Lloyds bank first half net income up 15 percent

CEO Antonio Horta-Osorio said in a statement: “We are disappointed to announce further provisions today, but we do so from a position of financial and capital strength”.

Despite these payouts, the bank still increased profits by 38%.

He added: “We remain focused on our aim to become the best bank for customers and shareholders while at the same time supporting the UK economy”.

It means the bank has now set aside more than £13bn in compensation.

That took the total set aside to cover the debacle to a staggering £13.4bn, more than double any other bank.

The bank, which employs 7,000 staff to process PPI complaints, expects to see a significant decease in complaints in the next 18 months. The addition follows a £117m fine by the Financial Conduct Authority earlier this year over its previous mishandling of PPI claims.

Lloyds said it expected to increase dividends over the medium term to be paying out at least 50% of sustainable earnings, as well as consider one-off payments and share buybacks.

Britain’s financial regulator said in January it was considering imposing a deadline on customers claiming compensation to potentially draw a line under the scandal. He made favourable comments about the idea of a time bar on complaints.

Lloyds’ figures also reveal a £660m charge relating to the disposal of TSB, which is being bought by Spain’s Banco de Sabadell. Lloyds reported a first half statutory profit of 1.2 billion pounds, up 38 per cent from a year ago but below analysts’ expectations of 1.9 billion as a result of the additional charge for mis-sold payment protection insurance (PPI), the costliest consumer scandal in British banking history.

Horta-Osorio said Lloyds was on course to be fully privatised in the next 12 months.

But he said he understood the “political commitment” to a wider retail offer.