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Lloyds: We're taking responsibility for our PPI errors

Responding to today's record £117 million fine over its handling of PPI complaints, Lloyds Banking Group said that it takes responsibility for its mistakes and is looking to rebuild trust with customers.

We are trying to get it right for our customers and to rebuild trust. But we do not get everything right.

That means when we make mistakes, we will take responsibility for them.

This is what we have done here.

– Lord Blackwell, chairman of Lloyds Banking Group

The group said it has launched a programme to re-review or automatically uphold around 1.2 million PPI complaints.

It has also set aside £710 million to cover any redress due to affected customers, who are being contacted directly.

The group said that following its review, 90% of customers received payment and the remainder will be completed by the end of June.

Failings that led to Lloyds' record £117m fine

The £117 million fine handed out to Lloyds Banking Group today easily breaks the record for PPI penalties - the previous largest sum being a £21 million fine imposed on Clydesdale Bank two months ago.

Lloyds Banking Group has been fined £117 million Credit: PA

The sum is also the largest ever retail banking penalty imposed by the Financial Conduct Authority.

"As a result of Lloyds' misconduct, a significant number of customer complaints were unfairly rejected," the FCA said.

These are the failings that led to the state-backed bank's record fine:

  • Lloyds Banking Group workers rejected customers’ complaints about missold PPI, citing a "robust" sales process, when in fact, Lloyds was aware of "significant" failures in the sales process and mis-selling
  • Some customers whose PPI complaints had been rejected were told that their grievance had been "fully investigated" with "appropriate weight and balanced consideration [given] to all available evidence," when this was not the case
  • When Lloyds assessed a complaint, the customer's account of what had actually happened at the time of the sale was not always considered in a balanced way
  • Poor contact with customers about their complaint meant that some were not given an opportunity to provide evidence needed to reach a fair outcome


Lloyds fined £117m over handling of PPI complaints

Lloyds Banking Group has been fined £117 million Credit: PA

State-backed Lloyds Banking Group has reached a £117 million settlement with the Financial Conduct Authority over the way it handled complaints about payment protection insurance (PPI).

Lloyds apologised to customers affected and said £2.65 million worth of bonuses was being withheld from executives.

The group, which remains nearly 19% owned by the taxpayer after being rescued during the financial crisis, has already set aside £12 billion to cover the cost of compensating those mis-sold PPI.

The penalty to the FCA relates to the handling of complaints over the scandal during the period of March 2012 to May 2013.

Tories to promise £4bn cut-price Lloyds Bank shares

The public will be offered the chance to buy up to £4 billion worth of shares in Lloyds Banking Group below market price if the Tories win the General Election, David Cameron is set to announce.

The Government has already raised £9 billion from the sale of Lloyds shares. Credit: PA

The Prime Minister will say that existing plans to sell a £9 billion tranche of the taxpayers' stake will include a "retail offer" with a proportion of the shares being reserved for sale at a discounted price.

Buyers who keep them for a year will be rewarded with a "loyalty bonus" of one additional free share for every 10 shares that they still hold.

Mr Cameron will also confirm that, with Lloyds shares closing at 78.75p on Friday, shares will be sold below the "in price" of 73.6p - a share paid by the previous Labour government when it bailed out the bank following the financial crash of 2008.

Buyers will receive a discount of at least 5% on the market price at the time of the sale, with priority being given to investors purchasing up to £1,000 worth of shares.

The minimum purchase will be £250 and there will be a maximum limit of £10,000.

Profitable Lloyds to pay first dividend since bailout

Lloyds Banking Group will pay its first dividend to shareholders in six years - since its 2008 bailout - after reporting annual profits of £1.8 billion.

Lloyds Banking Group is 24% owned by the taxpayer. Credit: Stefan Rousseau/PA Wire

The payments to the three million shareholders will total £535 million after the fourfold rise in annual profits.

Lloyds Banking Group's annual profits.
The amount the Treasury will receive as part of the banking group's dividend payment.

Lloyds was rescued after an input of £20 billion taxpayer funds in 2008 at the height of the financial crisis.

The Government's 40% stake has since been reduced to 24%, meaning the Treasury will receive £130 million from the company's 0.75p a share dividend payment.

Report: Lloyds to cut 9,000 jobs over next three years

At least 9,000 jobs will be axed at Lloyds Banking Group over the next three years along with an unknown number of branch closures, Reuters has reported, citing sources.

The cuts would amount to 10 per cent of Lloyds' workforce and follow some 30,000 job axings by the company since the financial crisis of 2007 to 2009.

The Government still holds a 25 percent stake in Lloyds Banking Group after a £20.5 billion pound bailout in the wake of the financial crisis. Credit: Paul Faith/PA Archive

Reuters reported the job cuts will be announced by Chief Executive Antonio Horta-Osorio in a three-year strategy review next week.

The report said the increase of online transactions and automated bureaucracy will lead to the closure of some branches.


Lloyds chairman: Conduct was 'truly shocking'

The chairman of Lloyds Banking Group has admitted the company's manipulation of key interest rates was "truly shocking".

The company has been slapped with a £218m fine from US and UK regulators for manipulating the LIBOR inter-bank rate and the Repo Rate.

The Repo Rate was the benchmark used by the Bank of England to calculate how much banks paid to take part in the Government's Special Liquidity Scheme (SLS) to support banks during the financial crisis.

Lloyds Banking Group's chairman admitted it had been guilty of 'shocking conduct'. Credit: Anthony Devlin/PA Wire/Press Association Images

Lloyds chairman Lord Blackwell has replied to a highly critical letterwritten to him by the Bank of England's governor, Mark Carney.

"I absolutely share your concern about the nature of the SLS conduct, and in particular its implication for reducing fees," Lord Blackwell wrote.

"This was truly shocking conduct, undertaken when the Bank was on a lifeline of public support."

He also agreed that Lloyds would pay nearly £8m back to the Bank of England for fees it should have paid for the SLS.

Mark Carney warns of 'further action' against Lloyds

The governor of the Bank of England has warned that Lloyds and its subsidiary Bank of Scotland could face "further action" over the manipulation of benchmark interest rates.

In a letter to Lloyds chairman Lord Blackwell, Mark Carney said the BoE's Prudential Regulatory Authority would now consider whether to take further steps.

"In view of the seriousness of this matter, the PRA will consider whether further action should be taken in relation to the Firms or individuals at the Firms."

The banks have been fined for manipulation of the LIBOR rate and Repo Rate.

Bank of Scotland was formerly part of HBOS, which was taken over by Lloyds in 2009.

Mark Carney: Lloyds actions 'clearly unlawful'

The governor of the Bank of England has strongly condemned Lloyds Banking Group for its attempts to manipulate two key interest rates.

Part of Lloyds' £218m fine from US and UK regulators relates to its attempts to reduce the fees it paid to the Bank of England for the Special Liquidity Scheme - a government programme to help struggling banks during the financial crisis.

Mark Carney was highly critical of Lloyds' conduct. Credit: Lefteris Pitarakis/PA Wire/Press Association Images

The Bank of England has now published a letter from governor Mark Carney to the chairman of Lloyds, Lord Blackwell.

"Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved," Mr Carney wrote.

Lloyds fined for fixing fees for taxpayer help

About £70 million of Lloyds' fine from financial regulators is for trying to manipulate the fees payable to the Bank of England for taking part in a government scheme to support British banks during the financial crisis.

The group is set to pay a total of £218 million to UK and US authorities after it became the latest lender to be punished over the rigging of interest rate benchmarks.

Lloyds has been hit by fines from both US and UK regulators. Credit: Sean Dempsey/PA Wire/Press Association Images

Lloyds said the manipulation took place between May 2006 and 2009, adding that those involved have either left the company, been suspended or are subject to disciplinary proceedings.

Barclays was the first to settle Libor rate-rigging claims, paying £290 million in penalties to US and UK regulators in June 2012, while state-backed Royal Bank of Scotland was hit with a £391 million settlement.

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