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Lloyds increases PPI provisions by £375m

Lloyds Banking Group has increased its provisions for payment protection insurance mis-selling claims by £375m.

In its Q1 2012 interim management statement it says there has been an increase in the volume of PPI complaints forcing it to increase its claims pot total to nearly £3.6bn.

It states: “The group continues to monitor the position closely and will re-evaluate the assumptions underlying its analysis as more information becomes available.

“There is inherent uncertainty in making assumptions and the ultimate financial impact may differ from the amount provided.”

It became the second bank to increase its PPI provisions after Barclays increase its claims pot by £300m last month.

The bank revealed it lent £5.7bn, slightly down on last year’s total of £5.8bn, with £1.3bn going to first-time buyers.

It adds: “The group continues to develop its proposition for first-time buyers, including the launch of support for those customers affected by the end of the stamp duty exemption, the launch of our NewBuy mortgage proposition in full support of the UK Government-led initiative, and further expansion of the local Lend a Hand mortgage offering.”

The bank made a £288m profit comparing favourably to last year’s loss of £3.5bn, primarily down to PPI claims provisions made.

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