The bank becomes the latest UK lender to be hit with extra costs from a late rush of PPI claims.
Lloyds Banking Group is facing an extra bill of up to £1.8bn to cover a late rush of claims for the mis-selling of Payment Protection Insurance .
The bank said it saw"a significant spike" in claims in the run-up to the final deadline of 29 August.Lloyds also said it would be suspending its share buyback plan - a way of returning money to investors - because of the uncertainty over PPI payments. PPI was designed to cover loan repayments if borrowers fell ill or lost their job, but many were sold to people who did not want or need them.Last month's final deadline for PPI compensation prompted a surge of last-minute claims from consumers.An FCA ad campaign featuring an image of Arnold Schwarzenegger urged consumers to make claims before the deadline
Lloyds said that at the time of its half-year results in July, it had assumed that PPI claims would continue to come in at the rate of 190,000 a week."Including claims by the Official Receiver, the group now estimates that it will need to make an incremental charge for PPI claims, in addition to the provisions to 30 June 2019, in the range of £1.2bn to £1.8bn in its Q3 interim management statement," the bank said.
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