NEWS
01/11/2012 04:07 GMT

Lloyds PPI Bill Reaches £5 Billion As Claims Stack Up

The bill for mis-sold payment protection insurance (PPI) at taxpayer-backed Lloyds Banking Group smashed through the £5 billion barrier as claims against the bank continue to pile up.

The 40% state-owned lender was pushed to a £144 million loss in the three months to September 30 as it took an additional £1 billion charge for dealing with the scandal, taking the total to £5.3 billion and pushing it into loss in its third quarter.

Stripping out the cost of PPI, the group doubled its underlying profit to a better-than-expected £840 million in the third quarter as its slashed bad debts and narrowed losses from its non-core businesses.

PPI is now the most complained-about product of all time. The second highest is mortgage endowments with around 350,000 complaints so far.

In the ombudsman's corporate plan and budget (published in January 2012), forecasts suggested that the ombudsman would receive 165,000 PPI complaints in 2012/13 - given 140,000 have already been made, it's likely the ombudsman will reach that target in the next fortnight.

The ombudsman has said if complaints continue at the current rate, it is likely that this figure will be double the estimate by the end of the financial year (April 2013).

Barclays Bank announced on 18 October it had put aside a further £700m to pay claims for mis-sold payment protection, taking its total claims pot to £2 billion.