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Lloyds makes £583m loss with additional £1bn PPI provision

Antonio Horta Osorio 200

Lloyds Banking Group has made a pre-tax loss of £583m in the third quarter of 2012, after setting aside a further £1bn provision for payment protection insurance misselling.

The loss represents an improvement on the £3.9bn loss it made in the same period in 2011, when it set aside £3.2bn for PPI claims.

The provision takes Lloyds’ PPI bill to £5.3bn. The firm says it does not yet know what the full cost of PPI redress to the bank will be.

Lloyds’ interim accounts show total income fell 16 per cent to £13.8bn, down from £16bn the previous year.

A statement says: “A number of uncertainties remain as to the eventual cost to the group of PPI complaints. By the time of our full year 2012 results announcement on 1 March 2013, we expect to have a higher degree of confidence in forecast trends and the ultimate likely cost of PPI.”

Group chief executive Antonio Harta-Osório (pictured) says: “We remain confident that, by delivering our strategy to be a simple, customer-focused UK retail and commercial bank, we can rebuild the trust of our customers and other stakeholders and can deliver sustainable returns for our shareholders over time.”

Brunning Newman Houghton director David Brunning says: “It is very worrying that a heavily regulated organisation and major bank has no idea what its future liabilities are. I think it shows a failure on the FSA’s part in that these major institutions cannot accurately say where and to what extent their liabilities lie.”

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