The 40% state-owned bank has now set aside nearly £3.8 billion to deal with PPI compensation after a recent increase in the volume of claims.

Lloyds, which warned that the final cost of the PPI mis-selling scandal may change, revealed pre-tax profits of £288 million for the three months to March 31, compared with £316 million in the previous quarter and City expectations of £500 million.

Lloyds, which includes the Halifax, was pushed to a £3.5 billion loss in 2011 by the PPI mis-selling scandal, leaving taxpayers wondering when they will get their money back.

Chief executive Antonio Horta Osorio announced thousands of job losses as part of his strategic review, as well as plans to sell off large parts of its international operations.

Lloyds said it now expects to hit targets for reducing its non-core assets in 2013, rather than 2014, as it disposed of several businesses in the period, such as its onshore Dubai business to HSBC. But this hit total income, which declined 7% to £4.5 billion.

Lloyds cut its provision for bad debts to £1.7 billion, down 31% from the previous quarter, while its exposure to troubled eurozone countries Portugal, Ireland, Italy, Spain and Greece reduced 6% to £22.9 billion.

The bank said it advanced £3.25 billion of gross new lending to small businesses in the first quarter and is on track to fulfil its commitment of £12 billion of gross new lending to small and medium enterprises (SMEs) in 2012. Net lending to small businesses grew 4% year on year, compared with a 4% decline in the wider market, Lloyds said.

The bank reiterated that it was no longer in exclusive talks with the Co-op over its bid for 632 Lloyds branches. Lloyds is still in discussions with the Co-op but said renewed interest from financial investment firm NBNK meant it will consider detailed discussions with other parties.

The bank is still working on its own back-up plans to float the so-called “Verde” business on the stock market.

Copyright © 2012 The Press Association. All rights reserved.

The total number of complaints to banks and building societies rose by 29% in the last six months of 2011, with Barclays coming out on top. Photograph: Chris Ratcliffe/Rex Features

Barclays was the most complained about bank in the last half of 2011, with Lloyds TSB and Bank of Scotland not far behind, according to latest figures from the Financial Services Authority (FSA).

A continued surge in the number of complaints about payment protection insurance (PPI) increased the total number of complaints to financial providers by 21% between July and December 2011 compared to the previous six months.

This drove up the number of complaints to banks and building societies by 29%, according to the FSA, though grievances about banking products – credit cards, current accounts, savings and loans – were at their lowest level for five years.

Barclays customers made 281,000 complaints to the bank in the last half of 2011 – up from 251,000 from January to June. About half of the 146,000 complaints about banking at Barclays were upheld in favour of the consumer; complaints about general insurance and PPI numbered 123,000, with 68% going the customer’s way.

“We have made progress in getting banking complaints down by over 30% [from 2010 overall figures],” said Antony Jenkins, chief executive of Barclays retail and business banking. “Complaints are still higher than our customers should expect, but we are on the right track in bringing them down.”

Lloyds TSB, meanwhile, received just under 241,000 complaints, a huge rise from the 182,000 it had received in the first half of 2011. By banking group, Lloyds took the biggest share of complaints, with its Bank of Scotland division seeing 206,000 complaints compared to the 130,000 it received in the first half of 2011. The vast majority of these were about PPI.

Martin Dodd, Lloyds Banking Group’s customer services director, said: “When excluding general insurance and pure protection, the group reduced FSA-reportable complaints in 2011 by 24%.

“The group has also reduced banking complaints per 1,000 accounts from 2.1 at the end of 2010 to 1.5 at the end of 2011.”

NatWest and Santander also saw an increase in the number of complaints from the first to the second half of 2011, with Santander receiving the majority of those about its banking products and services.

MBNA, which saw its complaints rise from 71,000 to 121,000 put the majority of these down to PPI. “The primary driver is PPI and we find that that is being inflated by aggressive claims management companies,” a spokesman for the bank said.

Claims management companies take up PPI claims on consumer’s behalf and then take a cut of any money rewarded. The Ministry of Justice has just launched an investigation into such firms following a glut of invalid compensation claims on behalf of consumers, something that is causing consternation at the banks.

The overall figures show that complaints about “advising, selling and arranging” increased by 69% to 1,093,684, with 92% of these about general insurance and pure protection products. The percentage of complaints about current accounts dropped by 6%, and there was a 12% reduction in the percentage of complaints about savings and other banking products.

Complaints about credit cards and unregulated loans increased, as did those about critical illness and income protection insurance.

Financial firms must report any complaints made to them to the FSA as well as publishing them on their own websites. The watchdog will then publish those that have reported 500 or more complaints in a six-monthly reporting period, but will exclude any complaints that are resolved to the customer’s satisfaction by the close of the business day after the complaint was made.

Source: http://www.guardian.co.uk/money/2012/mar/28/barclays-tops-fsa-complaints-list

Customers will need to respond to the letters to make a claim for compensation.

Consumer groups have pointed out that people can complain directly, for free, without using a claims management company that would charge a proportion of any resulting payout for its service.
‘Expectations’

PPI was supposed to repay people’s loans if their income dropped because they fell ill or lost their jobs, but hundreds of thousands of people were mis-sold the policies.
If you feel you have been a victim of poor practice then please do respond to the firm

Martin Wheatley FSA managing director

Banks paid out £1.9bn to the victims of mis-sold PPI last year, with many thousands of people having successfully applied for compensation.

The FSA said these institutions were now looking into how to treat customers who had been mis-sold PPI, but had not complained.

“We think that the redress due from this process may well exceed what has been paid so far, and that is why we are acting now to clarify our expectations,” said Martin Wheatley, FSA managing director.

“By ensuring that firms are clear about the problems they have identified and the potential redress due, we are aiming to prevent people running out of time if they choose to complain.”
‘Jargon-free’

The FSA expects banks to write a total of anything between four million and 12 million letters to customers who might have been affected.

These must:

Make it clear to customers that the letter is important, that they might have been mis-sold PPI, and why
Explain that they might have lost out financially and could claim for compensation
Be written in language that is free of jargon and marketing
Point out that any claim might be subject to a time limit

The FSA said that, in most cases, deadlines included a six-year timescale from the date of sale for customers to complain.

However, customers must put in a claim within three years of when they were made aware, or ought to have been aware, that they had cause to complain.

“Historically, response rates for these types of exercises are low – sometimes as low as one in 10. Therefore, if you receive a letter, it is important to consider your PPI purchase carefully and if you feel you have been a victim of poor practice then please do respond to the firm,” said Mr Wheatley.

Martin Lewis, of MoneySavingExpert, said: “Not everyone who has been mis-sold PPI will get a letter.

“Providers only need write to those who have been ‘systemically mis-sold’, yet there are many more individual cases. Check through all loans, credit cards and store cards you have had in the last 10 years to see if this insurance was added to it.”

The British Bankers’ Association (BBA) and the Association of Finance Brokers (AFB), which represent banks and lenders, said letters were being sent out to customers in stages.

“The agreed aim is to make letters more accessible and readily understandable for customers,” said a spokesman for both bodies.

“The industry wishes to ensure that the exercise is effective and will endeavour to handle responses from customers promptly.”

Source: BBC visit http://www.bbc.co.uk/news/business-17269048 for full story

Lloyds Banking Group is to announce that it intends to “claw back” bonuses from as many as 10 senior bankers because of the £3.2bn losses that the bailed-out bank suffered after the payouts were awarded a year ago.

Between 40% and 50% of the bonus pot is thought to be at risk. Details were still being finalised on Sunday night and the figure could drop as low as 25% – which may not satisfy some critics who will question why any bonuses should be paid out at all after the bank took the losses to cover the misselling of payment protection insurance (PPI).

Among those facing the consequences of the adjustment of the bonus pot caused by the PPI scandal are the former chief executive Eric Daniels and his closest lieutenants, some of whom have left the bank since his departure a year ago.

Lloyds would not comment on Sunday night, but the chairman, Sir Win Bischoff, acknowledged at the bank’s annual meeting in May that a clawback was being considered by the bank.

“The implications on compensation are being considered by the remuneration committee and will be determined by the board in due course,” he told shareholders when asked about the implications of the PPI provision.

In February 2011 Daniels was awarded a £1.45m bonus for his work in 2010 as he announced that the bank had returned to profitability following its controversial rescue of HBOS.

But just weeks after he left, his successor, António Horta-Osório, announced that the bank would need to take the hit for the misselling of PPI, which is intended to keep paying off loans in the event of illness or job loss but often failed to live up to its promises.

Lloyds is not alone in having to take a provision for the misselling of PPI, but it took the biggest hit in the industry, which has collectively been saddled with a bill of more than £6bn.

Among the other Lloyds bankers thought to be facing financial penalties for the losses that the bank will have to report for 2011 are Helen Weir, the former head of the retail banking arm, who was last week named as the new finance director of John Lewis. She received a bonus of £875,000 for 2010.

Others are said to include Tim Tookey – the outgoing finance director, who is due to present the bank’s 2011 losses to the City on Friday – and Truett Tate, the head of corporate banking, who is already facing controversy over a one-year payment he is contractually entitled to when he leaves in May. Tookey was awarded a bonus of £942,000 and Tate more than £1m.

Other members of the senior management team are also expected to receive lower bonuses than they had been expecting through a process that has not been fully tested since the banking crisis, when regulators demanded that bonuses could be “clawed back” in the event that performance turned sour in the future.

The requirement was made after it emerged that thousands of bankers had walked away with multimillion-pound bonuses in 2007, only for their banks to report huge losses the following years.

When Daniels was awarded the bonus – which was 63.3% of his maximum potential payout – in February 2011, it was deferred for three years, which means he has not yet received the money, in the form of shares.

Other banks will also face questions about whether they are able to claw back bonuses for the losses they suffered as a result of PPI provisions, which none of the major players have been able to escape.

Both bailed-out banks, Lloyds and Royal Bank of Scotland, are due to publish their 2011 results this week, and both are expected to be loss-making some three years after the October 2008 crisis. Details of executive pay are usually published up to three weeks later in the annual reports to shareholders.

Lloyds TSB PPI Claim Back

Britain’s economy is about to get a dose of fiscal stimulus equivalent to a tax cut of as much as £10bn over the next few years, economists say.

The unplanned stimulus arises from refunds of payment protection insurance, which have risen sharply each month since August.

Then, banks and brokers that sold PPI to an estimated 16.1m people agreed to abandon legal efforts to overturn an order for restitution.

PPI customers paid premiums totalling £17bn between 2005 and 2010, according to the Financial Services Authority.

For th full article visit the FT web site or visit http://www.ft.com/cms/s/0/ab7e42ee-5288-11e1-ae2c-00144feabdc0.html#axzz1m9raeePK

In the first 6 months of 2011 nearly £500,000 was claimed alone. Customers were sold PPI policies to help protect them if they defaulted on the loan, mortgage, or credit card payments, should they be made redundant or become sick. The insurance was found to be sold to many people who would never be able to actually make a claims.

For many of the customers, the scheme didn’t work, and making a claim was almost impossible. Martin Lewis of Money Saving Expert said at the time the appeal was lost: “As much as £9billion that was wrongly taken from consumers could now be paid back – an economic boost as money from banks’ coffers will move into the pockets of real people.”

With potential billions still unclaimed 2012 looks set to another year where people claim back their PPI.

If you have paid PPI on a credit card or loan to a bank then take our quick test to see if you are due compensation.

Barclays Bank PPI Claim Back

Natwest Bank PPI Claim Back

Royal Bank of Scotland Bank PPI Claim Back

Lloyds TSB Bank PPI Claim Back

Halifax Bank PPI Claim Back

Santander Bank PPI Claim Back

If you have any questions please call us on 01522 300456 or use our contact form.

Figures published today show that the banking group, which includes the Lloyds TSB, Halifax, Bank of Scotland and Black Horse brands, pulled in a total of 22,242 complaints in the first half of 2010, compared with 20,190 in the second half of last year.

Lloyds TSB Bank attracted nearly twice as many complaints as the next company in the tables. Barclays Bank came second in the table for the second six months running, with 7,991 complaints, of which 4,797 related to banking and credit and 2,205 to general insurance.
The financial ombudsman upheld 61% of the complaints against Barclays.

The ombudsman service received a total of 84,212 new complaints between 1 January and 30 June, a small increase on the 82,136 cases received in the second half of 2009, and a large proportion of which related to the sale of payment protection insurance. The majority of these complaints, which were included in the figures for general insurance, were upheld, including 96% of general insurance complaints against Black Horse, 95% against Barclays, 93% against Welcome Financial Services and 86% of those against Lloyds TSB

One of the UK’s biggest high street banks has missed a crucial deadline to contact complainants of the £7bn payment protection insurance (PPI) mis-selling scandal.

HSBC who have been behind the Black ball throughout the last 2 years processing claims have  failed to respond to the backlog of complaints made by customers who believe they were mis-sold PPI by August. HSBC state that they will be informing the last of the complainants within the next few days. It is understood that it will take longer to sort out ther mess.

HSBC, which has a PPI liability of £270m, compared with £3.2bn from Lloyds TSB said it expected to inform customers of the amounts they would be paid within a matter of days.

It is understood that the the majority of banks who were given 16 weeks to process claims have achieved their target. It will probably mean that the FSA will impose regulatory fines because of this.

Just another case of a Bank not taking the PPI scandal seriously.

The Financial Services Authority (FSA) today published details of the amount of redress paid by firms during the first six months of 2011 to consumers who have complained about the way they were sold payment protection insurance (PPI).
The data shows that 16 firms, representing 92 per cent* of PPI complaints received in the first half of 2011, have paid a total of £215 million in redress between January and June 2011 inclusive. In May and June alone, following the dismissal of the industry’s legal challenge to the FSA and the Financial Ombudsman Service (the Ombudsman), £102 million was paid out.

The monthly totals, with cumulative totals in brackets, are:

•January – £29 million (£29 million)

•February – £31 million (£60 million)

•March – £28 million (£88 million)

•April – £25 million (£113 million)

•May – £37 million (£150 million)

•June – £65 million (£215 million)

The figures include the value of ex-gratia payments made to complainants and cases settled by the Ombudsman.

The FSA is publishing this data as a simple measure to allow firms, consumers and other interested parties to keep track of the progress being made. The FSA will continue to publish this data on an ongoing monthly basis accompanied by a running total.

The FSA has also created a step by step video guide featuring the FSA’s head of consumer affairs, Chris Pond, explaining the process of how to complain to financial services providers. You can view this video now on our website.

Margaret Cole, interim managing director of the FSA’s conduct business unit, commented:

“The treatment of PPI complainants has left an indelible stain on the financial industry’s record. By releasing these figures we’re providing a useful measure of firms’ progress that can be tracked on an ongoing basis.

“While the amount of redress paid in May and June is unsurprisingly large in the wake of the judicial review, looking ahead we expect the amounts to vary somewhat as firms clear their backlogs while dealing with complaints as well.

“We remain 100 per cent committed to ensuring that where consumers were mis-sold PPI they will receive the appropriate redress from firms, and we are monitoring firms’ progress to ensure this is done properly.  Where we find that this not to be the case, we are not afraid to take tough action.”