Lloyds adds ‘final’ £1 billion to pot for customers missold PPI policies

Gift: Lloyds boss Antonio Horta-Osorio Picture:Daniel Hambury/Stella Pictures

Banking giant Lloyds today topped up its pot for compensation claims from customers who were missold PPI policies by a “final” £1 billion.

The latest huge provision brings the lender’s total kitty for PPI payments to £16 billion and comes after City watchdog the Financial Conduct Authority extended the deadline for claims from an initially proposed cut-off point of spring 2018 to June 2019.

But Lloyds bank bosses signalled that today’s move will seek to draw a line under the PPI saga by covering any further claims expected up until the deadline.

Chief financial officer George Culmer: “It would be the last big PPI provision that we would expect to take.”

The scandal has already cost Britain’s banking industry more than £24 billion — with the final bill likely to be as much as £37 billion. Lloyds has taken the biggest hit from PPI.

It dates back to the Nineties when customers were sold expensive and often inappropriate payment protection insurance policies with personal loans or mortgages to cover monthly payments if they fell ill or lost their jobs.

Experts have estimated that more than 50 million PPI policies were sold in total.

Tashema Jackson, money expert at comparison website uSwitch.com, said: “Given the regulator is consulting on a deadline for PPI, it is important that consumers get their complaints in sooner rather than later.

“If people think they’ve been mis-sold a PPI policy, they should complain to their bank. If they remain unhappy, they can escalate their complaint with the free Financial Ombudsman Service — and will be entitled to keep any compensation awarded themselves.”

The latest provision pushed down Lloyds’ pre-tax profits by 15 per cent to £811 million in the third quarter.

However, it could also pave the way for the sale of the Government’s remaining nine per cent holding in the bank, which hnd yields followinad to be bailed out by taxpayers at the height of the 2008 banking crisis. Britain’s largest retail bank also reported a £740 million deficit in its pension fund, largely as a result of falling bog the Brexit vote.

But chief executive Antonio Horta-Osorio, who was presenting his first set of financial results since apologising to staff in August over “adverse publicity” related to his private life, insisted that Brexit would not have a major impact on the bank’s underlying operations.

He said: “We think all retail activity, including credit cards, debit cards, mortgages, so consumer activity overall, is the same following Brexit, we do not see any significant change”.

While some businesses “have deferred elements in their investment plans and borrowing”, this trend had started before the referendum, he added.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in