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Lloyds sets aside further $A1.6b over PPI

Press AssociationPress Association 26/10/2016

Lloyds Banking Group has set aside another STG1 billion ($A1.6 billion) to meet compensation claims for the mis-selling of payment protection insurance (PPI).

The UK lender is by far the worst affected by the PPI scandal, and on Wednesday said as part of its third quarter trading update that it would take a further hit.

The banking industry's PPI bill already stands at more than STG30 billion ($A47 billion).

Earlier this year the Financial Conduct Authority moved to put a June 2019 deadline on claims in an effort to draw a line under what has been one of the biggest banking scandals in history.

Lloyds also said it has accounted for a further STG150 million provision to cover other conduct issues, including STG100 million relating to packaged bank accounts.

The bank's underlying profit for the third quarter came in broadly flat at just under STG2 billion.

Results also show a pension hit following the Brexit vote, and comes as company schemes are hammered by falling bond yields.

The bank's schemes moved from a net surplus of STG430 million to a net deficit of STG740 million in the quarter.

The figures come after Chancellor Philip Hammond ditched plans for a Lloyds share sale to the public earlier this month, instead planning to offload the government's remaining nine per cent stake to institutional investors.

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