Lloyds hit by further ¤£ ¥ charge for insurance mis-selling
Lloyds Banking Group has taken another £500 million ($765 million) ¤¥ charge to compensate customers mis-sold loan insurance, taking its total bill to 13.9 billion pounds, more than double any other bank.
Europe’s second-biggest bank by market value on Wednesday reported an underlying profit of 2 billion pounds in the third-quarter, down from 2.2 billion pounds a year ago and slightly below market expectations. Analysts had forecast an underlying pretax profit of 2.2 billion.
The bank reported third quarter statutory pretax profit, including one-off items, of 958 million pounds, up from 751 million.
Britain’s financial regulator said in October that it intended to set a 2018 deadline for people to claim compensation for mis-sold loan insurance or payment protection insurance, a decision that was seen as positive for Lloyds.
Over the last five years banks have already set aside more than 28 billion pounds ($42 billion) to meet compensation claims from borrowers sold payment protection insurance (PPI).
The policies, designed to protect borrowers in the event of sickness or unemployment, were found to have often been sold to people who would have been ineligible to claim.
Lloyds was rescued by a 20.5 billion pound taxpayer-funded rescue during the 2007-09 financial crisis, leaving the government holding a 43 percent stake. It has since reduced its holding to under 11 percent, raising over 15 billion pounds.