Lloyds Banking Group Plc (LLOY) has had its credit outlook cut to negative from stable by Standard & Poor’s.

S&P said its decision related to the 5.3 billion pounds the bank has set aside to compensate customers wrongly sold loan insurance, the firm said in a statement today.

“It appears likely that Lloyds will report a statutory pretax loss in 2012 and we now assume only a modest pretax profit in 2013,” S&P said.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Jon Menon at jmenon1@bloomberg.net