Mar. 1 - British bank Lloyds made a loss last year after setting aside a further 1.5 billion pounds ($2.3 billion) to compensate customers mis-sold products. The costs of the so-called PPI scandal has now topped 14bln pounds so is it finally over? Hayley Platt reports.
It's already taken the biggest hit in the so-called PPI scandal. And now Lloyds has had to set aside another 1.5 billion pounds in compensation for mis-selling payment protection insurance. The bank's total bill is now expected to be 6.8 billion pounds. All the UK's major banks have mis-sold. And together Lloyds, Barclays, RBS and HSBC have set aside more than 14 billion pounds for compensation. Some say that could go even higher - possibly topping 25 billion. The policies were meant to protect customers in the event of sickness or redundancy. But they were often sold to borrowers who did not want or need them. BGC's Michael Ingram says we haven't seen the last of PPI yet. SOUNDBITE: Michael Ingram, BGC Partners, saying (English): "Given that consumers have up to nine years to appeal and seek compensation unfortunately, you know banks might be hemorrhaging cash due to PPI claims for quite some time to come." Part-nationalised Lloyds does appear to be moving on from the scandal. It narrowed its losses in 2012 to 570 million pounds from 3.5 billion the previous year. The government is getting ready to sell off its stake. But Alistair McCraig from IG Index says they shouldn't do it too soon. SOUNDBITE: Alistair McCraig, market analyst, IG Index, saying (English): "I think when we look across at the Atlantic and see how the Fed and the US have handled many of the companies that they bailed out. I think maybe it would be better to see if we couldn't hang on a little bit longer, extend the time-line. I think if it were to be given a bit more time, there would be a bit more profit to be had rather than covering costs." The stronger than expected figures have earned the bank's chief, Antonio Horta-Osorio a £1.5 million bonus. But Lloyds says it's conditional on shares reaching a price at which tax payers no longer make a loss and the government can sell a third of its stake. Shares fell 4 percent on the results - leaving taxpayers sitting on a loss of almost six billion pounds. ///