Business

Tuesday 30 September 2014

Major setback for Lloyds as PPI scandal costs over £8bn (€9.35bn)

Published 29/10/2013 | 07:41

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Lloyds is 33pc owned by the taxpayer

State-backed Lloyds bank fell back into the red as provision for the payment protection insurance (PPI) mis-selling scandal soared to more than £8bn (€9.35bn).

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The group, which is 33pc owned by the taxpayer, recorded statutory pre-tax losses of £440m in the third quarter of the year, compared with a £151m loss in the same period last year.

Underlying earnings nearly doubled to £1.52bn but the bank had to increase the money set aside for PPI provision by £750m to £8.02bn as complaints over the scandal fell more slowly than expected.

The bottom line was further weighed down by losses from sales of assets during a period when it disposed of a German life insurance business as well as operations in Australia.

The results were the first since the Treasury began the process of returning its stake in Lloyds to the private sector, selling a 6pc chunk for £3.2bn to institutional investors last month.

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