(Adds total cost to Lloyds)
LONDON, March 10 Lloyds Banking Group
took a surprise 350 million pound ($425 million) charge on
Friday to compensate customers mis-sold loan insurance, six
months after saying it had hopefully drawn a line under the
The new charge takes the bank's total cost to cover the
mis-selling of payment protection insurance (PPI) to 17.35
billion pound in what is Britain's costliest consumer scandal.
The charges for Lloyds are far higher than rivals because it
had the biggest share of the market.
The policies were meant to cover repayment loans if
customers fell ill or lost their jobs but were often sold to
people who did not need them or would be ineligible to claim.
Britain's biggest mortgage lender said the new charge will
be reflected in the bank's first quarter results to be announced
at the end of April.
The latest provision comes after Britain's financial
watchdog last week pushed back by a few months the time that
consumers have to claim compensation until Aug. 29, 2019.
Lloyds Chief Financial Officer George Culmer said in October
that the 1 billion pound charge the bank set aside last year to
repay customers up to the deadline would hopefully be the last
big amount to cover claims.
Regulators have had rules for PPI claims in place since 2010
and normally a deadline of three years is set, but surveys
showed many people were unaware they had bought the product.
($1 = 0.8230 pounds)
(Reporting by Andrew MacAskill; editing by Anjuli Davies and