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Lloyds posts £439m loss as extra PPI claims hit profits

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Lloyds Banking Group has reported a loss of £439m in the first half of the year, after the bank was forced to set aside an additional £700m for payment protection insurance (PPI) claims.

This is the second time this year Lloyds has increased the provision, raising the £3.2bn compensation package by £375m in May, following a spike in mis-selling claims.

The extra £700m weighted in on profits in the first half but, on a brighter note, the retail bank increased underlying profit by £715m to £1.1bn.

Antonio Horta-Osorio, the group’s chief executive officer, said the group is on still track to meet financial targets despite reporting a loss.

“We are on track to deliver our strategic aims and we are making significant progress with our financial targets,” said Horta-Osorio

“Mis-sold PPI policies are an industry legacy issue but by redressing those affected quickly we continue to do the right thing for our customers.”

Lloyds’ share price was slightly dampened by the disappointing results opening 0.50% lower than yesterday to trade around 29.15p.

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