State-backed Lloyds Banking Group fell back into the red as provision for the payment protection insurance (PPI) mis-selling scandal soared to more than £8 billion.
The group, which is 33% owned by the taxpayer, recorded statutory pre-tax losses of £440 million in the third quarter of the year, compared with a £151 million loss in the same period last year.
Underlying earnings nearly doubled to £1.52 billion but the bank had to increase the money set aside for PPI provision by £750 million to £8.02 billion as complaints over the scandal fell more slowly than expected.
The bottom line was further weighed down by losses from sales of assets during a period when it disposed of a German life insurance business as well as operations in Australia.
The results were the first since the Treasury began the process of returning its stake in Lloyds to the private sector, selling a 6% chunk for £3.2 billion to institutional investors last month.