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Lloyds reports £3.3bn loss after PPI costs

Lloyds Banking Group recorded a £3.3bn loss in the first half of 2011 after compensating customers who were mis-sold payment protection insurance.

Lloyds announced in May that it set aside £3.2bn for the provision of PPI compensation. The £3.3bn loss compares to the £1.3bn profit the high street bank made in the first half of 2010.

In June,  Lloyds announced that it was to cut 15,000 jobs in a bid to return to profitability. The job losses are part of package of cuts aimed at saving £1.5bn by 2014. The bank is also in talks to sell 632 of its branches as part of an agreement with EU regulators.

Lloyds chief executive Antonio Horta Osorio says: “‘We delivered a resilient first half performance, despite the ongoing challenges of economic and regulatory uncertainty, and have made substantial progress in restructuring and de-risking the Group. I expect the actions we are taking, as detailed in our Strategic Review announcement, to enable us to create a high performance organisation over time and deliver the best from our franchise for both our customers and our shareholders.’

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