Lloyds Bank is to shell out almost £300m in windfall payments to more than half a million mortgage customers after the lender overcharged people in arrears.
Alongside its half-year results announcement tomorrow morning, Lloyds will reveal a programme to rectify losses incurred by around 600,000 customers in financial difficulty between 2009 and 2016.
Square mile sources have confirmed the plans to City A.M. after Sky News first reported them earlier this evening.
The issue is in relation to the way in which Lloyds totted up payments to customers that fell behind on payments.
It is understood affected customers will not need to take any action as Lloyds will contact them.
The bank has already booked the majority of the repayments but will top-up provisions to the tune of tens of millions of pounds. Further details will be revealed in its regulatory announcement tomorrow morning.
The lender’s bottom line is expected to rise by almost a fifth according to analysts.
Profit before tax is forecast to be £2.9bn, with the firm paying a £1.6bn, or 1p per share, dividend, Investec said.
The bank has already set aside £17bn in redress to customers mis-sold PPI. It is expected to reveal up a further £400m in provisions in the morning.