Lloyds bank PPI costs to rise by £750m

UK-based Lloyds Bank is reported to have designated a further £ 750m pounds ($1.2bn) to cover the costs associated with compensating customers for mis-sold payment protection insurance (PPI).

UK-based Lloyds Bank is reported to have designated a further £ 750m pounds ($1.2bn) to cover the costs associated with compensating customers for mis-sold payment protection insurance (PPI).

The recent increase will bring the total Lloyds expects to pay to £8bn, higher than any of its competitors.

UK banks have reportedly set aside over £16bn to repay consumers, in what has been labelled one of the most expensive scandals in British banking history.

The news overshadowed the announcement of an 83% rise in the company’s profits, said to be driven by a reduction in costs coupled with increased lending and improvements in interest rate margins.

Confirming analysts’ predictions, the bank reported a 9 month profit of almost £1.7bn at the end of September, up from £831m in the same period in 2012.

The news follows the company’s decision to split its previous Lloyds TSB name, re-branding 630 branches as TSB and 1,300 as Lloyds Bank.

The bank is in talks with the UK’s Financial Services Authority (FSA) to resume dividend payments in 2014, and has said it will reveal its dividend policy the following February, alongside its 2013 results.

 

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