Lloyds Banking Group Plcs is facing an extra £2 billion for recompensing consumers mis sold PPI according to Credit Suisse Group. This contrasts the prediction of credit agency Standard and Poor’s of an additional £1 billion due for this month.
Lloyds, Britain’s biggest taxpayer-backed bank and mortgage lender, would take on a £661 million provision to cover PPI redress and its other legal troubles.
Following the £117 million fine by the Financial Conduct Authority, Lloyds Chief Executive Antonio Horta-Osorio will have his bonus cut by £350,000.
However, despite their losses, Lloyds is primed to increase its profits and dividends in the next three years. Analysts give Lloyds stocks a neutral rating as they estimate the bank will raise their dividend from £0.75 to £3 this year
UK taxpayer money had saved Lloyds, along with Royal Bank of Scotland, during the 2008 Financial Crisis. Finance Minister George Osborne said he would be returning the Royal Bank of Scotland Group to private ownership by the end of the year.
Both have contributed billions to refund customers who were mis sold PPI. Lloyds in particular has an amount of £12 billion (now possibly £14 billion) for the entire PPI fiasco.