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Investing.com -- Lloyds Banking Group Plc plans to allocate an additional £800 million ($1.07 billion) to compensate customers who were missold car loans, following the UK finance watchdog’s initiation of a redress program.
The British lender announced in a filing on Monday that it had previously established a provision of £1.15 billion for this issue. With the new allocation, the total provision reaches £1.95 billion, covering both customer compensation and operational costs.
Lloyds stated that this figure represents the bank’s "best estimate" of the potential financial impact from the motor finance issue. The increased provision reflects the bank’s expectation of "a higher number of historical cases," including those dating back to 2007.
The bank also noted that the new provision accounts for the "likelihood of a higher level of redress than anticipated in the previous scenario based provision."
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