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31 Aug 18

Lloyds again increase provisions for mis-sold PPI claims

Lloyds Banking Group announced in its Half-Year Results that it had set aside £460m (including Administration costs) for Payment Protection Insurance (PPI) claims.

This significant increase brought Lloyds’ PPI provision to £2.0bn (including Administration costs) and its total bill for PPI mis-selling is reported to stand at £19.2bn (including Administration costs).

Lloyds expect to receive 13,000 PPI complaints per week until the 29 August 2019 deadline, which has been set by the Financial Conduct Authority (FCA).

In the Half-Year Results it is reported that: “The charge in the second quarter is largely driven by a potentially higher total volume of complaints and associated administration costs due to higher reactive complaint volumes received over the past six months and ongoing volatility.”

“The cost could differ from the Group’s estimates and the assumptions underpinning them, and could result in a further provision being required,” the Bank added.

The FCA announced that a total of £383m was paid in June 2018 to customers who complained about the way they were sold PPI. This brings the total paid out so far to £31.9bn. Year-on-year, for the first half of 2018, £2.35bn was paid out to customers compared to £1.44bn in the same period of 2017. So, there are no signs of a slowdown as the countdown to the PPI deadline continues.

FCA

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Sources:
Lloyds Bank sets aside another £460m for PPI claims – 01.08.18
https://www.bbc.co.uk/news/business-45028812

FCA Monthly PPI Payout stats – 08.08.18
https://www.fca.org.uk/news/ppi-monthly-refunds-compensation

Lloyds half year results 2018 – 01.08.18
https://www.lloydsbankinggroup.com/investors/financial-performance/
https://www.lloydsbankinggroup.com/globalassets/documents/investors/2018/2018_lb_hy_results.pdf