Lloyds Banking Group (LON:LLOY) is set to pay millions of pounds in compensation over mis-sold investment products, The Times has reported. The news marks a blow for the lender which is on course to be returned to full private ownership following its taxpayer-funded bailout during the financial crisis.
Lloyds’ share price has fallen deep into the red in today’s session, having lost 0.93 percent to 69.01p as of 09:24 BST, underperforming the broader London market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.22 percent higher at 7,403.13 points. The group’s shares have added more than six percent to their value over the past year, and are up by some 10 percent in the year-to-date.
The Times reported this morning that Lloyds was set to compensate thousands of customers who were mis-sold investment products as ‘low risk’ which turned out to be highly complex. The lender is writing to more than 7,000 customers of the bank and its investment arm Scottish Widows, offering money to those who bought structured investments, which have been the subject of growing anger among consumer groups because the products were said to be too complex and performed poorly.
The newspaper noted that according to the bank’s trade union, the group may have to pay about £80 million to Lloyds TSB customers and those who used Scottish Widows over the sale of the products.
“With some of our historic structured investment products we did not provide a small number of our customers with sufficient information before making their deposits,” Lloyds said, as quoted by The Times. The lender has reviewed 22,000 customers who bought the products and will offer redress to 7,250.