LLOYDS TSB said it would set aside an additional £300m provision this year to partially cover the cost of paying compensation for endowment mis-selling, reports the Times .
Britain’s fifth-biggest bank by market capitalisation said the increased provisions would also cover the cost of paying annuities to people living longer than expected, says the Times.
Despite the extra charge, Lloyds TSB said it remained on track to meet analysts’ forecasts for this year and the current consensus for profit before tax for the year ending December 31 is said to be £3.3bn.
Lloyds yesterday said it had seen slower growth in lending for credit cards and other unsecured products in the second half and a further deterioration in credit quality, resulting in increased bad debts as a percentage of average lending.
Britain’s banks have generally reassured investors about credit quality and shown that unsecured lending has slowed as interest rate rises and higher utility bills have reduced consumer spending.
AT THE SAME time, LLoyds TSB announced it is to "repatriate" a larger-than-expected £800m from Scottish Widows - taking this year's dividend payments from the Edinburgh group to £1bn, according to the Scotsman.
Scottish Widows paid its parent a £200m dividend in March, and Lloyds said yesterday's announcement was the latest sign of the "strong turnaround" experienced by the insurer in recent years.
A spokesman said: "The plan has always been to get Scottish Widows operating well enough to start paying dividends from surplus capital, and hopefully this is just the start of a regular flow."
Lloyds paid £6.7bn for Scottish Widows at the top of the market in 2000,and following improved results earlier this year, Widows said it is ready to start paying dividends to the bank which is keen for some return on its investment.
TAKE-UP of the pension credit, the government's flagship means-tested benefit for pensioners, has almost ground to a halt, according to official figures published in the Guardian.
The pension credit - which pays a guaranteed minimum to pensioners and gives a top up to small retirement savings - was claimed by an extra 5,128 people in the last three months, leaving an estimated 1.7m who are eligible but have still not claimed. More than 2.7m households do receive the benefit.
SENIOR TREASURY mandarin John Kingman has emerged as the front runner to replace James Sassoon as one of chancellor Gordon Brown's closest advisers on City matters, reports the Daily Telegraph.
At 36, Kingman would be one of the youngest to take up the influential role as a managing director in charge of finance, regulation and industry.
Sassoon, 50, a former UBS banker, resigned last week from the role last week after only three years as a civil servant.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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