Lloyds Bank’s £13.4bn bill to compensate customers

Lloyds Banking Group set aside a further £1.4bn (€1.99bn) to compensate customers mis-sold loan insurance, pushing its first-half profit below analysts’ forecasts.

The charges take Lloyds’ bill for mis-selling loan insurance to £13.4bn, more than any other bank, and overshadowed plans by the bank to return excess capital to shareholders through special dividends or share buybacks.

The mis-selling of payment protection insurance (PPI) by banks and other financial services companies is Britain’s most expensive consumer finance scandal and has cost banks and other financial services firms about £28bn.