Lloyds Banking hit by structured investments mis-selling scandal

Lloyds Banking Group shares were hit on Friday by reports that it may have to pay £80m to compensate customers in a fresh mis-selling scandal.

The bank apparently sold a structured investment product between 2008 and 2010 that "was in breach of providing fair, clear and not misleading promotions, because it provides the consumer with a misleading impression of the likely return," according to a Financial Conduct Authority letter cited by Lloyd's trade union, the LTU.

The LTU wrote in a newsletter on Wednesday that it expects combined compensation to reach as much as £82m for all the products.

The lender is writing to more than 7,000 customers of the bank and its investment arm Scottish Widows, The Times reported on Friday.

Lloyds will offer money to customers who bought structured investments, but have since sparked anger among consumer groups due to the products being said to be too complex and performing poorly.