PPI continues to haunt Lloyds
Friday 27th July 2012
Taxpayer-backed Lloyds Banking Group has revealed losses for the first half of this year after a surge in PPI mis-selling complaints.
It took an additional £700m hit for mis-selling PPI, while also warning that banking’s latest scandal of Libor-rigging may also affect it.
The 41% state-owned bank has now set aside more than £4.2bn PPI compensation and has said that the final provision for PPI mis-selling may yet again change, admitting there were still ‘a number of uncertainties as to the eventual costs’ of compensating customers.
Lloyds made pre-tax losses of £439m for the six months to June 30, compared with a £3.3bn loss in the same period last year
The Libor affair may yet prove costly. Lloyds said that some of its staff had received subpoenas and requests for information from government agencies and were co-operating with their investigations.
There are also employees who have been named as defendants in private lawsuits, including class-action cases in the US over the manipulation of Libor.
Lloyds said in its half-year statement: “It is currently not possible to predict the scope and ultimate outcome of the various regulatory investigations or private lawsuits, including the timing and scale of the potential impact of any investigations and private lawsuits on the group.”
Antonio Horta-Osorio, the group’s chief executive officer, insisted the group is on still track to meet financial targets.
“We are making significant progress with our financial targets,” he said.
"Mis-sold PPI policies are an industry legacy issue, but by redressing those affected quickly we continue to do the right thing for our customers.”
Lloyds also said that over 25,000 first-time buyers have taken out mortgages with it so far this year, including those using NewBuy. This week, the Council of Mortgage Lenders said Lloyds continued to be the UK’s largest mortgage lender, with Santander in second place.
According to the CML, last year Lloyds had 19.9% market share in gross mortgage lending, compared with Sandander at 16.8%, Barclays and Nationwide both 12.1%, RBS 10.4% and HSBC 9.4%.
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