Lloyds Banking Group has made a further £750m provision for expected claims against its sales of payment protection insurance (PPI), taking its total commitment beyond £8bn.
The group, reporting its year-to-date results for 2013, said the extra money was being made available due to a lower than expected drop in claims numbers, as well as higher than projected uphold rates and costs.
About £1.7bn of the £8.02bn set aside by Lloyds for PPI compensation relates to administration costs.
However, the additional £750m charge did not prevent the group from turning a £607m loss in the first nine months of in 2012 into pre-tax profits of £1.69bn for the same period this year.
Its income was boosted by its sale of shares in wealth manager St James's Place in two separate tranches earlier this year.
Meanwhile, Lloyds said the return of the TSB brand and the re-launch of Lloyds Bank had been a highlight for the group in Q3.
Chief executive António Horta-Osório (pictured) said: "The third quarter was an especially significant one for the group. We returned the TSB bank to the high street and launched a rebranded, revitalised Lloyds Bank.
"I am pleased that the progress we have made enabled the UK government to begin the process of returning the group to full private ownership, and importantly, getting taxpayer's money back at a profit. Our strategic plan continues to deliver and customers are increasingly seeing the benefits."
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