Analysts predict bank needs to set aside more cash

Lloyds Banking Group may have to add £2bn to its £4.3bn fund for compensating victims of mis-sold payment protection insurance (PPI), according to analysts.

Last week Barclays increased its own PPI fund from £1.3bn to £2bn. But JP Morgan Cazenove analysts said that Lloyds held 40%-45% of the PPI market, so may need to increase its own compensation pot by £2bn, according to Reuters.

Investec analyst Ian Gordon and Shore capital analyst Gary Greenwood said Lloyds could have to set aside a further £2.3bn to meet its PPI liabilities.

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