Lloyds takes extra 2 bil. pound hit for misselling
February 4, 2014, 8:15 am TWN
LONDON--Britain's state-rescued bank Lloyds said on Monday it will take an extra hit of almost 2 billion pounds (US$3.3 billion) to cover misselling claims, but forecast a "small" annual profit.
Lloyds, which is 33-percent owned by the British taxpayer, added it would seek to resume shareholder dividend payments in the second half of this year, and said it was preparing for the government to sell more of its stake.
Lloyds Banking Group said it will take a provision in the fourth quarter of 1.8 billion pounds for claims relating to the misselling of payment protection insurance and 130 million pounds relating to the misselling of interest rate hedging products to small businesses.
"The PPI provision increase is principally based on the group's revised expectations for complaint volumes, uphold rates, and related administrative costs," it said.
That takes the group's total bill for the PPI scandal, which has blighted Britain's banking sector, to almost 10 billion pounds.
Lloyds revealed the news in a trading update issued before annual results that are due on Feb. 13.
The bank also forecast it would make a "small" statutory profit in 2013, while it expected to beat City expectations by posting an underlying profit of 6.2 billion pounds.