Lloyds to get record £100m fine for mishandling PPI complaints

Bailed out bank Lloyds is set to be slapped with a record fine by financial watchdogs for mishandling payment protection insurance (PPI) complaints.

The Financial Conduct Authority (FCA) is preparing to dish out the penalty, expected to be in excess of £100m (€136m), Sky News reported.

Lloyds Banking Group sold more PPI policies than any bank and has set aside a total of £12bn in the event of compensation claims from customers. In 2013, it set aside £50m after it was revealed that it was under investigation from the FCA for its PPI-related activity.

If the fine is more than £100m, it would be almost five times the previous record fine for mishandling complaints when Clydesdale Bank was issued a £21m financial penalty.

It rounds off a poor week for Lloyds, which on 3 June was stopped at the High Court from removing high interest bonds from around 100,000 private investors.

The bank had been attempting to buy back the bonds, which had interest rates of between 6% and 16%, at face value and save itself a couple of million pounds.

Lloyds said that it would appeal the decision.