Image copyright
Getty Images
A surge in complaints about mis-sold payment protection insurance (PPI) weighed on Lloyds’ finances last year.
The UK banking giant posted a 26% drop in pre-tax profits to £4.4bn as it paid out billions of pounds to customers in PPI compensation.
The bill PPI claims in 2019 would be about £2.5bn, but Lloyds said no further provisions were needed as it had already set aside enough money.
It brings the total paid out by Lloyds over the mis-selling saga to £21.9bn.
Lloyds said there had been a “significant increase” in queries about PPI claims ahead of a deadline to claim in August last year.
The deadline, set by the City regulator, prompted a rush of enquiries, which pushed the bank’s bill up from £750m in 2018.
“The group’s statutory performance was impacted by a substantial PPI charge related to the deadline for claims submission,” the bank’s boss António Horta-Osório, said in a statement.
Lloyds has the biggest bill of all the banks for mis-selling of the insurance policy – which was intended to cover loan payments if, for instance, customers fell ill. But the insurance was often sold to people who did not want it or did not need it.
Mr Horta-Osorio took the helm after bank was rescued during the 2008 financial crisis. The government sold its final stake in the bank in 2017.