LLoyds have announced some interesting full year results today. Firstly they have added another £1.8 billion to the PPI provsion, which brings the total allocated to just shy of £10 billion.
£10 billion - that was a big rip off. I still can't believe that banks ever meant to do this in any coherent way. Yes to ripping off their customers, but no to doing so illegally. The nature of the FCA changing the rules post-hoc is worrying. In this case there is a lot upside - people get money back from Banks who they hate and the economy gets a small boost from the spending. Even management consultants get big contracts from banks to help distribute this and a large army of people have been gainfully employed in this industry.
At home, it has even made me stop ever using my landline as it is bombarded by those annoying PPI calls about 15 times a day. I am now ready for wireless 4G!
However, what about the next crisis. You see interest rates are about to go up and I worry that not only won't people be able to pay, but they are going to blame the banks for lending to them. Now that the State has stepped in to say 'mis-selling' this possibly has no end. Smart people might even complain the rates were set by Libor....
Lloyds is the largest lending of residential mortgages too - how big will the provision in the accounts have to be for the next 'scandal'; especially if Red Ed the populist is in charge next year.