Lloyds To Pay Out GBP300 Million Over Mortgage Arrears Errors

Paterniano Del Favero
Luglio 27, 2017

It is also paying out £300 million to 600,000 customers who were charged incorrect amounts for late mortgage payments.

The bank says it will compensate customers for "distress and inconvenience", and losses that customers may have experienced as a result of not being able to keep up with unfair repayment plans.

The bank, which was fully returned to private ownership in May, posted a pre-tax profit of £2.5bn in the six months to the end of June, undershooting analyst estimates of £2.9bn.

Lloyds became the UK's biggest force in personal banking as a result of its absorption of HBOS - the former Halifax and Bank of Scotland - at the height of the financial crisis and was bailed out by the government at a cost of about £20bn.

The corrupt financiers were jailed earlier this year for the £245m loans scam which destroyed several businesses, before they squandered the profits on high-end prostitutes and luxury holidays.

It is also now undertaking a review of what happened. Its chief financial officer, George Culmer, said it was "disappointing" to be having to do it again. "Not all PPI policies were mis-sold, of course, but it would be reasonable to assume that there will have to be further provisions made".

The company had already earmarked £350mln in the first quarter for PPI ahead of the Financial Conduct Authority's August 2019 deadline for claims, bringing its total provision for the first half to over £1bn.

Aside from the interim compensation, Lloyds announced that it had made seven offers with a further eight in the "final stages" of assessment. In total, United Kingdom lenders have been forced to set aside more than £30bn to cover PPI compensation costs. But it was tempered by a higher-than-expected bill for compensating customers mis-sold loan payment insurance in what is Britain's costliest consumer scandal.

He admitted, though, that there would "always be redress costs" when running a banking business.

In its half-yearly results out today, the bank also set aside a £1.05bn charge for PPI, which includes an additional £700m provision taken in the second quarter to reflect current claim levels, which are higher than provisioned for. "The government has exited the bank and is now no longer selling stock in the market, which removes a significant downward pressure on the share price". The bank will outline its next plan in February, following years of reshaping after its taxpayer bailout in 2009.

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