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Lloyds Bank reports losses of £3.5bn for 2011

The banking group was forced to set aside £3.2 billion to cover compensation claims after mis-selling insurance products to customers in 2011.

Image: Anna Gowthorpe/PA Wire/Press Association Images

LLOYDS BANKING GROUP, which is 40 per cent owned by the British state, has reported losses of £3.5 billion (€4.1 billion) for 2011.

The bank says the losses were mainly caused by £3.2 billion (€3.7 billion) being set aside to cover compensation claims following the mis-selling payment protection insurance (PPI) to customers. Last week, the bank announced plans to strip several existing and former senior bankers of more than £1 million (€1.2 million) in bonuses over their roles in the PPI scandal.

Despite the massive losses posted, the group said that it was in a “significantly stronger position than it was 12 months ago”. Setting aside the PPI scandal cost and other one-off charges, the bank made £2.7 billion (€3.2) last year – a 21 per cent rise on the same measure in 2010, the Press Association reports.

Royal Bank of Scotland, which is 83 per cent owned by the taxpayer, was the second-largest mis-seller of PPI in Britain last year – however its losses are half the size of Lloyds’, according to Reuters.

Lloyds Bank to strip bankers of £1m in bonuses>

Irish losses impact on Lloyds bank as it posts massive losses>

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