Monday, 25 October 2021

Lloyds warns mis-selling could cost it an extra 1.8 billion pounds

LONDON: Lloyds Banking Group will set aside up to an extra 1.8 billion pounds ($2.2 billion) to settle mis-selling claims in Britain’s costliest consumer banking scandal, and said it was suspending its 2019 share buyback programme.

Banks are putting aside more money to pay claims against mis-sold payment protection insurance (PPI) following a rush of consumer enquiries about compensation ahead of the deadline on Aug. 29.

PPI policies were sold alongside a personal loan or mortgage to cover repayments if borrowers fell ill or lost jobs, but many were unsuitable.

The PPI saga has already cost lenders more than 36 billion pounds in payouts, with analysts estimating the final bill could top 50 billion pounds.

RBS said last week it faced additional costs of up to 900 million pounds, while Clydesdale Bank made a fresh 300-450 million pound provision.

As Britain’s biggest domestic lender, Lloyds has been the most exposed to PPI and has already paid out more than 20 billion pounds.

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