Lloyds takes £1.6bn hit over PPI and mortgage failings

Lloyds Bank Slash 3,000 Jobs After Brexit Economy Warning

Lloyds Bank Slash 3,000 Jobs After Brexit Economy Warning

The group said it will help cover a jump in PPI claims from around 7,700 a week to 9,000 through to the claim deadline set for the end of August 2019, but brings its total bill for PPI misselling to more than £18bn. Lloyds will also advise customers to consider whether they suffered any consequential losses as a result of this issue, such as a direct debit fee charged because of a broken payment plan.

The Lloyds Group states that it has ever gained a half-year profit of £2.5bn an unexpected amount for the last 8 years and succeeded in raising its dividend.

'Ensuring fair treatment of customers, especially those in financial difficulties or who are vulnerable, is a key priority for the FCA, ' said Jonathan Davidson, executive director of supervision, retail and authorisation, at the FCA.

Lloyds Banking Group is finally back in private ownership after the government's remaining two per cent stake in the bank was sold in its "drip feed" share sale.

This was another blow to Lloyds whose earnings for years have been drained by costs related to conduct issues, and takes the bank's total cost to cover the mis-selling of payment protection insurance to about 18 billion pounds.

The bank has estimated that around 590,000 customers will receive around £283 million in redress.

In its H1 results, Lloyds has reported an 8% rise in underlying profits in the first half of 2017 to £4,492 million.

The latest provision takes Lloyds' total cost for PPI to more than £18bn, more than any other United Kingdom bank.

"Growing revenues at the bank were driven by a good showing from its commercial banking division, and with costs heading downwards, that spells good news for profits, dividends and shareholders", he said.

Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown, said: "It's a sign of Lloyds' strength that it can shrug off £1.6bn of misconduct charges to post a strong rise in profits".

It also said that it had set aside an additional £283m to compensate hundreds of thousands of customers who it mistreated while they were in mortgage arrears.

Although the Bank of England has grown increasingly concerned about mushrooming levels of consumer credit, Horta-Osório hailed the acquisition of credit card business MBNA as allowing the Consumer Finance part of the business to "significantly increase our participation in the United Kingdom prime credit card market within our prudent risk appetite", also growing motor finance and credit card portfolios organically during the period.

Chief Executive Antonio Horta-Osorio continued to play-down fears of an unsecured debt bubble in the United Kingdom saying debt levels remained "reasonable" and were lower than a decade ago.

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