Lloyds: PPI claims will cost us another £500 million

Lloyds is setting aside an extra £500 million to deal with claims it illegally sold payment protection insurance, bringing its total bill to £13.9 billion.

The bank said “a number of risks and uncertainties remain,” because a lot of the PPI complaints were driven by claims management companies. The government said it would review the beahviour of PPI claimes companies, which could see compensation fall.

Lloyds announced a 6% boost in underlying profit in the first nine months to the end of September. The bank sold off non-performing loan portfolios and cut costs.

Lloyds CEO Antonio Horta Osorio said Lloyds is making “strong progress towards becoming the best bank for customers and shareholders while delivering resilient financial performance and further strengthening our market leading capital ratios.”

The UK government is planning to sell a £2 billion-pound stake in Lloyds to private investors next year, The bank was bailed out during the 2008 financial crisis at a cost of around £20 billion.

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