LLOYDS BANK PPI COSTS STABILISE, BUT HIT BY STORM LOSSES

Lloyds Banking Group plc has today reported an improved underlying group profit of £1.8bn in the first quarter of 2014, helped by a £400m dividend paid out by the bank’s insurance business. However, the bank’s insurance result was impacted by higher weather-related claims of £40m due to floods and storms in the first part of the year. The bank was also hit by the implementation of a cap on corporate pension fees, which resulted in a £100m charge in the quarter. Lloyds Bank’s insurance premium income fell in the first quarter of 2014 to £2bn, compared with £2.1bn in the same period of 2013. Insurance claims in the first quarter were £2.9bn compared with £12.bn in the same quarter of 2013. Unlike previous results announcements, Lloyds did not make a provision for Payment Protection Insurance (PPI) in the first quarter of 2014. Average monthly PPI complaint volumes were approximately 42,000 in the first quarter of 2014, marginally above the fourth quarter of 2013, it said. The bank has put a total of £9.8bn aside to pay PPI claims.