FORMER Lloyds Banking Group retail banking chief Helen Weir has insisted payment protection insurance met customer needs, even though the bank has taken a £5 billion hit from compensation claims for mis-selling.
Despite her assertion, Ms Weir was one of three former Lloyds executives, including Phil Loney, now chief executive of Scottish Life's parent Royal London, who apologised for their role in promoting the product when they appeared before the Parliamentary Commission on Banking Standards.
Lloyds has so far made a £5.3 billion provision for PPI mis-selling compensation, and by the end of September it had paid out £3.7bn. The vast bulk of this was sold by Lloyds TSB before its rescue takeover of Halifax Bank of Scotland in 2009.
Loading article content
Many customers were mis-sold the insurance because they either did not need it in the first place, or would have been excluded from making a claim, typically because they were self-employed. But Ms Weir said: "This was a product that met very important financial needs for customers who wanted peace of mind were they to fall into financial difficulties."
Ms Weir had £218,000 of her bonus clawed back by Lloyds last year as it took £1.5m from directors who headed Lloyds as the PPI scandal unfolded.
She insisted Lloyds staff were not incentivised to sell the product.
However, she added: "I acknowledge the mis-selling of PPI across the industry and at Lloyds and I apologise for my part in that."
Ms Weir was the chief executive of the retail division of Lloyds from 2008 to 2011 and before that was group finance director.
She is now finance director at employee-owned John Lewis.
Mr Loney, who oversaw Scottish Widows as managing director for life, pensions and investments at Lloyds until October 2011, said: "Clearly against the standards that emerged in 2009, there has been widespread mis-selling, so everybody involved has a responsibility for that and I am very sorry for the situation that arrived at."
Mr Loney, who was in charge of developing Lloyds's PPI product, insisted that 90% of claims made on payment protection insurance paid out.
Carol Sergeant, former chief risk officer at Lloyds, also apologised. She previously worked at the Financial Services Authority.