Lloyds sets aside further £1.4bn in PPI provisions

This brings the total amount provided to £13.4 billion.

However Lloyds' statutory profit before tax rose 38% to £1,193 million in H1, despite its PPI provisions and the £660 million charge relating to the disposal of TSB.

The Group saw an underlying profit of £4,383 million, an increase of 15% on the first half of 2014, with total income up 2% to £8,968 million.

Total loans and advances to customers were £452 billion at 30 June 2015, 5% lower than at 31 December 2014, principally reflecting the sale of TSB, according to the bank's statement.

António Horta-Osório, Group Chief Executive, commented:

"The additional provision for PPI is disappointing.

"Rebuilding customer trust remains a key imperative for the business. Regrettably, the UK banking sector is still being impacted by conduct issues, including litigation and PPI. We reached a settlement with the Financial Conduct Authority in June in relation to aspects of our past PPI complaint handling processes. We are fully committed to improving our operational procedures and ensuring we do the right thing for our customers.

"In support of rebuilding customer trust, we have continued to transform the corporate culture and have completely overhauled the performance and reward framework for our customer-facing colleagues, with performance now predominantly assessed on the basis of customer feedback.

"We have also strengthened the control environment through changes to our organisational design and the introduction of new processes across the Group to assess and monitor our risk appetite. While these improvements have been essential in helping us to rebuild customer trust, we recognise there is more to do."