5 – Will the lack of PPI claim deadline hurt Lloyds shares?
The PPI (Payment Protection Insurance) scandal has gripped the United Kingdom, as millions were seemingly undone by this somewhat fraudulent contractual term. PPI is also known as credit insurance, loan repayment insurance, or credit protection insurance and relates to the insuring of a loan repayment should a borrower become ill, unemployed, or pass away. Sadly, while it sounded like a fair enough concept on paper, it was far from it on reality. Banks such as Lloyds were mis-selling PPI, with some even having no idea that they had PPI until they faced charges later on. The issue related to PPI would take years to come fruition, but when it did Lloyds shares would pay a heavy…show more content… This presents a serious issue for Lloyds and Lloyd shares, especially considering that in other departments the bank is seen as a notably strong performer.
Addressing the matter head on, Lloyds is leading the charge when it comes to capping the time in which a PPI claim is made. The original plan was for a deadline of 2018 to be implemented, but Lloyds want it brought forward in attempt to boost Lloyds shares prospects. Speaking on the matter Lloyds Finance Chief George Culmer said, "We think that by implementing a shorter time bar, it will force people’s hand. It will make those people who have a potentially outstanding claim to act more quickly”. Pushing the matter forward, he has also declared the original cut-off date of 2018 to be “unnecessary and excessive”.
The facts are clear; people are apprehensive when it comes to Lloyds shares because the matter of PPI has still yet to be settled. The results announcement failed to deceive in the sense that PPI is being shown to be a huge burden on Lloyds, and in many ways is a black cloud that is hanging over the bank. Since the turn of the 2008 credit crisis, Lloyds is one of the few banks that has been truly able to steady ship. The problem is that due to PPI concerns that isn’t necessarily showing within the price of Lloyds shares.
6 – Why are some traders unimpressed with Lloyds shares?