Lloyds share price: Lender unveils fresh £350m PPI charge

on Mar 10, 2017
Updated: Oct 21, 2019

Lloyds Banking Group (LON:LLOY) has booked an additional £350-million charge related to mis-sold payment protection insurance (PPI), taking its total bill for the scandal to £17.4 billion. The move came after the Financial Conduct Authority (FCA) recently set a final deadline for PPI claims in 2019, later than previously forecast.

Lloyds’ share price has advanced in today’s session, having added 1.18 percent to 69.36p as of 13:32 GMT, outperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.71 percent higher at 7,366.54 points. The group’s shares are up by nearly 11 percent this year, but continue to trade below the taxpayer’s break-even price of 73.6p.
Lloyds announced in a statement today that it had taken an extra £350-million provision to compensate customers who were mis-sold PPI. The disclosure was made in the bank’s Annual Report on Form 20-F with the Securities and Exchange Commission (SEC), where the bank also noted that its total PPI bill had climbed to £17.38 billion.

Lloyds explained that it had made the extra provision after the FCA pushed back by a couple of months the deadline for PPI claims until August 29, 2019. The charge further reflects revised arrangements for Plevin cases which require lenders to proactively contact customers who have previously had their complaints defended, and which are likely to increase estimated volumes and redress.
The bailed-out lender said that the additional charge will be reflected in the group’s first quarter results, scheduled to be announced on April 27, and has no impact on guidance.
Lloyds has sold a total of about 16 million PPI policies since 2000, and estimates to have contacted, settled or provided for approximately 50 percent of those policies since the start of the PPI redress programme in 2011.
As of 13:59 GMT, Friday, 10 March, Lloyds Banking Group share price is 69.19p.

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