Lloyds sets aside £600m for PPI and branch misselling

Lloyds-Banking-Group-640.jpgLloyds Banking Group has set aside a further £500m to cover further payment protection insurance redress and £100m for misselling through its bank branches.

In the three months to the end of September, pre-tax profits surged 28 per cent to £958m, up from £751m during the same period last year.

The bank has now earmarked almost £14bn to cover PPI customer compensation. In the summer Lloyds was hit with a record £117m fine by the FCA over PPI misselling.

The group incurred a further charge of £100m relating to potential claims and redress for products sold through the branch network. Lloyds’ total provision for redress n the first nine months of 2015 now stands at £535m.

Lloyds Banking Group chief executive António Horta-Osório says:  “These results, coupled with our simple, low risk, UK focused business model, underpin our confidence in the group’s future prospects and our strategic direction.”

The Government, which still has a 12 per cent stake in Lloyds after bailing it out during the financial crisis with a £20.5bn cash injection, plans to sell £2bn worth of shares at a discount to the public sometime next spring.

Following Lloyds’ market update, shares in the bank tumbled by 4 per cent to 73.98p in early trading.