TAXPAYER-backed Lloyds Banking Group posted lower-than-expected profits after taking an extra £375m hit to cover payment protection insurance claims.
The 40% state-owned bank has now set aside nearly £3.8bn to deal with PPI compensation after a recent increase in the volume of claims.
Lloyds, which warned that the final cost of the PPI mis-selling scandal may change, revealed pre-tax profits of £288m for the three months to March 31, compared with £316m in the previous quarter and City expectations of £500m.
Lloyds, which includes the Halifax, was pushed to a £3.5bn loss in 2011 by the PPI mis-selling scandal, leaving taxpayers wondering when they will get their money back.
Chief executive Antonio Horta Osorio announced thousands of job losses as part of his strategic review, as well as plans to sell off large parts of its international operations.
