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Lloyds ups PPI provision to close to £10bn

Lloyds Banking Group has set aside a further £1.8bn for payment protection insurance redress, taking its total provision to close to £10bn.

Ahead of its 2013 results which are to be released on 13 February, Lloyds has this morning issued a statement to the London Stock Exchange warning of the additional provision, which comes on top of a total of £8.02bn previously set aside.

Lloyds said it expects to report “substantial progress” on its strategic plan, with underlying profit of £6.2bn for 2013, ahead of analyst consensus expectations and more than double that in 2012, and “small statutory profit before tax”.

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In the second half of 2013, Lloyds began discussions with the Prudential Regulatory Authority on the timetable and conditions for resuming dividend payments, it added. The bank expects that it will apply to the PRA in the second half of 2014 to restart dividend payments “at a modest level”.

António Horta-Osório, Lloyds Banking Group chief executive, said: “Our significant progress in delivering sustainable improvements in our capital position and our profitability, despite legacy issues, is testament to the strength of our business model and the commitment of our people, and has enabled the UK government to start to return the bank to full private ownership.

“We expect to apply in the second half of 2014 to restart dividend payments and to deliver progressive and sustainable payments to shareholders thereafter. This will be another important step in our journey to rebuild trust and confidence in our Group.”