Sep 9, 2019
PPI scandal hits £50bn after claims rise at Lloyds and Barclays
Lloyds Banking Group has suspended its share buyback programme after becoming the latest lender to take a new charge tied to a mis-selling payment protection insurance scandal that has cost the British banking sector more than £50bn. The bank warned it would have to set aside between £1.2bn and £1.8bn after receiving a surge of last-minute compensation demands from customers ahead of a deadline late last month. The latest charge, following similar warnings from Royal Bank of Scotland, CYBG and the Co-operative Bank last week, means that Lloyds has set aside up to £21.9bn over the mis-selling of loans and credit card insurance that began two decades ago. The board of Lloyds has also cancelled the rest of the bank's £1.75bn share buyback programme, with about £600m of planned purchases uncompleted. The warning from Lloyds was widely predicted after several rivals lifted their provisions last week. Like its peers, Lloyds said that it was confident that only a small proportion of the inquiries - which were mainly driven by professional claims management companies - would be converted into formal complaints that led to compensation, but processing the millions of requests would still drive up its costs.
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