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Lloyds Banking Group PPI bill rises by another £1.8bn Lloyds Banking Group PPI bill rises by another £1.8bn
(about 1 hour later)
Lloyds Banking Group says it is increasing its provision for the mis-selling of payment protection insurance (PPI) by another £1.8bn, bringing the total to nearly £10bn.Lloyds Banking Group says it is increasing its provision for the mis-selling of payment protection insurance (PPI) by another £1.8bn, bringing the total to nearly £10bn.
The increased provision reflected a greater number of successful complaints, the bank said.The increased provision reflected a greater number of successful complaints, the bank said.
But it also said underlying profits for 2013 would be £6.2bn - nearly double what analysts have been expecting.But it also said underlying profits for 2013 would be £6.2bn - nearly double what analysts have been expecting.
And the bank could restart dividend payments this year.And the bank could restart dividend payments this year.
Lloyds' PPI costs now total a potential £9.825bn. For all banks the bill is now approaching £20bn.Lloyds' PPI costs now total a potential £9.825bn. For all banks the bill is now approaching £20bn.
But BBC business editor Robert Peston argues that despite these provisions being "an extraordinary badge of shame" for the banks, the payouts have actually helped stimulate the UK economy.
"These PPI payments have played a very big role in encouraging economic recovery," he told BBC Radio 4's Today programme.
Paying dividends
Lloyds said it would be setting aside a further £130m relating to the sale of interest rate hedging products to small and medium-sized businesses.Lloyds said it would be setting aside a further £130m relating to the sale of interest rate hedging products to small and medium-sized businesses.
The bank added that the regulator, the Prudential Regulation Authority, would now consider allowing Lloyds to resume making dividend payments, given the group's improved financial performance.The bank added that the regulator, the Prudential Regulation Authority, would now consider allowing Lloyds to resume making dividend payments, given the group's improved financial performance.
Lloyds has not paid any dividends to shareholders since 2008.
"Modest" dividend payments would probably begin in the second half of 2014, the bank said."Modest" dividend payments would probably begin in the second half of 2014, the bank said.
Lloyds also said that it is preparing to sell billions of pounds of shares to the public, as part of its re-privatisation process.Lloyds also said that it is preparing to sell billions of pounds of shares to the public, as part of its re-privatisation process.
The government still has a 32.7% stake in the banking group but wants to return it to full private ownership by the next general election in 2015.The government still has a 32.7% stake in the banking group but wants to return it to full private ownership by the next general election in 2015.
The sale is expected in April.The sale is expected in April.
Lloyds Banking Group's shares fell nearly 3% in early morning trading, but remain more than 56% up over the last 52-week period.