The bill for PPI has gone past the £10bn mark for Lloyds

The bill for mis-sold Payment Protection Insurance (PPI) has moved above the £10bn mark for Lloyds Banking Group.

In the first half of 2014, the tax-payer backed lender made an extra £600 million worth of provisions, taking the total amount the bank has set aside to £10.4bn.

The bank said that whilst the volume of complaints related to PPI had been lower than anticipated over the first half of 2014, they still estimate a further 155,000 complaints.

The news came as the bank announced a 32% increase in underlying profits in the first half of 2014to £3.8bn and said it would ask the Bank of England for permission to begin paying dividends in the second half of the year, a development expected to ease the sale of the Government’s 25% stake following their 2008 bail-out.

Lloyds put the strong trading performance down to an improving UK economy that meant charges on bad loans declined by 58% compared to last year.

However, the banks pre-tax profits fell from £2.1bn to £863m over the period, this was due to the PPI charge and other issues including a £218m fine from US and UK authorities over rigging interest rates, as well as restructuring costs related to the EU-mandated sell-off of TSB.

Chief Executive of Lloyds, Antonio Horta-Osorio commented: “We continue to successfully execute our strategy, by investing in the products and services that our customers need.

 

Posted on Fri 08 Aug 2014