Lloyds’ PPI bill hits £13.4bn as profits jump 38%

Lloyds Banking Group has added £1.4 billion to its bill for compensating customers mis-sold payment protection insurance (PPI), taking its total provision to £13.4bn.

But the state-backed lender was still able to report a 38 per cent rise in pre-tax profits for the first half of the year to £1.19bn and announce a 0.75p dividend for shareholders, amounting to £535 million.

The Treasury’s stake in the lender – rescued by the taxpayer at the height of the financial crisis – has shrunk to less than 15 per cent in recent months.

Chief executive Antonio Horta-Osorio said: “Today’s results demonstrate the strong progress we have made in the first half of the year.

“We remain focused on our aim to become the best bank for customers and shareholders while at the same time supporting the UK economy.”

The lender also took a £660m charge on the disposal of its stake in TSB, which is being bought by Spain’s Banco de Sabadell.