Lloyd's To Take Another Hit
Britain's largest retail bank, Lloyds is set to announce an increase in money for compensation to pay customers and clients for losses sustained on mis-sold loan insurance. The announcement would be made on Friday at its full year results report.
As of the moment, the bank has set aside GBP5.3 billion to reimburse customers under its payment protection insurance plan. The payout is the largest payment made by a bank and there are estimates that the amount could further balloon by another billion.
Under the policy, protection was extended to borrowers who found themselves unemployed due to illness or redundancy. The problem was the policy was even sold to individuals who did not need them.
In another front, the bank is also setting aside money too for compensation to small business owners who were wrongly sold complicated interest rate hedge instruments. These moves are largely as a result of unmitigated sales of instruments during the post 2008 crisis.