Lloyds posts financial loss of £3.9 bln due to PPI claims

Tuesday, 08 November 2011 08:32

Lloyds Banking Group has made a loss of £3.9 billion in the first nine months of 2011. It had made a profit of £2 billion in the same period in 2010.

The bank, which is 41 per cent owned by the UK taxpayer, said the losses were mainly as a result of the cost of settling thousands of claims brought against it for mis-selling payment protection insurance (PPI).

Lloyds made the decision not to contest a high-court ruling against the Financial Services Authority (FSA) after a judicial review came down in favour of the FSA and found the banks liable for mis-selling PPI.

Lloyds says it has spent £3.2 billion on settling PPI claims in the first nine months of 2011. The banking group reported that its total income during the period fell by 15 per cent to £15.3 billion.

Lloyds put this down to the current weak levels of economic activity in the UK.

The chief executive of Lloyds, Antonio Horta-Osorio announced last week that he will be taking some time off for medical reasons, though he expects to be back in position before the end of the year.

He has been replaced on an interim basis by Tim Tookey, who, commenting on the results said that the bank was reducing costs and strengthening its balance sheet.

"Over time we believe our strategy will realise the full potential of our organisation for customers and shareholders."

The bank has cut a total of 45,000 jobs since the ill-fated merger with HBOS, just before the financial crisis of 2008.

Lloyds was ahead of target on its lending requirements under Project Merlin at the end of June this year.

Use the Myfinances.co.uk comparison tables to find the best deal on all types of insurance.
 

• Tags:
• banking
,
• lloyds
,
• news
,
• payment protection insurance
,
• ppi claims