Lloyds Banking Group has seen its profits impacted by a large amount of people putting in last minute PPI claims.
Loan customers who were mis-sold PPI have until August 29th 2019 to claim for compensation. Lloyds have said they set aside an additional £550 million for any future claims as they have had a “significant increase in claims” this year.
Lloyds expects claims for PPI to rise to 5.8 million by the time of the deadline. Pre-Tax profits fell by 7% in six months before June 30th – from £3.1bn to £2.9bn.
There was as many as 64 million PPI policies were sold from the 1970s. They were aimed to cover loan repayments if the borrowers fell ill or lost their job.
Lloyds’ chief financial officer George Culmer said: “It’s obviously disappointing to see an increase in PPI claims. On one hand, we were happy to see the time bar as it meant more customers would come forward, and we’re glad that it’s having the desired effect.
“However, the extent at which it’s happening has caught us by surprise. We’re getting upwards of 190,000 requests a week, with only 10% being converted into claims.”
Lloyds would normally receive 70,000 information requests a week about PPI claims. Requests went up to 150,000 a week in the second quarter of 2019 and in July it was almost 200,000 a week!
Chief executive Antonio Horta-Osorio said: “The group has continued to make strong strategic progress during the first half of 2019 and delivered a good financial performance with market leading efficiency and returns.
“The economy has remained resilient although economic uncertainty has led to some softening in business confidence as well as in international economic indicators.
“In this environment our strategy continues to be the right one and we are well placed to support our customers and continue to help Britain prosper.”
