Lloyds hit by further £460m PPI payout

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Lloyds hit by further £460m PPI payout 457993058 1 2048x1536 3406902

Lloyds Banking Group had to pay out a further £460m in PPI compensation between April and June, its latest results have revealed. 

The bank put aside a total of £550m in the six-month period to June 30, to provide compensation Lloyds customers who were mis-sold payment protection insurance (PPI).

Lloyds Bank said the additional half-billion pound provision in the second quarter will cover claims currently at a rate of approximately 13,000 per week, until the compensation deadline in August 2019.

The latest compensation round takes the total amount paid by the banking group to clear up the PPI scandal to £19.2bn.

The banking group said: “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.”

“Since the commencement of the PPI redress programme in 2011 the Group estimates that it has contacted, settled or provided for approximately 53 per cent of the policies sold since 2000.”

The group said that it has sold approximately 16 million PPI policies since 2000, which includes both legitimate and mis-sold policies.

Lloyds would not rule out the possibility of having to increase the PPI compensation pot further, saying that “a number of risks and uncertainties remain including with respect to future volumes”.

“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.

It also said that in the year up to the compensation deadline in August 2019, for every additional 1,000 complaints per week above the current weekly average of 13,000, the group would expect to incur an additional charge of £150m.

Lloyds share were up nearly 2% in early trading.

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