Lloyds Banking Group PLC Update on Payment Protection Insurance (6251L)
09 Settembre 2019 - 8:00AM
UK Regulatory
TIDMLLOY
RNS Number : 6251L
Lloyds Banking Group PLC
09 September 2019
9 September 2019
UPDATE ON PAYMENT PROTECTION INSURANCE
Lloyds Banking Group plc (the 'Group') is today providing an
update on charges relating to the mis-selling of Payment Protection
Insurance ('PPI').
At our half year results on 31 July 2019, the Group reported a
PPI charge for the first half of 2019 of GBP650 million, with an
unutilised provision of GBP1,083 million relating to complaints and
associated administration costs. At that time, the Group also
stated that its provision was based on the assumption that PPI
information requests ('PIRs') continued at the elevated level of
around 190,000 per week until the deadline for submission of claims
on 29 August 2019.
In line with the broader market, the volume of PIRs received in
August was higher than expected, with a significant spike in the
final days before the deadline expired. In the final month the
Group received approximately 600,000 to 800,000 PIRs per week, well
above the previous assumption. While the quality of these complaint
volumes remains uncertain, given initial sampling, we believe the
quality has continued at a low level. The Group also experienced an
increase in direct complaints in the same period. 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 GBP1.2 billion to
GBP1.8 billion in its Q3 Interim Management Statement. The
estimated range amounts are preliminary and unaudited.
The Group continues to process PIRs and the final PPI provision
could be above or below the range provided.
The Group now expects capital build in 2019 to be below our
ongoing 170 to 200 basis points per annum guidance and for the
statutory return on tangible equity to be lower than our 2019
guidance of around 12 per cent, with the final outcome dependent on
the actual charge taken.
In line with its prudent approach, and the uncertainty around
the final outcome for PPI, the Board has decided to suspend the
remainder of the 2019 buyback programme, with c.GBP600 million of
the up to GBP1.75 billion programme expected to be unused at
mid-September. In line with normal practice, the Board will give
consideration to the distribution of surplus capital at the year
end and continues to target a progressive and sustainable ordinary
dividend. As previously reported, the Board's view of the level of
capital required by the Group to grow the business, meet regulatory
requirements and cover uncertainties reduced earlier this year from
around 13 per cent to around 12.5 per cent, plus a management
buffer of around 1 per cent.
- END -
For further information:
Investor Relations
Douglas Radcliffe +44 (0)20 7356 1571
Group Investor Relations Director
douglas.radcliffe@lloydsbanking.com
Corporate Affairs
Matt Smith +44 (0)20 7356 3522
Head of Corporate Media
matt.smith@lloydsbanking.com
FORWARD LOOKING STATEMENTS
This document contains certain forward looking statements with
respect to the business, strategy, plans and/or results of the
Group and its current goals and expectations relating to its future
financial condition and performance. Statements that are not
historical facts, including statements about the Group's or its
directors' and/or management's beliefs and expectations, are
forward looking statements. By their nature, forward looking
statements involve risk and uncertainty because they relate to
events and depend upon circumstances that will or may occur in the
future. Factors that could cause actual business, strategy, plans
and/or results (including but not limited to the payment of
dividends) to differ materially from forward looking statements
made by the Group or on its behalf include, but are not limited to:
general economic and business conditions in the UK and
internationally; market related trends and developments;
fluctuations in interest rates, inflation, exchange rates, stock
markets and currencies; any impact of the transition from IBORs to
alternative reference rates; the ability to access sufficient
sources of capital, liquidity and funding when required; changes to
the Group's credit ratings; the ability to derive cost savings and
other benefits including, but without limitation as a result of any
acquisitions, disposals and other strategic transactions; the
ability to achieve strategic objectives; changing customer
behaviour including consumer spending, saving and borrowing habits;
changes to borrower or counterparty credit quality; concentration
of financial exposure; management and monitoring of conduct risk;
instability in the global financial markets, including Eurozone
instability, instability as a result of uncertainty surrounding the
exit by the UK from the European Union (EU) and as a result of such
exit and the potential for other countries to exit the EU or the
Eurozone and the impact of any sovereign credit rating downgrade or
other sovereign financial issues; political instability including
as a result of any UK general election; technological changes and
risks to the security of IT and operational infrastructure,
systems, data and information resulting from increased threat of
cyber and other attacks; natural, pandemic and other disasters,
adverse weather and similar contingencies outside the Group's
control; inadequate or failed internal or external processes or
systems; acts of war, other acts of hostility, terrorist acts and
responses to those acts, geopolitical, pandemic or other such
events; risks relating to climate change; changes in laws,
regulations, practices and accounting standards or taxation,
including as a result of the exit by the UK from the EU, or a
further possible referendum on Scottish independence; changes to
regulatory capital or liquidity requirements and similar
contingencies outside the Group's control; the policies, decisions
and actions of governmental or regulatory authorities or courts in
the UK, the EU, the US or elsewhere including the implementation
and interpretation of key legislation and regulation together with
any resulting impact on the future structure of the Group; the
ability to attract and retain senior management and other employees
and meet its diversity objectives; actions or omissions by the
Group's directors, management or employees including industrial
action; changes to the Group's post-retirement defined benefit
scheme obligations; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset
valuations, market disruptions and illiquid markets; the value and
effectiveness of any credit protection purchased by the Group; the
inability to hedge certain risks economically; the adequacy of loss
reserves; the actions of competitors, including non-bank financial
services, lending companies and digital innovators and disruptive
technologies; and exposure to regulatory or competition scrutiny,
legal, regulatory or competition proceedings, investigations or
complaints. Please refer to the latest Annual Report on Form 20-F
filed with the US Securities and Exchange Commission for a
discussion of certain factors and risks together with examples of
forward looking statements. Except as required by any applicable
law or regulation, the forward looking statements contained in this
document are made as of today's date, and the Group expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward looking statements contained in
this document to reflect any change in the Group's expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. The
information, statements and opinions contained in this document do
not constitute a public offer under any applicable law or an offer
to sell any securities or financial instruments or any advice or
recommendation with respect to such securities or financial
instruments.
This information is provided by RNS, the news service of the
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END
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