Lloyds’ additional PPI refund allocation saw a heavy reduction in its share values. The drop had reached 3.48 per cent to 64.53p. Lloyds’ falling share values had affected the benchmark FTSE 100, which had fallen by 0.34 per cent lower at 5,880.12 points.
According to reports, RBS, Barclays and HSBC, which are also affecting the FTSE100 index performance, would soon announce with Lloyds an additional PPI provision. No exact numbers have been reported, but £5 billion is estimated by observers. Santander UK may also be involved in the additional £5 billion.
Observers also noted the later additions by 2017 may be the biggest so far. Some mentioned an estimate of £5-7 billion.
Reports also said that Lloyds answers for £2.5 billion of the £5 billion estimate. Lloyds is currently refunding £14.5 billion. Barclays had refunded £5 billion. RBS has £4 billion in refunds.
The bill’s increase is attributed to the upcoming deadline of the FCA’s consultation on imposing a PPI deadline by 2018. Sources said Lloyds stock along with other high street banks could drop in the next two years.
The bill of £27 billion is estimated to increase to £35 billion before the PPI claims scandal meets its deadline.
To combat increasing numbers of administrative costs, banks are lobbying for a 12-month deadline instead of the two-year plan.