Lloyds Banking Group profits have been sent plunging by more than a third by the car loans commission scandal, as the lender steels itself for a surge in compensation payouts to drivers.

The high street bank took the 36% hit in the third quarter after putting aside a further £800m to cover the prospective costs of a redress scheme proposed by the Financial Conduct Authority (FCA).

The additional charge, announced last week , brings Lloyds’ total compensation pot to £1.95bn. Lloyds says it is facing greater hit than expected from car loan finance scandal Read more

Lloyds is the UK’s biggest car lender through its Black Horse division and is expected to foot the largest bill among its peers.

The additional charge sent Lloyds’ pre-tax profits down 36% to £1.17bn in the three month

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