Lloyds takes near £1 billion hit for failures on PPI and mortgage arrears

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Lloyds Banking Group has taken a near £1 billion hit after revealing it would refund customers for failures in its handling of mortgage arrears policies and set aside extra cash to address the mis-selling of payment protection insurance (PPI).

The lender has estimated it will have to shell out £283 million to repay approximately 590,000 mortgage customers who were mistakenly charged between 2009 and 2016 because of the way Lloyds applied policies relating to financial difficulty assessments.

That is on top of £700 million put aside to deal with PPI claims.

It comes just months after Lloyds forked out an extra £350 million to cover the ballooning cost of the PPI mis-selling scandal, which has now reached over £18 billion.