Lloyds Banking Group has set aside a another £500 million to compensate customers missold payment protection insurance (PPI) – as its finance chief branded the new 2018 deadline for further claims as “excessive”.
The Financial Conduct Authority said this month that it intended to set the new deadline for people to claim compensation, a decision that was seen as positive for the most UK-centric of the big five banks.
But unveiling a fall in Q3 profits at the bank, finance director George Culmer said the deadline should be brought forward.
“We think two years is excessive,” he said. “We think a shorter time bar will get people to act and get receipt of their money more quickly. In terms of general awareness, two years is not required.”
The latest provision at Lloyds, whose underlying pre-tax profit fell 8 per cent to £2 billion, brings the bank’s total bill for PPI mis-selling to £13.9bn, more than double that of any other lender. Over the past five years the industry has set aside more than £28bn to meet loan insurance compensation claims. The City was disappointed with the latest trading performance, having expected a profit similar to the £2.2bn in the same quarter last year.
Total income at Lloyds declined 4 per cent to £4.2bn, also below forecasts, as it said the performance of the commercial banking division – lending to larger but not the biggest companies – was hit by difficult trading conditions. Income was also lower in the insurance arm. Citi analyst Andrew Coombs said: “The results are poor, while there is also limited commentary on the divi outlook.”