Lloyds Banking Group has earmarked a further £1bn to pay customers who were mis-sold payment protection insurance.
The latest ring-fenced amount brings the bank's total PPI compensation bill to £5.3bn.
Lloyds chief executive Antonio Horta-Osorio said, however, that the bank continues to boost performance.
"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," he added.
The news follows an announcement from Barclays earlier this month that it will set aside an additional £700m for PPI compensation.
