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| Lloyds profits fall on PPI claims | Lloyds profits fall on PPI claims |
| (35 minutes later) | |
| Lloyds Banking Group has reported a 7% fall in annual pre-tax profits to £1.6bn compared with £1.8bn a year earlier. | Lloyds Banking Group has reported a 7% fall in annual pre-tax profits to £1.6bn compared with £1.8bn a year earlier. |
| It comes as the bank increased provisions for payment protection insurance (PPI) compensation. | It comes as the bank increased provisions for payment protection insurance (PPI) compensation. |
| The bank set aside £4bn to compensate customers who were mis-sold PPI. | The bank set aside £4bn to compensate customers who were mis-sold PPI. |
| That included a £2.1bn provision in the last three months of 2015 after the City watchdog imposed a deadline on compensation claims. | That included a £2.1bn provision in the last three months of 2015 after the City watchdog imposed a deadline on compensation claims. |
| Lloyds Banking Group has faced the largest amount of PPI compensation claims. The new provisions take the total the bank has set aside to pay compensation to £16bn. | |
| The bank said it welcomed "the decision of the Financial Conduct Authority to consult on a deadline for PPI complaints and the certainty that this will bring for both customers and shareholders". | |
| The FCA has proposed a time bar that will allow people to claim compensation for mis-sold PPI until 2018 before drawing a line under the affair. | |
| 'Strong start' | |
| The bank also said it incurred a charge of £837m relating to complaints about packaged bank accounts and "a number of other product rectifications primarily in retail, insurance and commercial banking". | |
| The bank, which restarted dividend payments to shareholders last year after a six year break, announced it would pay shareholders an ordinary dividend of 2.25p per share, plus a special dividend of 0.5p giving a total payout to shareholders of £2bn. | |
| Lloyds Banking Group chief executive, Antonio Horta-Osorio said: "We made a strong start in 2015 to the next phase of our strategy and have delivered a robust financial performance, enabling increased dividend payments." | |
| The bank's annual results come a month after the Treasury announced it was postponing plans for a sale of Lloyds' shares to retail investors worth £2bn until global stock market volatility had eased. | |
| The government, which held 43% of Lloyds after its rescue in 2008 has reduced the taxpayer's stake in the bank to around 9% now. |