More mis-selling payments on the way

Lloyds Bank PPI charge likely to stretch beyond £12 billion

Lloyds BankLloyds Bank is expected to set aside at least £500 million in mis-sold payment protection insurance, taking the total bill  to more than £12 billion.

In what is already Britain’s biggest consumer mis-selling scandal, a number of banks will have to account for more charges, according to analysts.

Lloyds took a £900 million PPI charge at its third-quarter results in October and warned then that its bill would rise by another £600m if complaints continued at the same rate.

PPI policies were meant to cover repayments if customers fell ill or lost their jobs, but were often sold to people who did not need them or would be ineligible to claim.  Since then, complaints about PPI across the industry have shown no sign of abating.

One analyst reckons Lloyds will take a further £500m hit in the fourth quarter and other banks are likely to increase their provisions when they report full-year results, adding to a total bill for the industry of about £24 billion.

Lloyds reports full year results on 27 February.

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