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.
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.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article