October 28, 2013 / 8:37 PM / 6 years ago

Lloyds' PPI compensation bill to rise to 8 billion pounds: Sky News

A pedestrian is seen passing the head office of the Lloyds Banking Group in central London in this August 5, 2009 file photograph. REUTERS/Stefan Wermuth/Files

(Reuters) - Britain’s Lloyds Banking Group (LLOY.L) will have to spend at least another 700 million pounds ($1.13 billion) to compensate customers who were mis-sold payment protection insurance (PPI), Sky News reported, without citing sources.

Part-nationalized Lloyds plans to make the announcement on Tuesday, pushing the lender's total PPI compensation bill past 8 billion pounds, the broadcaster said on its website. (link.reuters.com/nyb34v)

The news comes after this month’s data from Britain’s Financial Conduct Authority (FCA) and Ombudsman Service - which steps in where banks and their customers cannot reach agreement - showed that complaints against banks had fallen, raising hopes that they would not need to pay any more towards PPI compensation.

Britain’s biggest banks have so far set aside 16 billion pounds to deal with what has become the most expensive consumer scandal in British history. The loan insurance policies were meant to protect borrowers in the event of sickness or unemployment, but were often sold to those who would have been ineligible to claim.

Lloyds, which declined to comment, had by August set aside 7.3 billion pounds to cover the mis-selling of PPI, more than any other British bank, having sold more policies than rivals.

($1 = 0.6199 British pounds)

Reporting by Richa Naidu in Bangalore; editing by David Evans

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