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Lloyds shares climb as bank raises PPI bill by 1bn

Article By: ,  Financial Analyst
November 1, 2012 10:15 AM

Shares in Lloyds have soared on the London Stock Exchange this morning (November 1st) following news the bank is setting aside an additional £1 billion to cover those who claim they were mis-sold payment protection insurance (PPI).

This brings the financial institution's PPI bill to £5.275 billion and the further provision means the company has increased its loss to £144 million for the third quarter of the year.

Lloyds has warned the eventual amount required for compensating those who were wrongly sold PPI is still uncertain, indicating that it might yet climb further.

PPI losses threaten to overshadow chief executive officer Antonio Horta-Osorio's success in helping Lloyds rebuild its reputation, after it was bailed out in 2008 leaving it 40 per cent state-owned.

This week, Barclays decided to ring fence another £700 million for PPI claims and the bill for the whole UK banking sector is now over £11 billion.

At 09:40 GMT, Lloyds shares on the London Stock Exchange were up by 3.2 per cent to 41.88p.

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