UK Bank Lloyds Sinks Into Red On PPI Scandal

Britain's Lloyds Banking Group sank into the red in the third quarter after setting aside more cash to compensate customers mis-sold the controversial insurance product PPI, it said Thursday.

The UK high-street giant, which received a vast bailout during the global financial crisis, said in a results statement that it made a loss after taxation of ?238 million ($307 million, 276 million euros) in the three months to September.

That contrasted with net profit of ?1.4 billion in the same period a year earlier.

The lender took another ?1.8 billion hit to cover last-minute claims regarding a UK-wide practise of mis-selling payment protection insurance (PPI) over a number of years.

Chief Executive Antonio Horta-Osorio said he was "disappointed" that the performance was "significantly impacted" by the extra PPI charge.

However, he noted that it was "driven by an unprecedented level of PPI information requests received in August".

Most major British banks faced a rush of in compensation claims ahead of the deadline to seek compensation two months ago.

Lloyds was by far the worst affected British bank in the crisis.

While PPI was intended to cover missed payments, for example if a customer lost their job, in many cases consumers were unaware it had been added to a product, while others would never have been able to make claims under the policies.

LBG was the recipient of a vast state bailout during the global financial crisis.

However, it returned to full private ownership in 2017 after the government had steadily offloaded its stake by returning about ?21 billion to the taxpayer.

The London-listed financial services giant, whose brands include Lloyds, Halifax, Bank of Scotland and Scottish Widows, operates primarily in Britain with more than 30 million commercial and residential customers.