Business

Lloyds' PPI bill hits £13.9 billion after another £500 million provision

Costly: Lloyds' PPI bill is more than twice that of any other bank
Stefan Rousseau/PA
Clare Hutchison
28 October 2015

Lloyds' bill for the PPI mis-selling scandal has reached £13.9 billion, after the bank put aside another £500 million to cover costs in its third quarter.

The sum means that Lloyds has set aside more than twice the amount than any other bank.

Lloyds said it had noted the Financial Conduct Authority's proposals to set a 2018 deadline for compensation claims relating to PPI, but the suggestion had not affected the provisions it had made.

The further charge comes as the bank reported an underlying profit of just under £2 billion in the three months to the end of September, down slightly from £2.2 billion last year and falling short of forecasts for £2.2 billion.

Statutory pretax profit, however, rose to £958 million from £751 million.

Chief executive Antonio Horta-Osorio said the lender had continued to benefit from the UK's economic recovery and welcomed clarity from regulators on new rules around ring-fencing and a report from the Competition and Markets Authority on currency accounts.

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"We are well placed to respond to the evolving regulatory environment as well as the short-term challenges of low interest rates," he said.

The Portuguese banker also highlighted the government's efforts to sell off the taxpayers' stake in the bank, which received a £20 billion bailout during the height of the financial crisis.

The Treasury has whittled down the stake from 25% to less than 11%.

Commenting on Chancellor George Osborne's plans to sell £2 billion worth of the bank's shares to the public next year, Horta-Osorio added: "We welcome the further progress that the government has made this year and will fully support the proposed retail offer."

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