Lloyds Banking Group has revealed that it incurred losses of £570 million in 2012.In its annual results statement, the bank revealed that the main reason for its losses were an increase in provision for the mis-selling of its banking products.Lloyds had to increase its provision for the mis-selling of payment protection insurance (PPI) by £1.5 billion.Of all UK banks, Lloyds has the highest amount of provisions to pay for PPI claims.As well as PPI, Lloyds had to increase provisions for the mis-selling of interest rate hedging products to businesses. It set aside £310 million in the fourth quarter of 2012.These provisions had to be made following an investigation by the Financial Services Authority which revealed that in 90 per cent of cases studied, interest rate hedging products had been mis-sold.Had the bank not had to increase provisions for product mis-selling, it would have reported a pre-tax profit of £2.6 billion.Samantha ClarkeSamantha is a former banking assistant and has over ten years experience in retail banking.
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