Lloyds Banking Group, Britain's biggest mortgage lender, posted a third-quarter loss after setting aside an extra £1 billion (HK$12.4 billion) to compensate clients mis-sold loan insurance.
The net loss narrowed to £361 million from £501 million in the year-earlier period, London-based Lloyds said yesterday. Analysts had predicted a £4 million profit, according to the median estimate in a survey.
"We have made further significant progress this quarter, improving underlying performance in a challenging environment," chief executive Antonio Horta-Osorio, said. "Disappointingly, legacy issues continue to affect our results."
Lloyds had already allowed £4.3 billion, more than any other bank, to compensate clients who were forced to buy, or didn't know they had bought, insurance to cover their repayments on mortgages, credit and other loans. Barclays, Britain's second-biggest bank, said last month it would take an additional £700 million charge for payment protection insurance.
British banks have now set aside more than £10 billion to settle claims after regulators ordered them to compensate customers who bought payment protection insurance.
Barclays has provisioned £2 billion for insurance redress, Royal Bank of Scotland has earmarked £1.3 billion, HSBC £1.1 billion and Santander UK about £731 million.
