Lloyds has announced it will be increasing its allowance for the mis-selling of Payment Protection Insurance (PPI) by another £1.8bn, forecasting at least another 550,000 successful claims still to be made.
Lloyds’ PPI costs now total a potential £9.825bn. For all banks the bill is approaching £20bn.
George Culmer, Lloyds’ finance director, said predicting the cost of PPI was “fiendishly hard” but that the bank though it had got the numbers right this time.
The PPI scandal has troubled Britain’s banks for many years now years. The banks sold PPI to customers to protect loan repayments if they were ill or unemployed but in many cases the policies did not pay out or were not needed in the first place.
Lloyds said complaints fell towards the end of 2013 but that it no longer expects them to drop off as quickly as before. Its new forecast assumes at least another 550,000 complaints in the pipeline.