Lloyds banking group has set aside £375m to pay for payment protection insurance (PPI) compensation. The bank, which is partly state owned, has been dogged by a PPI mis-selling scandal, which has taken a bite out of its first quarter profits.
The bank posted a pre-tax profit of £288m for the start of 2012, up from a £3.5bn loss from the first three months of 2011.
The purpose of PPI is to cover loan repayments, should the borrower be unable to pay. However, it was widely mis-sold and became a topic of controversy, and the target of campaigning by consumer groups.
Despite already setting aside £3.2bn to cover customer compensation last year, Lloyds said it has to increase the sum due to complaints.
Barclays also increased its PPI charge last week.
