayer, made a loss of £144m during the three months to the end of September, against a loss of £185m in the same period a year earlier.

Lloyds shares rose 33.5p to 1,936.5p, still well below the average price of 63.1p paid by the taxpayer.