Lloyds PPI Claims: The Story So Far

Lloyds Banking Group is a major British financial institution which was formed through the acquisition of HBOS by Lloyds TSB in 2009. HBOS is the holding company for Bank of Scotland plc which operates both the Bank of Scotland and Halifax brands in the UK as well as HBOS Australia and HBOS Insurance & Investment Group Limited which is the group’s insurance division.

HBOS was formed in 2001 by the merger of Halifax and the Bank of Scotland and this formation was, at the time, considered a great thing. It was thought that a fifth force in British banking was created.

A Brief History

The group’s history goes way back to 1765 when Lloyds Bank was founded. Their activities are organised into retail banking which includes mortgages and sole traders, commercial, life, pensions & insurance and finally wealth & international; a wide range of services.

Being the fourth oldest bank in the United Kingdom, it shouldn’t come as any surprise to you that they have extensive operations overseas in the US, Europe, the Middle East and Asia, they’ve had plenty of time to build up the relationships.

In 1995, Lloyds Bank merged with TSB, or the Trustee Savings Bank which then formed Lloyds TSB and in 2000 the group acquired Scottish Widows, a mutual life-assurance company based in Edinburgh. The deal totalled £7 billion which meant that the group became the second largest provider in the UK of life assurance and pensions after Prudential.

The deal to complete the takeover of HBOS by Lloyds TSB was concluded in September 2008 which meant that a banking giant would be born that held over a third of UK mortgages. However, it was only in January 2009 when Lloyds TSB Group changed their name to Lloyds Banking Group.

Scandals and Fines

Lloyds banking group are no strangers when it comes to receiving fines and being a bit naughty when it comes to the regulators. Indeed, the Lloyds Banking Group PPI compensation pot dwarfs the rest of the UK banks, taking up 40% of the total bill so far of £25 BILLION.

In August this year, whilst they were in the midst of being fined for the mis-selling of PPI, they were fined £218 million for the Libor rigging scandal and that is a meagre fine in comparison to what they’ve had to set aside for the payment protection insurance scandal.

Earlier this year, Lloyds was forced to set aside a further £600 million in order to cover their costs for the vast mis-selling of PPI that they have been involved in. The total Lloyds PPI claims bill is well over the £10 billion mark now and still rising.

On top of these two fines, there have been a number of other fines, smaller in comparison but still, they’re fines. They were also fined £28 million in December of 2012 for promoting a ruthless sales and incentives culture among their staff.