Lloyds makes 3.9bn loss after PPI settlements

Lloyds Banking Group has reported a 3.9bn loss for the first nine months of 2011, mainly due to the cost of settling claims for mis-selling payment protection insurance.BBC.com reported on Tuesday that the pre-tax loss for the period ending 30 September compared with a profit of 2bn a year earlier. Lloyds said that during the nine months it spent 3.2bn covering PPI claims.Its total income for the period also fell by 15 per cent to 15.3bn, indicating a decline in business levels.Lloyds said its latest results came against a backdrop of a weakening United Kingdom economic environment. It added that the cost of settling PPI claims was completed in the first half of the year.The banks results come six days after it announced that chief executive, Mr. Antonio Horta-Osorio is to take a medical leave.Lloyds expects Horta-Osorio, who only took up the job in March, to return to his position before the end of the year.Tim Tookey, who has taken up the chief executive role on an interim basis, said it was "very much business as usual" while Horta-Osorio was away.He added, "Theres nothing thats being stopped or paused while we go through these few weeks before we expect Antonio to return."Tookey, who is due to leave Lloyds in February after handing in his resignation over the summer, said that Lloyds was continuing to strengthen its balance sheet and reduce costs. The government currently still holds a 41 per cent stake in Lloyds.BBC business editor, Mr. Robert Peston, said Lloyds was being hit by the slowdown in the UK economy, but he questioned whether it and fellow banks were also at fault.Our editor said, "Some will say the banks are partly to blame for the sluggishness of the economic recovery, having pumped up the leverage in the boom years and now - in this era of so-called de-risking and deleveraging - starving businesses with good growth prospects of the credit they so badly need."
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