Lloyds Banking Group will put down as much as an additional 1.8 billion pounds ($2.2 billion) to settle misselling claims in Britain’s costliest client banking scandal, and mentioned it was suspending its 2019 share buyback program.
Banks are placing apart more money to pay claims towards missold payment safety insurance (PPI) following a rush of consumer inquiries about compensation forward of the deadline on Aug. 29.
PPI policies have been sold alongside a private loan or mortgage to cover repayments if borrowers fell ill or lost jobs, however, many have been unsuitable.
The PPI saga has already price lenders greater than 36 billion pounds in payouts, with analysts expecting the ultimate bill could high 50 billion pounds.
RBS said last week it confronted further costs of as much as 900 million pounds, while Clydesdale Bank made a new 300-450-million-pound provision.
As Britain’s most prestigious domestic lender, Lloyds has been the most exposed to PPI and has already paid out more than 20 billion kilos.
On Monday Lloyds stated it had acquired 600,0000-800,000 requests for details about PPI per week in August, effectively above its expectations of around 190,000 per week.
As a result, it expects to put aside an additional 1.2-1.8 billion pounds in its third-quarter results to cover payouts.
The bank’s shares fell more than 2% in early trading, earlier than scalping some losses to face down 0.7% at 0920 GMT.
Lloyds additionally said it had received a claim submitted by the Insolvency Service’s Official Receiver on behalf of bankrupt consumers, pushing prices higher.