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Lloyds Banking Group posts loss due to payment protection claims charge
Shares in Lloyds Banking Group (LON:LLOY) fell 7 percent in morning deals after the company revealed a £3.47bn loss in the first quarter after it set aside billions to cover potential miss-selling claims.
The company, which is 41 percent owned by the British taxpayer, put aside £3.2bn as a provision for potential costs following a High Court ruling over mis-sold payment protection insurance and discussions with the Financial Services Authority (FSA).
In April, British banks lost a court bid to stop the financial regulator (FSA) from imposing rules for the compensation of customers who were improperly sold loan insurance.
Lloyds posted a statutory loss of £3.47bn in the first quarter to 31 March 2011 - compared to profit of £721mln profit a year ago - including the PPI provision.
Excluding the provision and other one-off items, pre-tax profit came in at £284m (2010: 1.1bn).
The net loss was £2.4bn for the first quarter - compared with a profit of £169 mln in the same period - a year earlier.
In the quarter, Britain's biggest mortgage lender revealed that writedowns had climbed to £2.61bn from £2.4bn - arounnd £500mln more than it expected.
This was mainly due to Ireland where the bank had an impairment charge of £1.14bn in the first quarter - allowing for potential falls in commercial real estate prices in Ireland of 10 percent.
Lloyds said its sales of non core assets had been ahead of expectations in the quarter and resulted in £20.7bn.
As at 9.45am Lloyds shares were down 7.6 percent from yesterday's close - changing hands at 53.56 pence.



















