Lloyds warns of hard recovery

Lloyds warned of a long, hard economic recovery and set aside an extra £375 million (€458.22m) to compensate people mis-sold insurance, underscoring the challenge facing Britain’s banks as they battle to recover from financial crisis.

Lloyds, 40% owned by the government after a bailout during the 2008 crisis, said it was making progress in reducing its loan book, cutting costs and reining in bad debts — all key parts of its recovery plan.

But its planned sale of 632 branches is dragging on, highlighting the tough market facing sellers of British banking assets, and it struck a downbeat tone about the UK economy, which tipped back into recession last quarter.