FRIDAY MARKET CLOSE: Lloyds falls after PPI bill hits £13.4bn

Lloyds Banking Group was the heaviest blue-chip faller as a ballooning bill for mis-sold payment protection insurance (PPI) took the shine off higher profits.

Picture: PA

The state-backed lender set aside an extra £1.4 billion to compensate customers, taking its total PPI provision to £13.4bn and sending shares in the Bank of Scotland parent down 2.82p or 3.3 per cent to 83.2p.

However, the wider FTSE 100 Index gained 27.41 points to close at 6,696.28 on the final trading session of July.

Chris Beauchamp, senior market analyst at IG, said: “Next week is going to be dominated by what happens on Thursday and Friday. The Bank of England’s decision to roll several events into one marathon session will likely lead to a long process of investigation as to whether this central bank will move first, while [US non-farm payrolls] are certain to produce plenty of excitement given the volume-light sessions that prevail in August.”

ITV added 9.1p or 3.4 per cent to finish at 280.7p after Virgin Media owner Liberty Global raised its 6.4 per cent stake in the broadcaster to 9.9 per cent, although the US cable giant insisted it did not intend to make an offer for the firm.

Investor activity also helped propel aerospace engines maker Rolls-Royce higher. US hedge fund ValueAct has built up a 5.44 per cent stake in the group, which yesterday reported a 32 per cent slump in profits for the first half of the year, and shares powered 44.5p or 6 per cent to 794p to put it at the top of the Footsie risers’ board.

Cruise ship operator Carnival steamed ahead 176p or 5.2 per cent to 3,552p, with traders attributing the gain to the release of better-than-expected numbers from New York-listed rival Royal Caribbean, which said adjusted net income jumped 26 per cent in the second quarter.