Britain's state-rescued Lloyds bank set aside another £1.0 billion ($1.6 billion, 1.2 billion euros) on Thursday to compensate clients who were mis-sold insurance, pushing it into another third-quarter loss.
Lloyds Banking Group, which is 39.6-percent owned by the taxpayer after a vast bailout at the height of the global financial crisis, said that the new provision would take its total bill for the insurance mis-selling scandal to £5.3 billion.
Lloyds added in a results statement that it faced a net loss of £361 million in the three months to the end of September.
However, that marked an improvement from a shortfall of £501 million during the same part of last year.
Chief executive Antonio Horta-Osorio added the PPI charges were the "primary driver behind the statutory loss".
Stripping out the PPI provision, the group doubled its underlying profit to a better-than-expected £840 million in the third quarter, as it cut bad debts and narrowed losses from its non-core businesses.
Horta-Osorio added: "We have made further significant progress this quarter, improving underlying performance in a challenging environment, while continuing to deliver returns above the cost of equity in the core business and strengthen our already robust balance sheet."
British banks have suffered heavy compensation bills for the payment protection insurance (PPI), which provided cover for consumers should they fail to meet repayments on a credit product such as loans, mortgages or payment cards.
PPI became controversial after it was revealed that many consumers had been sold it without understanding that the cost was being added to their loan repayments. Britain has since banned simultaneous sales of PPI and credit products.
Back in April 2011, British banks lost a high court appeal against tighter regulation of PPI.