Lloyds Banking Group has set aside an additional £1.8bn to cover payment protection insurance (PPI) mis-selling claims and payouts, bringing its total provisions to approximately £9.83bn.

Of the total £10bn, nearly £7bn has been spent to compensate customers who were wrongly sold payment protection insurance.

In the fourth quarter of 2013, Lloyds had set aside £1.8bn for legacy PPI business, and a further provision of £130m towards the sale of interest rate hedging products to certain small and medium-sized businesses.

According to an estimate, the UK banks and building societies have provided in total nearly £22.2bn for PPI.

Lloyds finance director, George Culmer, said, "It’s a big number and it’s obviously disappointing. There are always risks but we think it’s appropriate."

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