The Lloyds Banking Group increased the fund to pay Lloyds PPI compensation to £10.4 billion with the addition of an extra £600 million.
According to the Financial Conduct Authority´s second quarter PPI report; five major banking groups have recently increased – or are about to increase – their PPI provisions, with the Barclays PPI compensation fund growing by the largest amount and the Lloyds PPI compensation fund notable for breaching the £10 billion barrier.
The Financial Conduct Authority´s report also reveals that, since the Authority first started recording the value of PPI compensation payments in 2011, more than £15.5 billion has been paid to customers who were missold PPI. The report predicts that the current level of PPI compensation payments (c. £400 million per month) will continue for some time, and speculates that the PPI provisions of the leading banks and credit providers will soon total in excess of £20 billion.
A £20 billion PPI compensation fund does not seem so far-fetched when considering the volume of PPI complaints still under investigation at the Financial Services Ombudsman and that a significant number of missold customers are yet to claim PPI compensation.
In respect of the Lloyds PPI compensation fund breaching the £10 billion barrier, a spokesperson for the Lloyds Banking Group said that the additional provision of £600 million was in response to a slower than expected decline in the number of PPI claims being received – a statement confirmed by the Financial Conduct Authority´s report, which stated that claims for PPI refunds made against the Lloyds Banking Group are running at 70% of peak 2013 levels.
The provisions set aside to pay PPI compensation listed in the Financial Conduct Authority´s report were:
· Lloyds Banking Group – an additional £600 million bringing the Lloyds PPI compensation fund up to £10.4 billion
· Barclays – a further provision of £900 million brings the Barclays PPI compensation fund up to £4.85 billion.
· RBS/NatWest – added £150 million to the existing RBS PPI compensation fund, which now stands at £3.25 billion.
· HSBC – added a further £50 million to the HSBC PPI compensation fund which remains slightly above the £2 billion mark.
· Santander – anticipated to add £65 million to the existing Santander PPI compensation fund of £761 million.Read More