Lloyds Bank sets aside another £700m for PPI claims

Lloyds Banking Group has set aside another £700 million to meet PPI claims, it has been announced.

The money will cover costs and refunds in the ongoing saga over the mis-selling of payment protection insurance.

It comes just months after Lloyds shelled out £350m to cover the spiralling cost of the PPI scandal, which has now reached more than £18 billion.

After talks with the Financial Conduct Authority, the bank, which also handles mortgage loans, has allocated a further £283m to tackle its mistreatment of customers in repayment arrears.

Between 2009 and 2016, some 590,000 people with Lloyds mortgages were wrongly charged due to the way the banking group applied policies relating to financial difficulty assessments.

Lloyds has now vowed to refund all fees charged during that period - along with any litigation fees paid out by customers who entered its litigation process as a result.

The firm will also offer 'potential distress and inconvenience' payments, along with covering any loss people suffered as a result of not being able to keep up with unsustainable repayment plans.

Financial Conduct Authority director Jonathan Davidson welcomed the announcement.