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Lloyds Banking Group sets aside an extra £350m for PPI | Lloyds Banking Group sets aside an extra £350m for PPI |
(35 minutes later) | |
Lloyds Banking Group has set aside a further £350m to cover claims for mis-sold payment protection insurance (PPI). | Lloyds Banking Group has set aside a further £350m to cover claims for mis-sold payment protection insurance (PPI). |
The bank is making the additional provision after the Financial Conduct Authority (FCA) set a deadline of August 2019 for making new PPI complaints. | The bank is making the additional provision after the Financial Conduct Authority (FCA) set a deadline of August 2019 for making new PPI complaints. |
The FCA also said that some customers may have new grounds to complain. | |
Since the PPI scandal broke, Lloyds has set aside total compensation of £17bn. | Since the PPI scandal broke, Lloyds has set aside total compensation of £17bn. |
The relatively high sum of £350m to cover the additional two months added to the deadline follows the FCA's announcement earlier this month that some bank customers could claim if they were not made aware of commission being paid when they were sold PPI. | |
It follows a Supreme Court judgment in November 2014 - what is known as the Plevin decision - that extended the definition of mis-selling for PPI. | It follows a Supreme Court judgment in November 2014 - what is known as the Plevin decision - that extended the definition of mis-selling for PPI. |
The court agreed that the bank's failure to tell customers that it was receiving a large commission for sales was unfair. | The court agreed that the bank's failure to tell customers that it was receiving a large commission for sales was unfair. |
The FCA has decided that compensation will be calculated if commission of more than 50% was paid. | The FCA has decided that compensation will be calculated if commission of more than 50% was paid. |
Anyone who has had complaints rejected will receive a letter explaining that they could have new grounds for a claim. | Anyone who has had complaints rejected will receive a letter explaining that they could have new grounds for a claim. |
In a filing to the US Securities and Exchange Commission, Lloyds said the additional £350m provision will be reflected in the its results for the first quarter which will be announced on 27 April, and has no impact on guidance. | |
Royal Bank of Scotland, which set aside £601m for PPI claims in its most recent financial year, declined to comment on future provisions. Barclays also declined to comment. | |
PPI claims have been falling and in its most recent annual results, Lloyds' PPI provisions fell to £1bn compared to £4bn in 2015. Pre-tax profit rose from £1.6bn to £4.2bn. | PPI claims have been falling and in its most recent annual results, Lloyds' PPI provisions fell to £1bn compared to £4bn in 2015. Pre-tax profit rose from £1.6bn to £4.2bn. |
Shares in Lloyds rose 0.7% to 69p. | Shares in Lloyds rose 0.7% to 69p. |