Lloyds Banking group is one of the biggest banking groups in the United Kingdom. It was known to many that the bank has suffered a lot from the Payment Protection Insurance compensation claims (PPI Claims). The current PPI scandal that the bank is facing has forced the bank to allot £3.6 Billion intended for PPI compensation payouts to the banks customers. The bank is known to be providing a lot of financial services in the UK. Lloyds is already expecting an increase of £6.8 Billion from the PPI claims alone. Big sum of amount was used by the bank to compensate the customers who were victims of mis-selling; this includes the £400million for compensation payments given to victims due to an interest rate mis-selling to small business.
As for the trading, the banks’ sales decreased by 3.76 percent and the decreased were coming from the bank’s biggest problem on compensation claims. The huge percentage of the bank’s loss was largely affected by the PPI claims scandal. Up until now the bank is on red alert, trying to figure out how to solve the ongoing issue of PPI mis-selling and compensation claims.
Meanwhile, amidst the problem the bank was facing, their CEO, Antonio Horta Osorio has earned an award amounting to a £1.5million shares bonus even if the bank’s profit fell drastically. Even the employees of the bank will earn their bonus of £3,900, although it was reported that the bonuses has dropped by 3% since 2011. Having continuous problem with PPI compensation claims, the bank still has improvements in some of its business. The bank has developed lending to small business and was able to help a number of fifty-five customers to own a home.